The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Port Authority (GBPA) is aiming to bring order to Freeport’s “Wild West web shop gambling show” by March 2017, its attorney has warned, with non-compliant operators facing legal action to shut their businesses down.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business that his client planned within the next fortnight to serve letters “inviting” all Freeport-based web shops to regularise their GBPA licenses and associated fees.

He warned that the sector would have 14 days to comply, after which the GBPA would seek legal injunctions to force their businesses to close, on the grounds that they are not properly licensed.

Mr Smith added that the regulatory offensive would also focus on other businesses operating in Freeport without a GBPA license, with the threat of closure again hovering over those who fail to comply.

Speaking after Freeport’s quasi-governmental authority moved to ‘strike out’ the action brought by Chances Games and its parent, Jarol Investments, to determine who has the regulatory authority over web shop gaming in the city, the Callenders & Co attorney indicated that his client’s patience was wearing thin.

“It is the Port Authority’s intention to regularise the Wild West web shop gambling show that has developed in Freeport,” Mr Smith told Tribune Business.

“The Port Authority intends to invite all licensees, including Jarol, to apply to amend their GBPA licenses and pay license fees for web shop gaming in Freeport.”

Jarol/Chances, and all other Freeport-based web shops, are currently licensed by the GBPA as ‘Internet cafes’ rather than gaming houses. It is arguing that the operators are thus breaching their license terms by conducting businesses they are not licensed for, and is seeking to rectify this.

The GBPA wants to levy fees on the web shops that are comparable to those charged for casino gaming, a maximum of $300,000 or 1 per cent of winnings - whichever is greater. This, Jarol has alleged, amounts to a 500 per cent increase in GBPA fees.

Mr Smith emphasised that the GBPA’s compliance drive encompassed all Freeport-based businesses, not just the web shop industry, with particular focus being placed on the ‘informal’ or ‘underground’ economy.

“There are other persons operating without any form of GBPA license, and the Port Authority intends to also invite them to apply for such a license,” he told Tribune Business.

“In due course, anyone who does not amend their current license or obtain a new license to operate in Freeport will be served by the Port Authority, which will get an injunction to restrict them from operating without a GBPA license.

“The intention is to have all this regularised within February/March 2017.”

Mr Smith added that “by next week or the week after, the Port Authority should be serving the letter on all the operators” requesting their compliance, with web shops and other businesses to be given 14 days to regularise their licenses and associated fees.

The outspoken QC’s warning about the GBPA’s intentions, and his announcement of the compliance deadlines, will only increase the uncertainty for the Freeport web shop gaming industry.

Chances Games/Jarol is the only operator likely to currently enjoy some protection against the GBPA’s threat, with its bid for an injunction to prevent further regulatory action against it set to be heard by the Supreme Court on next Monday, January 16.

Island Luck, which initiated a similar action to Chances/Jarol last year, has not moved that action forward to-date, with Mr Smith and the GBPA having applied to move it from Nassau to Freeport.

Tribune Business previously revealed the ‘11th hour intervention’ in Jarol’s case against the GBPA by the Attorney General’s Office, which persuaded the Supreme Court to adjourn the matter until March 10, 2017.

That is when it will hear the arguments by the Attorney General’s Office, acting on behalf of the Gaming Board; its secretary, Verdant Scott; and minister with responsibility for gaming, Obie Wilchcombe, on whether there should be a ‘preliminary trial’ of the issues raised by Jarol/Chances.

They identify these ‘preliminary issues’ as determining “whether or not” the Gaming Board is the only regulator with the power to issue gaming licenses throughout the Bahamas - including in Freeport.

And they are also calling on the Supreme Court to determine if the GBPA has the authority to issue gaming licenses in the Port area.

Mr Scott, in an affidavit seeking to justify the Government’s demand for a determination of the “preliminary issue”, alleged: “The trial of this matter would be time consuming and costly, and would protract the proceedings.

“The determination of this preliminary issue would facilitate the proceedings, and save costs.”

The Government’s intervention in the case came as little surprise, since the GBPA is effectively challenging the Gaming Board as the primary regulator for web shop gaming in Freeport.

In so doing, it is threatening to undermine the integrity of the national regulatory regime for all forms of Bahamas-based gambling that was established with the Gaming Act 2014.