The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian web shop operator’s challenge to the Gaming Board taking $1m from its accounts to finance development of an industry-wide compliance and monitoring system has been rejected by a judge.

Justice Andrew Forbes, in an October 13, 2023, decision refused to grant Chances Games and its parent, Jarol Investments, permission to initiate a Judicial Review action against the industry regulator because the proceedings were “woefully out of time” when launched. And he also found that the gaming operator had not exhausted all other legal options.

Hinting that Chances still has “a remedy” if it remains dissatisfied with the Gaming Board’s actions and decision, the Freeport-based judge noted that the dispute’s origins dated to the time when the COVID-19 pandemic hit The Bahamas in February/March 2020.

As part of Chances’ licence, under the Gaming House Act and Gaming House Regulations 2014, it was required to invest “in a computer system properly configured” so that the Gaming Board’s central electronic monitoring system could have unrestricted access to its data, “including but not limited to a system with the ability for continuous online real-time recording, monitoring and control of significant gaming transactions”.

Chances, though, alleged that the Gaming Board has “failed to set up and maintain” such a central electronic monitoring system as required by the regulations. “Further, it is alleged that the Board withdrew monies from [Chances] investigative deposit accounts to pay Infrasoft Technologies for the development and implementation of” this system “without any consultation with management before,” Justice Forbes wrote.

A total $947,919 was allegedly withdrawn by the Gaming Board to finance its monitoring system. This was broken down into $780,452 for Infrasoft, $145,785 in “agent fees”, and $21,692 to another technology provider, MicroNet, all of which was to finance the contract between Infrasoft and the gaming regulator.

“The intended claimant [Chances] also alleges that the Board has failed to perform its duty, whether expressly or by implication, or is guilty of withdrawing funds from the accounts to pay Infrasoft for works not related to the recovery of investigation costs for the grant or renewal of a licence,” Justice Forbes added.

“That it had a legitimate expectation of consultation with the Board before the Board decided to embark on a capital project that would involve using funds out of the accounts, and the proper thing to do was to consult beforehand before departing from standard conduct and practice of withdrawing funds from the accounts to fund an asset for the Board which is outside the Board’s remit.

“Moreover, it is alleged that to-date Infrasoft has not developed and implemented the central electronic monitoring system interface. However, the Board continues to withdraw inordinate sums of money from [Chances] accounts to pay for the balance of the contract.”

Chances first wrote to Ian Tynes, the Gaming Board’s secretary, on March 9, 2020, setting out its concerns over the “deducted charges from the accounts and that such charges did not represent a legitimate contribution that requires gaming house operators to provide for the Infrasoft project”.

Mr Tynes replied on March 26, 2020, citing three separate sections in the Gaming House Act that he asserted “gave the Board the authority to recover from [Chances] accounts and all charges attributable to the installation of a central electronic monitoring system”. The Act’s accompanying regulations were also cited as giving the Gaming Board the necessary powers.

Chances’ attorneys again wrote to Mr Tynes on September 30, 2022, to repeat concerns about “the Board’s continuous withdrawal of funds” from the web shop’s accounts. They then sent a demand letter on April 8, 2023, requesting “full disclosure concerning all related activities, expenditures and scope of works of the installation of the central electronic monitoring system” by Infrasoft.

Mr Tynes replied on May 8, 2023, advising that the Gaming Board was “preparing a thorough update regarding the implementation” and associated expenses within 14 days of his writing. That update has still not been released, hence Chances move to launch a Judicial Review action.

The gaming operator alleged that “any reduction in its profit margin” and profits, caused by events such as the Gaming Board’s withdrawals from its accounts, “could result in downsizing which directly impacts all of its employees and some Bahamians’ quality of life” as well as threatening its donations to non-profits, charities and social and recreational activities.

Chances, in unveiling its Judicial Review, sought a declaration that the Gaming Board acted unlawfully in withdrawing funds from its accounts to finance the compliance system. It also wanted a declaration that the regulator “acted unreasonably by continuing to withdraw funds” when the project was on “indefinite hold”.

It also sought an Order that the Gaming Board stop withdrawing monies, and another ruling that it be reimbursed by restoring the accounts to their original position. The web shop operator then sought a declaration that the funds were supposed to be “used exclusively for the recovery of investigation costs”, plus an accounting by the Gaming Board.

However, the Supreme Court first has to give permission for an applicant to bring Judicial Review proceedings, and Justice Forbes found that Chances had not met all the qualifying criteria required before leave can be granted.

While it had sufficient standing to bring the action, the judge noted that Judicial Review cases must be brought within six months from the date when the grounds for the action arose. Chances’ case had its roots in Mr Tynes’ letter of March 26, 2020, which was more than three years ago, and thus Justice Forbes found the web shop operator was “woefully out of time”.

While the web shop argued that both Hurricane Dorian and the COVID-19 pandemic prevented it from “promptly” bringing the action, Justice Forbes pointed to the adjustments the judicial system made via virtual hearings and said there were “no real obstructions” to the filing and submission of legal documents with the Supreme Court registry.

Chances and its attorney, Carlson Shurland KC, then argued that Mr Tynes’ May 8, 2023, letter should be the date when the Judicial Review clock started. However, Justice Forbes found in favour of arguments by the Attorney General’s Office, representing the Gaming Board, that subjecting that letter to Judicial Review was “premature”.

The judge, noting that the Act provides for any decision by the Gaming Board or minister to be appealed to the Supreme Court, said there was no evidence to show Chances “has exhausted all alternative remedies available” and suggested that one still existed given that the regulator has yet to provide the promised update.

As a result, he dismissed the Judicial Review permission application.