The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government is “still assessing how to address” the 10-year bar on new web shop entrants, a Cabinet Minister yesterday saying his regulatory approach would have been different.

Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business that the moratorium imposed by the former Christie administration was anti-competitive and had effectively “locked in” a monopoly among the eight existing players.

Rather than limit the number of operators, Mr D’Aguilar said he would have instead restricted the number of web shop locations per licensee and controlled where they located.

He added that the previous government’s decisions had left the Gaming Board “betwixt and between” in its regulation of the newly-legalised industry, having to contend with the moratorium on one hand and a perception that the Bahamas has too many web shop locations.

The industry is continuing to expand, with Island Luck close to completing a new ‘casino-type’ outlet on the Charles W. Saunders Highway, just around the corner from Sadie Curtis Primary School. Under the sector’s zoning regulations, web shops are not supposed to be located in close proximity to churches and schools.

Island Luck is also thought to have acquired the former Success Training College site on Bernard Road for conversion into another gaming location, but Mr D’Aguilar said yesterday: “Island Luck indicated they had received approval for those locations prior to implementation of the moratorium, and they are now rolling-out those sites as opposed to building them right away.”

The Minister continued: “The Gaming Board is somewhat betwixt and between. In the first instance, by putting in a moratorium you guarantee a monopoly for the existing players.

“You should really allow other players to enter the market and create competition. Generally, there’s a perception there’s a perception that there are enough numbers houses out there, and we don’t need any more. That’s where the regulators of the gaming industry are conflicted.”

Mr D’Aguilar told Tribune Business that the Minnis administration needed to develop “a clear policy” to address these concerns, acknowledging that there were many issues still to be addressed in relation to web shop industry regulation.

“By putting in a moratorium you’re locked in with the current players, and the general perception is we don’t need more numbers houses; we need less,” he said.

“We’re looking at how feasible it is to implement a policy that eliminates gaming houses close to churches and schools. Do they have minimum distance requirements?

“We definitely need a clear policy on how many locations are through the length and breadth of the country. There’s a lot that has not been addressed that we need to address: How they’re located; where they are located; how close to schools. These things need to be codified.”

The 10-year moratorium introduced by the previous administration restricts the number of operator licenses to a maximum of eight until 2027. This was sold as a measure that would prevent the market from becoming over-saturated, while also allowing Island Luck, FML, Nassau Games, Percy’s Island Games, A Sure Win, Chances and Paradise Games the opportunity to recover from the increased regulation and taxation imposed by legalisation.

However, no obstacles were placed in the way of web shop bosses investing their profits - both pre and post-legalisation - into establishing themselves into other sectors of the Bahamian economy.

Obie Wilchcombe, Mr D’Aguilar’s predecessor, argued prior to May 10 that the number of web shop locations had fallen from 635 pre-regularisation to 372 sites at June 2016, with 31 applications 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 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.

Many observers argued at the time that the moratorium should have been placed on locations, rather than operators, a position with which Mr D’Aguilar agreed yesterday.

“What I would have done is limit the number of locations per gaming house, and I would have allocated the number of locations each gaming house was entitled to roll-out,” he told Tribune Business.

“Obviously, in hindsight, the proliferation of gaming houses was uncontrolled. There’s a social cost to gaming, and we’ve been facilitating access to gaming. We’ve been encouraging people to do it, and this is where the Government needs to regulate.”

Mr D’Aguilar’s regulatory plan mirrors that previously suggested by FML principal, Craig Flowers, who also argued that the focus should have been on the number of web shops per operator, and their location.

Turning to the current model, the Minister reiterated: “In essence no other players can come in, and that goes against the principles of free enterprise. We have to figure out how to address that.

“You’re basically locking the business into the eight players that are left, and as we can see it’s a very lucrative business.”

Mr D’Aguilar suggested that the Gaming Board would have to implement “a 21st century approach to regulating this industry”, given that web shop gaming was moving from physical locations to the online realm.

“Before people went to numbers houses, now they stay at home and do it on their laptop,” he said. “It’s in transition from bricks and mortar to where it is done online.

“The Gaming Board is going to have to adjust to that environment. In my opinion, we’re going to have to hire some technologically savvy Bahamians that can assist us in monitoring this industry.”