The Tribune

By Malcolm Strachan

AFTER the controversial decision by the government to introduce a sliding scale tax structure on the local gaming industry, people were split with some supporting the government and others lamenting local businessmen. Disdain for the gaming industry stems from a number of places. On one hand, many felt it was not in line with our standing as a “Christian nation”. Others feel the vice causes family issues and is a drain on society.

And then there are those who oppose illegal gambling who went to the polls in May 2017 and voted the previous government out of office. This was done, in large part, as payback for the Christie administration holding a gaming referendum where the Bahamian people resoundingly voted against legalising gambling, only to be later told it wasn’t a vote at all, just an opinion poll.

When Deputy Prime Minister and Finance Minister Peter Turnquest dropped the bombshell in May last year that the government would be implementing a sliding scale tax on the numbers industry, many of these businessmen feared complete eradication of their livelihoods.

Veteran numbers boss Craig Flowers was among the gaming operators voicing frustration with the government’s decision to target the industry. Calling the proposed tax a “death warrant”, Flowers alluded to the web shop bosses going back underground – potentially limiting any possibility of the government to maintain the $22m it currently recoups in gaming taxes.

A collective with deep pockets, they were prepared to fight the government.

Deputy Prime Minister Turnquest’s proposed taxes would have minced the smaller gaming operators and squeezed the larger ones for nearly half of their overall earnings – a move gaming executives said would lead to 2,000 job losses, as well as potentially limiting the government from achieving its revenue projections – a perhaps sobering revelation.

The government’s sliding scale tax was as follows: businesses earning up to $20m in revenue would have been taxed at a rate of 20 percent. Those earning between $20m and $40m were to be taxed at a rate of 25 percent. Gaming houses pulling in $40 to $60m would be hit at a rate of 30 percent. And those earning between $60 and $80m, $80 and $100m, and over $100m, would be taxed respectively at 35 percent, 40 percent and 50 percent.

It did not take long to realize that Turnquest - who obviously thought the gaming house operators would wave the white flag - was barking up the wrong tree.

Island Luck CEO Sebas Bastian, who faced being taxed 50 percent of his earnings as a result of the possible implementation of what he called an “unfair, irrational, unreasonable and oppressive” tax regime, along with his cohort, was prepared to fight the government to the end.

With Wayne Munroe QC, representing the Gaming House Operators Association, indicating his clients were prepared to go as high as the Privy Council, it was obvious they were in this fight for the long haul – a result that would have made no sense for the government.

It would have wasted resources in a long and drawn out litigation process that could have been avoided had both sides just entered into fair and balanced negotiations from the onset.

Thankfully though, after five months of legal wrangling and an absence of tax revenue from the local gaming sector, heads have cleared with last week’s announcement of an agreement between the government and the gaming sector.

Certainly, while some may look at the government as cowing to the numbers bosses, we ought to see the wisdom in this move, as they never should have gotten here in the first place and stood the most to lose with litigation possibly enduring through an election year.

One can argue the gaming sector, if approached from the beginning, may have willingly agreed to the amended tax structure, which allows the government to make $50m, instead of the initially proposed $75m. Might we note this is not exactly a loss for the government who still stands to make 127 percent increase from gaming tax revenue.

Unfortunately, it took us five months and whatever was spent during the litigation process to get here – a figure we hope the government discloses.

Surely, it is no secret many among us loathe that number houses are legal business establishments popping up all around the archipelago. That is understandable.

However, there is a duty of responsibility which every one of us must have for ourselves. There is no business establishment in The Bahamas that forces anyone through its doors at gunpoint. That said, we must treat those who participate in this form of entertainment as adults.

The government, likewise, is fully in its right to seek more taxes from the gaming industry. And commendably, for what may have been stripped from society as a result of the proliferation of this industry, they’re planning to give it back through education.

Hopefully, in addition to education, the government will use these resources to lend additional support to the Ministry of Health and Department of Social Services to assist individuals and families affected by problem gambling.

We have seen a willingness from Bahamian businessmen to repay their debts to society through many philanthropic ventures. It would be great to see the government assist them with this interest in giving back by looking at how we can continue to develop our country through private public partnerships.

The Bahamian people must set aside judgments that only increase divisiveness and seek how we can benefit by channeling gaming tax revenues back into the community. This is a much more productive use of our passion, as it will require cooperation for our nation to progress. One thing for certain, with the government in need of these resources, the numbers industry is not going anywhere anytime soon.

We may as well get used to it.