The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Democratic National Alliance’s (DNA) leader says the 10-year moratorium on new web shop gaming licenses “stinks”, branding it anti-competitive and accusing the Government of pandering to ‘special interests’.

Branville McCartney blasted the Government for restricting web shop gaming ownership to “a select few”, after it last week confirmed that no more than eight operator licenses will be available until 2027.

Besides stifling competition, the DNA leader suggested that no other industry was subject to such “special treatment” where the Government barred new entrants from the market to protect the interests of existing operators.

He suggested that the newly-licensed web shop operators were now acting like typical businessman who had acquired success and wealth, pulling up the ladder and shutting the door behind, so that they could keep it all for themselves and prevent others from following them.

“It stinks of special interests within the gaming sector,” Mr McCartney told Tribune Business of the 10-year moratorium, which was announced by Obie Wilchcombe, the minister responsible for gaming, last Thursday.

“I think that as we get close to the election, and as the Government tries to prepare for the election, it’s going to try and do whatever is necessary to reward those special interest groups, notwithstanding the long-term negative effect it will have on the country and a particular industry.”

Mr McCartney questioned why the Government had chosen to restrict the number of operator licenses to a maximum of eight until 2027, but not seen fit to curtail the number of web shop locations in the Bahamas.

Mr Wilchcombe, in his statement on Thursday, boasted about the reduction in the number of web shop locations since the process to legalise, regulate and tax the sector began.

He said about 635 web shops existed at the start of the industry’s regularisation process but, by June 2016, only 372 locations had been licensed, with 31 pending.

“This will result in a total of approximately 403 licensed locations in the country, which equates to a 36.5 per cent reduction in the number of locations that were active at the commencement of the regularisation process,” Mr Wilchcombe’s statement said.

However, given that the Bahamas has an estimated 377,374 population based on 2013 data, the 403 web shops still amount to a ratio of one location for every 936 Bahamians and residents.

Mr McCartney implied that the failure to impose restrictions on the number of web shops nationwide, and the number of locations each operator can have, showed that the Government’s true intent was to simply protect and reward existing operators.

“It’s not fair. I don’t think it was good for the Government to be allowing it, the moratorium, in these circumstances,” he told Tribune Business.

“It’s certainly anti-competitive and, in the circumstances, we see that although there may be a moratorium on the number of operators who can get involved in this particular industry, the number of gaming houses that can be allowed by those participating entities is tremendous.

“It’s very anti-competitive,” Mr McCartney reiterated of the moratorium. “I would have thought this industry is made for competition, and would be more open that just to a select few.

“That tells me that the Government, even with this particular sector, seems to be pandering to, certainly, a group that can have its way. This certain group doesn’t want any other person to be part of the gaming industry, but I can guarantee you that this certain group will have the majority of the web shops. They’re getting what they want.”

The Government had initially proposed a five-year moratorium on new operator licenses, but the existing web shop operators - represented by the Gaming House Operators Association - successfully pushed for this to be doubled to 10.

They argued that such an exclusivity period was necessary to enable them to recoup the extra costs, bureaucracy and taxes incurred during the legalisation process, and that it was unfair for new entrants - who do not participate - to benefit from the existing operators’ hard work.

Sebas Bastian, Island Luck’s chief executive, added that allowing new entrants into web shop gaming would saturate the market, resulting in too many players and little to no profit for all.

Mr McCartney, though, said he was unable to think of any other Bahamian industry where the Government now gave existing operators total exclusivity through the blocking of new entrants.

He added that the existing operators also seemed to want to keep all the wealth for themselves through the moratorium on new competition.

“I cannot think of any off-hand,” the DNA leader responded, when asked to name industries that received similar protection. “Now that they [the web shop operators] have been able to qualify, they seem not to want anyone else to have any part of the industry.”

The closest comparisons to the 10-year web shop gaming moratorium in recent memory are the Bahamas Telecommunications Company’s (BTC) mobile monopoly and Cable Bahamas’ 15-year cable TV exclusivity, both of which have expired.

Tribune Business sources, speaking on condition of anonymity, suggested that a desire to keep out new entrants was also evident when the Government blocked the tie-up between Bahama Dreams and Super Value owner, Rupert Roberts, which was ultimately designed to see the latter acquire the web shop chain.

That was scuppered by the Government’s regulatory action, which allowed Island Luck to come in and acquire the majority 65 per cent stake in Bahama Dreams for itself.