The Tribune

By KHRISNA RUSSELL

Tribune Chief Reporter

krussell@tribunemedia.net

THE government’s planned web shop patron tax on lottery winnings was yesterday predicted to deliver a “detrimental” blow to a local gaming house, its owner telling The Tribune he firmly believed the Minnis administration was “dead serious” about closing down the industry.

Craig Flowers, FML Group of Companies owner, lamented the January implementation of the tax, saying he faces a 100 percent taxation as his business is the only gaming house in the country that is lottery based and does not offer slot play to patrons.

Officials have said the impending tax will be placed “on a specific type of game” offered in gaming houses, ie, “the lottery game; three-ball, four-ball, five-ball” and not slot games.

Mr Flowers says he is worried about the survival of his business.

“The platforms have been ready, but the problem we (are) having is that it appears to us that the government is dead serious about closing down the gaming industry,” Mr Flowers told The Tribune. “It makes absolutely no sense to think that when the patrons, who are the industry, to impose another tax on them to—I guess discourage them from playing.

“I don’t see any other method or any other reason other than to discourage the patrons from playing the game and to go back to the unregulated means.”

Web shop operators have previously expressed concern that customers will gravitate to unregulated rivals such as Bet Vegas, where winnings would go untouched.

However, Attorney General Carl Bethel, QC, confirmed yesterday that Bet Vegas was closed down following a court order. He said the government was also consulting on how to shut down illicit “walkabout” men who use handheld devices to sell numbers.

Mr Flowers also said: “Why will they come to us? For what reason? It makes absolutely no sense for them unless they can control the industry where they would have insisted that all companies comply with this tax when it relates to customers and then they go to this weird position that they’re only taxing one sector of the gaming industry, only the lottery, not the slot games.

“The largest portion of gaming in this country today is slots. Why are they going to impose a tax on the smallest portion of the industry and say that they are intending to do whatever. What is it that they are attempting to achieve?”

Asked whether he foresaw having to scale back his staffing levels due to the implementation of this new tax, Mr Flowers said: “I tell you the truth I don’t want to forecast the worst, but I would have said personally in the meetings and I directed my question directly to the Attorney General Mr Carl Bethel saying to him this implication of winning taxes will be detrimental to FML. Reason being is that FML was never a company based by way of slots.”

He continued: “It has always been a lottery based, that’s where we came from at inception. It will be unfair for you to impose a tax only on the lottery sector of the gaming industry and not the slots.

“. . .I haven’t been involved with any discussions to reflect such other than now it’s being implemented.

“FML is the only company that does not deal with slots and if they are saying that they are only going to tax 100 percent of FML’s business but 40 percent of the other industry and leave the other 60 percent untouched for what reason I don’t know, why are they not taxing slots? I don’t know because it certainly can be taxed.

“So, why is this new winning tax only applicable to lottery when all the slots revenue is coming in and going out as it wishes? It just doesn’t make any sense.”

Marlon Johnson, the Ministry of Finance’s acting financial secretary, has argued that the imminent web shop patron winnings tax is a levy “on a specific type of game” rather than an attempt to discriminate against Bahamians.

He recently pushed back against arguments that the new tax – which is set to be imposed beginning New Year’s Day – is discriminatory because it only applies to Bahamians while foreign casino gamblers pay nothing of this nature at all.

“The tax is a tax on a specific type of game. The lottery game; three-ball, four-ball, five-ball,” he said earlier this week, adding that such a tax would also be imposed on casino patron winnings if that industry introduced such a game.

“It’s not a tax on Bahamians versus foreigners. It’s a tax on a type of game,” Mr Johnson repeated.

The comments directly contradicted those of the attorney general, who told other news media that the casinos were being spared from a patron winnings-style tax because they are critical to a tourism industry that generates thousands of jobs, hundreds of millions of dollars in economic activity, and is the country’s biggest foreign exchange and tax revenue earner.