Sebas Bastian Photo: Moise Amisial
By FAY SIMMONS
Tribune Business Reporter
jsimmons@tribunemedia.net
ISLAND Luck’s co-founder yesterday called for hotel- based casinos to “pay their fair share” and an end to the rate disparity that sees web shops paying two-thirds of the gaming sector’s total tax contribution.
Sebas Bastian argued that “it’s about time” casinos such as those at Baha Mar and Atlantis pay the same rates, and amount, of tax to the Government as web shop gaming houses.
Speaking during a round table discussion featuring web shop principals, held at the Caribbean Gaming and Regulators Conference, Mr Bastian said that during negotiations with the Government over the industry’s legalisation, regulation and taxation it was initially suggested the sector would pay a tax rate equal to 25 percent of EBITDA (earnings before interest, taxation, depreciation or amortisation) or 11 percent of GGR (gross gaming revenue).
After talks with the then-Christie administration were completed, it was determined gaming houses would pay 11 percent of gross gaming revenue to the Government plus a 2 percent for community and charitable causes, which he considered a “deal”. However, the casinos pay a tax rate equal to 5 percent.
Now, Mr Bastian is calling out what he branded as the “disparity” between the tax rates paid by participants in the web shop gaming sector and those paid by the casinos. He suggested those levied on the latter should be increased.
“Now, 10 years later, I still have issue with this disparity in the tax between the land-based and the domestic gaming house operators. And I’m not sitting here suggesting that we should go down to 5 percent because I think that would be grossly unfair to my country,” Mr Bastian said.
“What I am saying is it’s about time that they come up and pay their fair share as well to the taxes. But, nonetheless, we are today, we’re at 15 percent and 17.5 percent of gross gaming revenue because it went up by 36 percent back in 2019. So, we’re still paying taxes, and we just hope that the taxes are being spent wisely and well to the betterment of the country.”
Revenue figures released with the 2024-2025 Budget show the web shops, or gaming houses, generate more than double the annual tax revenue collected from casinos.
In the 2022-2023 fiscal year, for example, while casinos paid a collective $20.829m to the Public Treasury, the web shops generated $43.058m - a figure more than double, or 106.7 percent higher, than their hotel counterparts. The pattern was repeated during the first nine months of the current 2023-2024 fiscal year, as $24.985m in web shop taxes dwarfed the $11.284m collected from casinos.
For the 2023-2024 full-year, domestic gaming houses or web shops were forecast to generate the majority of gaming-related taxes at $36.02m or 57 percent of the $63.264m total. Casinos were to pick up the balance at $27.244m. A similar split is predicted for the upcoming 2024-2025 fiscal year, with web shops forecast to generate $39.459m in taxes compared to $22.885m coming from casinos.
Hotel-based casinos typically attract tax breaks and other concessions as a result of the Heads of Agreements that the mega resorts, of which they are part, agree with the Government.
This is at least a partial explanation for the seemingly more favourable tax treatment they obtain when compared to the web shops, especially since the casinos are seen as a key part of the tourism product and in helping to attract a particular visitor segment to The Bahamas, thereby boosting foreign exchange earnings.
Meanwhile, Craig Flowers, the FML Group’s principal, said the domestic gaming industry was operating “at warp speed” when compared to banks at the time it was legalised in 2014. The Government. he added, “inherited” a fully functioning industry build by gaming house operators.
He said: “I’ve had a rollercoaster with this tax thing... Keep in mind, we had an industry operating as efficient, as smooth, as fast, as vibrant as any bank. We have mobile devices, we have technology, we have developers, we have ATMs, we have everything tied to our platform. We were moving at almost warp speed comparative to banks.
“So when the regulations came, they came in and offered an industry already designed for most part by us. There were no developments to be made by the Gaming Board. The Gaming Board and the Government inherited us with all the hard work and the ingenuity and the amount of day, nights, evenings sacrificed.”
Mr Flowers conceded that having to pay taxes was a “struggle” for domestic gaming houses, and the issues surrounding it will likely exist “for some time”.
He said: “The taxes were a struggle for us, but understand that we were in a whirlwind with policymakers, with an industry which we built from scratch to where it was, and we were quite proud of what we had produced. So yeah, taxes were certainly a major issue for us in this journey, and like Sebastian says, it probably will be around for quite some time.”
Comments
hrysippus 4 months, 2 weeks ago
There is a huge difference in the effects on our society between the hotel casino and the Bahamian owned gambling houses. Both businesses make large profits by taking money from their gambling patrons; the difference is that the hotel casinos, while employing many Bahamians do not, by law, take any money from Bahamian citizens or residents, there is no adverse effect on the finances of locals. Conversely the local gambling houses do take money from the Bahamian citizens Most if not all of their money comes from locals. This may lead to financial distress to those who become addicted.
Porcupine 4 months, 2 weeks ago
You are right, but much, much too charitable.
Porcupine 4 months, 2 weeks ago
My God, The fact that these two, in a fully functional society would not be worrying about taxes, but about how many cigarettes they would need to keep themselves from being raped every night as they spent the many years in jail for operating illegally within this country speaks volumes on how degenerate these web shop owners are. Clearly, the web shops contribute to the declining quality of life in this country, from theft by way of employment, as was spoken to from the owner of Super Value, to the social services needed to help out people with a gambling addition, to the monies going directly out of our national economy and into the pockets of, what's the best word to use for these web shop cretins? My God! And then, to have the audacity to say that they should be taxed at the same rate as the casinos, which bring in hard currency from abroad. Why don't the powers to be in this country stand up and tell Sebas and Flowers to take a hike and to be thankful that they are still allowed to walk among the rest of us. What has this country come to, that everyone in positions of Central Bank, to OPM do not have the balls or the brains to tell these idiots that we are not all stupid. These guys sucks our country dry, while at least the casinos contribute in various ways to the Bahamian economy. Tax the web shops out of existence and start up a national lottery as was suggested. This only goes to prove that we have the criminals running this country. This includes every politician who went along with this nonsense.
AnObserver 4 months, 2 weeks ago
Hotel/Casinos are a net benefit to the country, providing jobs and increasing the GDP. Numbers houses are a leach, sucking the lifeblood from the country. Why exactly are they legal again? Didn't the majority of the country vote against legalization?
John 4 months, 2 weeks ago
The majority of the country didn’t want casinos either but the government decided to bow to the hotel owners who need to compete with the cruise ships. Only an uneducated person will call web shops leeches but praise casinos with the same breath. They operate on the same basic fundamentals and many tourists have to ‘hike a ride’ home and out of The Bahamas After they lose their clothes and their vacations in the hotel casinos.
Porcupine 4 months, 2 weeks ago
John Your lack of education comes through in your comments. Concessions are always given to new money coming into any economy. You obviously lack a basic understanding of economics, Your comments further dumb down our country.
John 4 months, 2 weeks ago
The fact that hotel casinos do not have Bahamians as patrons is even more reason they should be TAXED like Bahamians! This is NEW money coming into the country and government should get its fair share of taxes before the profits ( huge) are bundled up and shipped out of the country. Think of how stupid this Bahamians carry the largest portion of the tax burden ( not just for gambling) but foreigners control the most lucrative sectors of the economy and pay the LEAST amount of taxes. FIX IT !
Porcupine 4 months, 2 weeks ago
It is called regressive taxation, which Bahamians go along with by continuing to vote these politicians in. Do you vote? Then you are part of the problem, John. Exactly where our D- national average education gets us.
ExposedU2C 4 months, 2 weeks ago
There is much I could say about the horrific scourge and blemish on our society that these two sleazy racketeering criminal thugs (Bastian and Flowers) have been allowed to create by the likes of Vomit Christie, Stumpy Coward Davis and Slo Mo Sears, but I will limit my comments to the following two most devastating impacts:
1) Their 'illicit' web shop gaming and other activities have greatly weakened our domestic financial system by stripping away from the local banks diversified deposit taking and lending opportunities that would otherwise exist not to mention the harm caused to vital correspondent banking relationships in the U.S., U.K. and Europe.
2) Their ferocious opposition to the establishment of a national lottery with the profits exclusively earmarked to help fund both our grossly under-resourced and dysfunctional public healthcare system and public education system.
I am fully in favour of all businesses operated by these two slime balls, Bastian and Flowers, being taxed to death or, better still, taxed out of existence. The PLP should never have legalized the criminal gaming enterprises that these two scoundrels were allowed to operate by financially backing corrupt politicians for decades.
propane66 4 months, 2 weeks ago
How the hell they got legalised when 2/3rd of the country voted NO......what a waste of time having a referendum.
Every corner these web shops are on , sucking the spare money from the locals out of the economy.
Now they are too big with the employment numbers they must have, so we are stuck with them.
ExposedU2C 4 months, 2 weeks ago
And @John above works for one of them!
bahamianson 4 months, 2 weeks ago
Fare sharw is people go to jail for crimes commityed.
GodSpeed 4 months, 2 weeks ago
lol the crooks calling the shots after spitting in the face of the law and milking the most desperate people for everything they got for decades, tax them 90% then.
DiverBelow 4 months, 2 weeks ago
For the benefit of those who dream of receiving "riches for doing little" let 's have a National Lottery. Humans need dreams. The freely given contributions should be dedicated to the needs of the pathetic health & education system. Though a lottery is parasitic pyramid game on society, if operated correctly IT Could Provide What The Next Generations Need. Keep the Politically Elite out of it. Convicts don't 8change their stripes. ...How many Millions in the next FL Lottery Win?
Porcupine 4 months, 2 weeks ago
Right on!
ThisIsOurs 4 months, 2 weeks ago
The problem with a national lottery is "at this stage" it will be these same actors running it, basically a slightly altered version if any of the current system.
ExposedU2C 4 months, 2 weeks ago
No, not so at all. There are plenty of effective guard rails that could be put in place to prevent this from happening. The professional operators of the highly successful Florida State Lottery long ago indicated a willingness to assist in that regard under a reasonable arrangement that would be mutually beneficial to both the State of Florida and The Bahamas.
Truth be told, the racketeering criminal thugs like Sebas Bastian and Craig Flowers need to be put out of business once and for all. Their illicit activities continue to place our entire domestic financial system at risk and they have greatly distorted both our foreign currency reserves and, like our corrupt government, the proper allocation of our country's scarce capital resources.
The PLP government should never have attempted to illegally 'legalize' the criminal gaming enterprises of these sleazy thugs against the wishes of the Bahamian people as was expressed in the outcome of a duly held national referendum many years ago when the very corrupt Vomit Christie was PM.
Porcupine 4 months, 2 weeks ago
I appreciate your straightforward, irreverent, but truthful comments. No positive change for humanity has ever come about by remaining silent.
Regardless 4 months, 2 weeks ago
Nothing worse than an arrogant criminal trying to dictate fiscal policy.
bahamianson 4 months, 2 weeks ago
He is tryimg to ñaunder his guilt. He feels if he gives money back he can clear his concsi3nce
ThisIsOurs 4 months, 2 weeks ago
"Government. he added, “inherited” a fully functioning industry build by gaming house operators"
God only knows what else they inherited from decades of illegal activity. Casinos and gambling are operations that notoriously go hand in hand with money laundering, prostitution, sex trafficking, drug dealing and in the Bahamas human smuggling.
If urban legend is to be believed precisely how casinos got here in the first place after fleeing newly communist Cuba
truetruebahamian 4 months, 1 week ago
It is beyond time to close down these web shop criminals entirely and establish a national lottery instead. It can be done.
Sign in to comment
OpenID