The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet minister says the government aims to correct an “embarrassing oversight” in failing to specify when the web shop patron winnings tax takes effect “within the next 30 days”.

Dionisio D’Aguilar, pictured, minister of tourism and aviation, told Tribune Business that the regulations failed to give the date for when the tax would start when they were laid in the House of Assembly last year.

“I think the legislation did not have an effective date,” Mr D’Aguilar said. “Most regulations have an effective date, and I’ve come to learn that was not included in the legislation and regulations when they were passed.”

“I’m not quite sure of the process, but we have to either re-lay the regulations [in the House of Assembly] or do an amendment to the existing version to put in an effective date. It was one of a number of oversights on the gaming legislation so we’re seeking to have it corrected.”

Mr D’Aguilar, who has ministerial responsibility for gaming regulation, added that the deficiency would be corrected “hopefully within the next 30 days”. Asked whether the oversight was somewhat embarrassing for the Government, he replied: “I would agree with that conclusion.”

Kenyatta Gibson, the Gaming Board’s chairman, recently confirmed to this newspaper that the implementation of the patron winnings tax now needed to be “gazzetted” by the minister.

The date oversight has added further delay to the levy’s imposition, as web shop operators were last year afforded additional time to have their games tested and certified by independent laboratories that the terms and conditions had not been altered due to the tax’s introduction.

“I am advised of the view that all [games] have been vetted and checked, and whatever process they have to go through has been done in order for their software to be tested so that this winnings tax can be rolled out,” Mr D’Aguilar told Tribune Business.

“If my memory serves me correctly it was going to be around $10m to $15m in revenue generated. The Gaming Act was passed in July and gazetted on October 1.”

A Gaming Board spokesman yesterday confirmed: “All of the games have been tested and approved by three testing laboratories. There is GLI, Gaming Laboratories International, which is the same testing laboratory used in other gaming jurisdictions like Las Vegas and elsewhere, BMM and SIQ.”

The new winnings tax, when it eventually comes into effect, will see five percent paid on winnings up to $1,000 and 7.5 percent on anything greater than $1,000.

Mr D’Aguilar told the House of Assembly earlier this year that just 45 percent of web shop gaming activities will attract the new patron “winnings” tax with online casino spins remaining untouched “for now”.

He added that the Government had decided to focus this levy solely on lottery/numbers operations because it was too “complicated” to calculate the winnings from online casino spinning.

Mr D’Aguilar said this “small tax on winnings” was projected to yield between $10m-$15m annually for the Public Treasury and help take the government closer to the $50m total web shop revenue target it had envisioned under the initial tax structure for the industry.

He indicated that Bahamian gamblers had got off relatively lightly, as the comparable winnings tax rates in Jamaica and Barbados are 15 percent and 20 percent, respectively. In the US, he added that the federal tax rate was 25 percent, with state and local taxes on top of that.

Sebas Bastian, Island Luck’s principal, previously told Tribune Business that the patron “winnings” tax was “a wild card” for the Bahamian web shop industry given that it was difficult to predict how customers will react to the levy.

“The patron lotto winning tax is going to be a wild card, though such a tax exists in many other regulated gaming jurisdictions,” the Island Luck chief said.

“This winning tax is new to this gaming culture, so we can predict if player payout is less, that player has less to re-bet with. At the end of the day the new Bill’s changes seem to correct some errors that were made in the previous tax methodology and assumptions.”

The revised taxation structure to be paid directly by web shop operators has already gone into effect. All licensed gaming operators pay 15 percent on their first $0 to $24m of revenue, and operators earning anything greater than $24m will pay 17.5 percent on sums above that threshold.