From:TheBahamasWeekly.com
Hon. Obie Wilchcombe Bahamas Gaming Bill Communication
Sep 3, 2014 - 5:12:34 PM
Nassau, Bahamas - The Hon. Obediah H. Wilchcombe, Minister of Tourism's Communication on the Gaming Bill (1st Reading) in the House of Assembly on September 3rd, 2014:
Mr.
Speaker,
I am pleased today to bring to Parliament a new
cutting edge comprehensive Gaming Bill, Gaming Regulations and Gaming House
Regulations, which are designed to more effectively control and revolutionize
Gaming in The Bahamas for the greater benefit of the economy and people of our
country.
In 1969, the Lotteries and Gaming Act (“the
Act”) was passed by the Parliament of The Bahamas, and ushered in the licensing
and regulation of casino gaming, under the authority of a gaming license. The
Act has been amended sporadically since the coming into operation thereof in
1969, for the most part by the enactment of Regulations to make provision for
additional procedures and requirements, as well as to expand the range of
activities authorized by a gaming license to include sports betting and
pari-mutuel wagering.
The most recent amendments to the
Regulations were enacted in 2004, with the result that the Regulations
themselves have not kept pace with changing operational requirements or
technological advances. Collectively, this results in a somewhat piecemeal
dispensation which has been broadened on an
ad
hoc basis and is now in need of a comprehensive overhaul, based on a clear
policy direction.
Mr. Speaker,
The financial performance of the existing
casinos has been severely affected by the global economic downturn, with
revenue having declined across the board. The declining performance of the
existing casinos in The Bahamas is also a function of the nature and content of
the gaming dispensation for which the law currently makes provision, as well as
the manner in which the industry is regulated, and the nation would be well
served by the modernization thereof.
Numerous jurisdictions throughout the world
have noted the dramatic expansion, in recent years, of the gaming offering,
primarily as a result of technological advances, and have responded by
reviewing and updating their gaming laws in order to remain globally
attractive, to accommodate shifting consumer tastes in an increasingly
discerning market, to stimulate tourist visitation and to generate revenues.
Mr. Speaker,
Against the backdrop of the above, specific
proposals have been made by licensed industry stakeholders in The Bahamas
regarding the measures that may be taken in advancing the attainment of the
above objectives. These include:
(i)
permitting
non-continuous gaming floors with multiple cashier’s cages;
(ii)
providing for
the dual rating of employees;
(iii)
permitting
private gaming areas;
(iv)
liberalising
the credit dispensation;
(v)
imposing entry
levies for certain categories of permanent residents;
(vi)
provisions for
the enforcement of gaming debts;
(vii)
tax-exemptions
in respect of imported gaming equipment;
(viii)
permitting
licensed casinos to establish an online presence for the purposes of offering
gaming;
(ix)
permitting
casinos or their gaming service providers to accept betting in-running (or live
betting) on sporting events;
(x)
authorising
the establishment of independent testing laboratories in The Bahamas for the
testing of gaming devices against defined standards;
(xi)
providing for
the licensing of junket agents within defined parameters;
(xii)
provision for
approval processes in relation to gaming equipment tested;
(xiii)
the creation
of technical specifications for mobile gaming devices/platforms and wireless
gaming systems interfacing with communication devices operated exclusively by
licensed casinos;
(xiv)
provision for field trials in respect of gaming
equipment which has been certified as complying with the applicable standard,
pending approval thereof by the regulator;
(xv)
provision for
a three-yearly, as opposed to an annual, renewal process in respect of certain
licences;
(xvi)
the establishment of defined procedures for the
management and resolution of patron disputes, and
(xvii)
the adoption of measures regarding responsible gambling.
Mr. Speaker,
The Gaming Bill, 2014 and the proposed
Regulations make provision for the adoption of a large majority of the above
recommendations, in some cases subject to certain refinements. The primary
objectives are to create a streamlined, user-friendly, efficient licensing and
regulatory regime, overseen by a financially sustainable regulatory authority,
which is responsive to the following critical objectives:
Driving
revenue, so as to increase the tax base and stimulate job growth;
Creating a
sustainable competitive advantage for the gaming sector in The Bahamas, and
Increasing
Tourism, using the gaming industry as a springboard.
A number of provisions of the existing
Lotteries and Gaming Act and the various Regulations deal with detailed
operational procedures and processes which are not issues of legislative policy
and are therefore more appropriately contained in Rules to be made by the Board
or the Internal Control Standards of license holders.
The Gaming Bill sets forth the key issues
of policy in terms of which the various sectors of the gaming industry in The
Bahamas will be licensed and regulated, while the proposed Regulations put in
place the primary procedures and mechanisms by means of which these policy
objectives are to be attained. Separate Rules have been drafted for adoption by
the Board, which set forth certain detailed requirements with which license
holders must comply in key areas of their licensed operations on a day-to-day
basis. The internal procedures to be adhered to by license holders in order to
ensure compliance with the Act, the Regulations and the Rules, will be
contained in Internal Control Standards to be submitted to the Board for
approval. The Gaming Bill and the proposed Regulations and the proposed Rules
respectively provide detailed guidance regarding the minimum standards with
which such Internal Control Standards will be required comply.
Mr. Speaker,
The current legislative and regulatory
dispensation does not make provision for the streamlined and focused licensing
and regulation of the industry by a financially self-sufficient Board. The
human resources of the Board are not effectively applied to ensure that the
regulation of the industry is based on identifiable risks in the gaming
environment. The performance of the regulatory functions of the Board is to a
large degree focused on being physically represented in licensed casinos to monitor
and verify activities which are under constant surveillance and which can be
audited on an
ex post facto basis.
This is largely a function of the fact that the current legislation dates back
to a time where physical monitoring and regulation was appropriate, given the
absence, at that stage, of the technological controls which are now common in
the gaming environment. Resources are also unduly taken up by the annual
repetition of probity investigations in relation to persons employed in the
gaming environment.
As a result, it is important that the focus
should be shifted to risk-based regulation. In addition, it is important that
the Board itself should be properly equipped to exercise its regulatory powers
and functions in an effective manner. In order to achieve this, it is necessary
to ensure that persons appointed to membership of the Board have a range of
particular qualifications which, collectively viewed, will enable the Board to
call upon a balanced set of skills in the exercise of its various
decision-making functions. Accordingly, the four-member Board should include an
appropriately qualified legal practitioner, a qualified accountant or auditor
and such other members as have knowledge or experience in other areas which are
germane to the functioning of the Board. This will enable the Board to perform
the various functions assigned to it, including the evaluation of applications,
the conduct of investigations and hearings, the making and enforcement of Rules
and its compliance monitoring of licensed operations, from a position of
strength.
In addition, the Board should ideally be a
financially sustainable entity in its own right, rather than being subsidised
by the Government. In accordance with international best practice, licences and
other approvals for the conduct of gaming should be regarded as valuable
concessions granted by the Government, in consideration for which fees are due.
The investigation costs incurred by the Board, as well as the annual costs of
compliance monitoring, should be funded by the industry. For this purpose,
provision has been made for various categories of licence, as well as
certificates of suitability, all of which are annually renewable and subject to
such conditions as may be imposed and all of which attract fees on an ongoing
basis. It should be noted, however, that
the Board will be required to incur certain further costs in the context of
information technology infrastructure and resources, training, consultancy
services and related matters.
Mr. Speaker,
The structure of the legislation is a
further aspect of which note should be taken. As previously noted, the core
policy issues regarding the licensing and regulation of the industry are
captured in the Gaming Bill, while the primary procedures and mechanisms
required to achieve the policy objectives are set forth in the Regulations. In
the context of the detailed procedures and processes which form part of the
day-to-day operations of the industry, however, the Board is vested with the
power to make Rules, subject only to the concurrence of the Minister
responsible for the administration of the Gaming Act (“the Minister”), which
are not required to be assented to by Parliament for their enactment or
amendment. This enables the day-to-day operation of the industry to keep pace
with rapidly developing technological advancements, so that it is able to
remain vibrant, current and competitive.
In addition to the above, in accordance
with prevailing international standards of best practice, licence holders are
required to submit internal control standards to the Board for approval.
Internal control standards proceed from the objective of ensuring to the
greatest degree possible, the proper, efficient and compliant conduct of
licensed gaming operations. In the context of a licensed casino, for example,
an ICS is developed by collating all the legislative and regulatory
requirements which apply to the casino industry, including the Act, the
Regulations and the Rules, as well as the provisions of other legislation applicable
to its operations, such as the provisions of anti-money laundering and
financial transaction reporting legislation, and then developing and describing
the procedures which must be adhered to in order to ensure compliance with
these requirements at all times and on all levels of the operation.
Accordingly, the legislation, both primary and subordinate, describes what must
be achieved and to a certain extent, minimum standards and procedures required
to ensure the achievement thereof, while an ICS describes, at a far greater
level of detail, the operational steps which licence holders will implement to
ensure compliance.
Mr. Speaker,
In the context of licensing and the issue
of certificates of suitability, the Board is vested with the power to grant, refuse,
suspend and revoke employment licences, junket operator licences and supplier
licences, and to impose, withdraw and amend conditions in respect thereof. It
may also exercise similar powers in relation to applications for certificates
of suitability, other than certificates of suitability to be granted in respect
of gaming service providers. However, in
the context of applications for gaming, proxy gaming, mobile gaming and licences
and certificates of approval applied for by corporate entities, as well as the
approvals required in respect of gaming service providers, the ultimate
decision is vested with the Minister. The Gaming Bill makes provision for a
mandatory approval process in relation to these applications, so as to ensure
that administratively fair procedures will be followed in relation to all
aspects of the approval process, including the imposition of conditions.
In the context of revenue generation,
provision will be made in Regulations to be made in under the Act for the
gaming taxes generated by licensed activities to be paid to the Board itself.
Within seven days of the receipt of such taxes, the Board is obliged to pay
same over into the Consolidated Fund. Penalties and interest may be imposed in
respect of the underpayment of taxes due.
The proposed tax collection procedures
enable the Board to monitor the proper calculation and payment of taxes on an
ongoing basis, and to take immediate remedial action where these are not paid
in the correct manner or quantum. The basic taxes payable in respect of casinos
have remained unchanged, as have the tax rates (calculated on a sliding scale)
in respect of gaming revenue on existing games.
New licenses, taxes and fees are provided for with respect to restricted
interactive gaming, proxy gaming and mobile gaming.
Mr. Speaker,
The financial implications of the proposed
dispensation are positive, inasmuch as the legislative dispensation has been
structured in such a manner as to provide the Board with an ongoing income
stream designed to cover the costs of its licensing and regulatory functions.
It is anticipated that the Board will begin to move towards a position of
financial self-sufficiency as a result of this.
The Gaming Bill empowers the Minister to
set the fees in respect of the various licenses, certificates and approvals
contemplated therein by Regulation. This
approach will allow for greater flexibility in the amendment of the fee and/or
taxation structures in the future.
Mr. Speaker,
The modernisation of the gaming dispensation, and the
new offerings which licence holders will be in a position to provide, as well
as the provision of the Rule-making function of the Board, which will enable
the industry to remain current in its offerings, are all expected significantly
to enhance The Bahamas as an international gaming destination, resulting in a
substantially enhanced revenue generation potential for the nation as a whole.
The new licence types created by the Gaming
Bill are expected to translate into the creation of additional employment
opportunities in The Bahamas, particularly in the area of communications and
information technology.
Mr. Speaker,
In the drafting of the Gaming
Bill, the proposed Regulations and the Draft Rules, account has been taken of
other legislation having a bearing on the subject matter of the proposed
legislation, including –
(a)
The
Constitution,
(b)
The Criminal
Procedure Code Act,
(c)
The Financial
Administration and Audit Act, 2010,
(d)
The Financial Transactions
Reporting Act, 2000,
(e)
The Financial Transactions Reporting Regulations, 2000,
(f)
The Financial Intelligence Unit Act, 2000,
(g)
The Financial Intelligence (Transactions Reporting) Regulations, 2001
and
(h)
The Proceeds of Crime
Act, 2000.
Mr. Speaker,
As foreshadowed during the last Budget debate,
my Government’s position on the regularization of web shop gaming has evolved
as a result of certain realities which have emerged, following the outcome of
the Referendum on this issue. These
realities can no longer be ignored. The
Governor of the Central Bank has drawn attention that web shops operators were
acting as bankers and hiring bank employees for this purpose. Concern has been expressed with regard to the
violations of the country’s international obligations, which could have severe
consequences for The Bahamas vital financial services industry. After wide consultation and in order to
preserve and protect the national interest, my Government has decided that the
right thing to do in the circumstances is to regulate web shop gaming. We have heard the views and dialogued with
the various groups who either support or are opposed to Gaming. We value, respect and understand their
position. Nevertheless we are caught in
a situation where the Government must govern and regulate.
Provisions
has been made in the Gaming Bill and in the elaborate regulations thereunder,
for a regularization process in relation to current web shop operators, as well
as for appropriate transitional provisions, in conformity with international
best practices and in full compliance with the prevailing anti-money laundering
and counter terrorist financing requirements.
Consultation led by the Attorney General has taken place with the
Financial Action Task Force to ensure that the provisions of the proposed
legislation and procedures will be in compliance with FATF guidelines so as to
ensure acceptance by banks of proceeds from legalized and regulated casinos and
web shop operators. In this regard,
consultation continues with clearing banks operating in The Bahamas.
The objective of this exercise
is not to foster the proliferation of gaming among Bahamians but to control and
regulate it. There will be a fixed
number of web shop operator licenses as well as web shop premises. Licenses will be granted pursuant to detailed
criteria to be set forth in an RFP, containing appropriate minimum criteria for
the licensing of web shops, on the basis of which the application and licensing
process will be managed.
The Gaming Bill and
Regulations will provide for applicable features of a successful, responsible
gaming strategy including public education, protection and treatment of
gambling addicts. It is envisaged that
through a public-private sector initiative a Foundation with a Board of
Directors, with an independent Chairperson, will be set up to administer the
programme to be funded by the gaming industry.
The public awareness and prevention component of the programme would be
focused on taking proactive measures to inform the public of the potential
dangers of gaming, the nature of gaming addiction and the symptoms of problem
gaming, with a view to preventing problems before they occur, rather than
simply responding to these problems once they have arisen.
In addition to fees, taxes
and penalties which will be applied to web shop gaming operators, provisions
will also be made for contributions to charitable and social causes. Consultation continues to take place with
casino and web shop operators and other relevant parties as the process moves
forward.
Mr. Speaker,
The new law will provide for the
issuance of a Gaming House Operator Licence to existing operators. In addition to the issuance of licences to
Gaming House Operators, the new Gaming Bill will provide for the issuance of
Gaming House Premises Licences and Gaming House Agent Licences.
Gaming
House Operator Licence
shall be issued only to a fully Bahamian-owned
company and may only be applied for in response to a formal invitation to apply
for such licence.
Gaming
House Premises Licence
provides for a
separate gaming house premises licenses to be issued in respect of the
dedicated premise. The Gaming Bill
stipulates the nature of the gaming activities which may be conducted on such
premises and again may only be applied for in response to the RFP.
Gaming
House Agent Licence
will cover the existing arrangements
whereby third party agents of the current web shop operators accept cash
betting on the numbers game on their business premises, pursuant to an
agreement entered into with the web shop operator, and against payment of a
commission and shall
authorise the conduct on licenced premises—
(i)
of cash betting transactions only;
(ii)
on the numbers game only; and
(iii)
with domestic players only.
The new Gaming Bill provides for supplier licenses which will be required by
every person who distributes repairs, maintains, alters, modifies or otherwise
directly supplies any gaming device, and may only be issued to a company.
Mr. Speaker,
Provision has also been made in the Gaming Bill for two
additional categories of licenses, namely key employee licenses and gaming
employee licenses. A key employee license
is required by every person who may exercise direct control over gaming
operations or activities authorized by the principal license, or such other
person whom the Board may identify.
These persons will include, managers, supervisors, pit bosses, etc. A gaming employee license is required by
every person who is employed by the holder of the principal license and who is
directly involved in activities performed under that license, but excludes key
employees. Such persons would be,
cashiers, dealers, security personnel, etc.
These provisions represent a change from existing practices, under which
such persons are subjected to probity investigations on an annual basis, but
are “approved” by the Board.
The new legislation provides for
the various forms of lottery. A new provision
has been included in the Gaming Bill to empower the Minister to authorise the
conduct of a National Lottery in The Bahamas, and to appoint a service provider
to operate the national lottery under a management contract. The Gaming Bill further provides for the
Minister to make regulations (inter alia) governing the management contract.
The Gaming Bill also confirms the ongoing illegality of all other lotteries
other than -
(a) any national lottery that may be implemented;
(b) charitable lotteries;
(c) private lotteries;
(d) lotteries
which are incidental to certain entertainment events; and
(e) the
numbers game, when offered by the holder of a gaming
house operator licence.
Mr. Speaker,
The
new legislation will also empower the Minister responsible for Gaming to make
Regulations permitting participation in the types of gaming contemplated in
casinos and gaming houses by any category or all categories of persons, which
may regulate the circumstances under which and the conditions subject to which
such participation shall be permitted.
Mr. Speaker,
I
wish to express appreciation to the team of officials who have worked
tirelessly on these new measures with their many complex issues, along with our
gaming consultants AG Consulting of South Africa and Grant Thornton Accounting
firm. These officials were drawn from
the Office of the Prime Minister, the Office of the Attorney General, the
Ministry of Finance, the Ministry of Tourism and the Gaming Board.
Mr. Speaker,
I am pleased to be able to introduce and
lay on the table of Parliament the following:
·
Gaming Bill, 2014,
·
Gaming Regulations, 2014,
·
Gaming House Operators Regulations, 2014,
·
Financial Transactions Reporting (Amendment) Bill,
2014
·
Financial Transactions (Gaming Exemptions)
Regulations, 2014 and
·
Proceeds of Crime (Amendment) Bill, 2014
Obediah H.
Wilchcombe
Minister of Tourism
&
Member of
Parliament, West End and Bimini Constituency
HON. OBEDIAH H. WILCHCOMBE
MINISTER OF TOURISM
COMMUNICATION ON THE GAMING BILL (1ST READING)
HOUSE OF ASSEMBLY
3rd SEPTEMBER 2014
Mr.
Speaker,
I am pleased today to bring to Parliament a new
cutting edge comprehensive Gaming Bill, Gaming Regulations and Gaming House
Regulations, which are designed to more effectively control and revolutionize
Gaming in The Bahamas for the greater benefit of the economy and people of our
country.
In 1969, the Lotteries and Gaming Act (“the
Act”) was passed by the Parliament of The Bahamas, and ushered in the licensing
and regulation of casino gaming, under the authority of a gaming license. The
Act has been amended sporadically since the coming into operation thereof in
1969, for the most part by the enactment of Regulations to make provision for
additional procedures and requirements, as well as to expand the range of
activities authorized by a gaming license to include sports betting and
pari-mutuel wagering.
The most recent amendments to the
Regulations were enacted in 2004, with the result that the Regulations
themselves have not kept pace with changing operational requirements or
technological advances. Collectively, this results in a somewhat piecemeal
dispensation which has been broadened on an
ad
hoc basis and is now in need of a comprehensive overhaul, based on a clear
policy direction.
Mr. Speaker,
The financial performance of the existing
casinos has been severely affected by the global economic downturn, with
revenue having declined across the board. The declining performance of the
existing casinos in The Bahamas is also a function of the nature and content of
the gaming dispensation for which the law currently makes provision, as well as
the manner in which the industry is regulated, and the nation would be well
served by the modernization thereof.
Numerous jurisdictions throughout the world
have noted the dramatic expansion, in recent years, of the gaming offering,
primarily as a result of technological advances, and have responded by
reviewing and updating their gaming laws in order to remain globally
attractive, to accommodate shifting consumer tastes in an increasingly
discerning market, to stimulate tourist visitation and to generate revenues.
Mr. Speaker,
Against the backdrop of the above, specific
proposals have been made by licensed industry stakeholders in The Bahamas
regarding the measures that may be taken in advancing the attainment of the
above objectives. These include:
(i)
permitting
non-continuous gaming floors with multiple cashier’s cages;
(ii)
providing for
the dual rating of employees;
(iii)
permitting
private gaming areas;
(iv)
liberalising
the credit dispensation;
(v)
imposing entry
levies for certain categories of permanent residents;
(vi)
provisions for
the enforcement of gaming debts;
(vii)
tax-exemptions
in respect of imported gaming equipment;
(viii)
permitting
licensed casinos to establish an online presence for the purposes of offering
gaming;
(ix)
permitting
casinos or their gaming service providers to accept betting in-running (or live
betting) on sporting events;
(x)
authorising
the establishment of independent testing laboratories in The Bahamas for the
testing of gaming devices against defined standards;
(xi)
providing for
the licensing of junket agents within defined parameters;
(xii)
provision for
approval processes in relation to gaming equipment tested;
(xiii)
the creation
of technical specifications for mobile gaming devices/platforms and wireless
gaming systems interfacing with communication devices operated exclusively by
licensed casinos;
(xiv)
provision for field trials in respect of gaming
equipment which has been certified as complying with the applicable standard,
pending approval thereof by the regulator;
(xv)
provision for
a three-yearly, as opposed to an annual, renewal process in respect of certain
licences;
(xvi)
the establishment of defined procedures for the
management and resolution of patron disputes, and
(xvii)
the adoption of measures regarding responsible gambling.
Mr. Speaker,
The Gaming Bill, 2014 and the proposed
Regulations make provision for the adoption of a large majority of the above
recommendations, in some cases subject to certain refinements. The primary
objectives are to create a streamlined, user-friendly, efficient licensing and
regulatory regime, overseen by a financially sustainable regulatory authority,
which is responsive to the following critical objectives:
Driving
revenue, so as to increase the tax base and stimulate job growth;
Creating a
sustainable competitive advantage for the gaming sector in The Bahamas, and
Increasing
Tourism, using the gaming industry as a springboard.
A number of provisions of the existing
Lotteries and Gaming Act and the various Regulations deal with detailed
operational procedures and processes which are not issues of legislative policy
and are therefore more appropriately contained in Rules to be made by the Board
or the Internal Control Standards of license holders.
The Gaming Bill sets forth the key issues
of policy in terms of which the various sectors of the gaming industry in The
Bahamas will be licensed and regulated, while the proposed Regulations put in
place the primary procedures and mechanisms by means of which these policy
objectives are to be attained. Separate Rules have been drafted for adoption by
the Board, which set forth certain detailed requirements with which license
holders must comply in key areas of their licensed operations on a day-to-day
basis. The internal procedures to be adhered to by license holders in order to
ensure compliance with the Act, the Regulations and the Rules, will be
contained in Internal Control Standards to be submitted to the Board for
approval. The Gaming Bill and the proposed Regulations and the proposed Rules
respectively provide detailed guidance regarding the minimum standards with
which such Internal Control Standards will be required comply.
Mr. Speaker,
The current legislative and regulatory
dispensation does not make provision for the streamlined and focused licensing
and regulation of the industry by a financially self-sufficient Board. The
human resources of the Board are not effectively applied to ensure that the
regulation of the industry is based on identifiable risks in the gaming
environment. The performance of the regulatory functions of the Board is to a
large degree focused on being physically represented in licensed casinos to monitor
and verify activities which are under constant surveillance and which can be
audited on an
ex post facto basis.
This is largely a function of the fact that the current legislation dates back
to a time where physical monitoring and regulation was appropriate, given the
absence, at that stage, of the technological controls which are now common in
the gaming environment. Resources are also unduly taken up by the annual
repetition of probity investigations in relation to persons employed in the
gaming environment.
As a result, it is important that the focus
should be shifted to risk-based regulation. In addition, it is important that
the Board itself should be properly equipped to exercise its regulatory powers
and functions in an effective manner. In order to achieve this, it is necessary
to ensure that persons appointed to membership of the Board have a range of
particular qualifications which, collectively viewed, will enable the Board to
call upon a balanced set of skills in the exercise of its various
decision-making functions. Accordingly, the four-member Board should include an
appropriately qualified legal practitioner, a qualified accountant or auditor
and such other members as have knowledge or experience in other areas which are
germane to the functioning of the Board. This will enable the Board to perform
the various functions assigned to it, including the evaluation of applications,
the conduct of investigations and hearings, the making and enforcement of Rules
and its compliance monitoring of licensed operations, from a position of
strength.
In addition, the Board should ideally be a
financially sustainable entity in its own right, rather than being subsidised
by the Government. In accordance with international best practice, licences and
other approvals for the conduct of gaming should be regarded as valuable
concessions granted by the Government, in consideration for which fees are due.
The investigation costs incurred by the Board, as well as the annual costs of
compliance monitoring, should be funded by the industry. For this purpose,
provision has been made for various categories of licence, as well as
certificates of suitability, all of which are annually renewable and subject to
such conditions as may be imposed and all of which attract fees on an ongoing
basis. It should be noted, however, that
the Board will be required to incur certain further costs in the context of
information technology infrastructure and resources, training, consultancy
services and related matters.
Mr. Speaker,
The structure of the legislation is a
further aspect of which note should be taken. As previously noted, the core
policy issues regarding the licensing and regulation of the industry are
captured in the Gaming Bill, while the primary procedures and mechanisms
required to achieve the policy objectives are set forth in the Regulations. In
the context of the detailed procedures and processes which form part of the
day-to-day operations of the industry, however, the Board is vested with the
power to make Rules, subject only to the concurrence of the Minister
responsible for the administration of the Gaming Act (“the Minister”), which
are not required to be assented to by Parliament for their enactment or
amendment. This enables the day-to-day operation of the industry to keep pace
with rapidly developing technological advancements, so that it is able to
remain vibrant, current and competitive.
In addition to the above, in accordance
with prevailing international standards of best practice, licence holders are
required to submit internal control standards to the Board for approval.
Internal control standards proceed from the objective of ensuring to the
greatest degree possible, the proper, efficient and compliant conduct of
licensed gaming operations. In the context of a licensed casino, for example,
an ICS is developed by collating all the legislative and regulatory
requirements which apply to the casino industry, including the Act, the
Regulations and the Rules, as well as the provisions of other legislation applicable
to its operations, such as the provisions of anti-money laundering and
financial transaction reporting legislation, and then developing and describing
the procedures which must be adhered to in order to ensure compliance with
these requirements at all times and on all levels of the operation.
Accordingly, the legislation, both primary and subordinate, describes what must
be achieved and to a certain extent, minimum standards and procedures required
to ensure the achievement thereof, while an ICS describes, at a far greater
level of detail, the operational steps which licence holders will implement to
ensure compliance.
Mr. Speaker,
In the context of licensing and the issue
of certificates of suitability, the Board is vested with the power to grant, refuse,
suspend and revoke employment licences, junket operator licences and supplier
licences, and to impose, withdraw and amend conditions in respect thereof. It
may also exercise similar powers in relation to applications for certificates
of suitability, other than certificates of suitability to be granted in respect
of gaming service providers. However, in
the context of applications for gaming, proxy gaming, mobile gaming and licences
and certificates of approval applied for by corporate entities, as well as the
approvals required in respect of gaming service providers, the ultimate
decision is vested with the Minister. The Gaming Bill makes provision for a
mandatory approval process in relation to these applications, so as to ensure
that administratively fair procedures will be followed in relation to all
aspects of the approval process, including the imposition of conditions.
In the context of revenue generation,
provision will be made in Regulations to be made in under the Act for the
gaming taxes generated by licensed activities to be paid to the Board itself.
Within seven days of the receipt of such taxes, the Board is obliged to pay
same over into the Consolidated Fund. Penalties and interest may be imposed in
respect of the underpayment of taxes due.
The proposed tax collection procedures
enable the Board to monitor the proper calculation and payment of taxes on an
ongoing basis, and to take immediate remedial action where these are not paid
in the correct manner or quantum. The basic taxes payable in respect of casinos
have remained unchanged, as have the tax rates (calculated on a sliding scale)
in respect of gaming revenue on existing games.
New licenses, taxes and fees are provided for with respect to restricted
interactive gaming, proxy gaming and mobile gaming.
Mr. Speaker,
The financial implications of the proposed
dispensation are positive, inasmuch as the legislative dispensation has been
structured in such a manner as to provide the Board with an ongoing income
stream designed to cover the costs of its licensing and regulatory functions.
It is anticipated that the Board will begin to move towards a position of
financial self-sufficiency as a result of this.
The Gaming Bill empowers the Minister to
set the fees in respect of the various licenses, certificates and approvals
contemplated therein by Regulation. This
approach will allow for greater flexibility in the amendment of the fee and/or
taxation structures in the future.
Mr. Speaker,
The modernisation of the gaming dispensation, and the
new offerings which licence holders will be in a position to provide, as well
as the provision of the Rule-making function of the Board, which will enable
the industry to remain current in its offerings, are all expected significantly
to enhance The Bahamas as an international gaming destination, resulting in a
substantially enhanced revenue generation potential for the nation as a whole.
The new licence types created by the Gaming
Bill are expected to translate into the creation of additional employment
opportunities in The Bahamas, particularly in the area of communications and
information technology.
Mr. Speaker,
In the drafting of the Gaming
Bill, the proposed Regulations and the Draft Rules, account has been taken of
other legislation having a bearing on the subject matter of the proposed
legislation, including –
(a)
The
Constitution,
(b)
The Criminal
Procedure Code Act,
(c)
The Financial
Administration and Audit Act, 2010,
(d)
The Financial Transactions
Reporting Act, 2000,
(e)
The Financial Transactions Reporting Regulations, 2000,
(f)
The Financial Intelligence Unit Act, 2000,
(g)
The Financial Intelligence (Transactions Reporting) Regulations, 2001
and
(h)
The Proceeds of Crime
Act, 2000.
Mr. Speaker,
As foreshadowed during the last Budget debate,
my Government’s position on the regularization of web shop gaming has evolved
as a result of certain realities which have emerged, following the outcome of
the Referendum on this issue. These
realities can no longer be ignored. The
Governor of the Central Bank has drawn attention that web shops operators were
acting as bankers and hiring bank employees for this purpose. Concern has been expressed with regard to the
violations of the country’s international obligations, which could have severe
consequences for The Bahamas vital financial services industry. After wide consultation and in order to
preserve and protect the national interest, my Government has decided that the
right thing to do in the circumstances is to regulate web shop gaming. We have heard the views and dialogued with
the various groups who either support or are opposed to Gaming. We value, respect and understand their
position. Nevertheless we are caught in
a situation where the Government must govern and regulate.
Provisions
has been made in the Gaming Bill and in the elaborate regulations thereunder,
for a regularization process in relation to current web shop operators, as well
as for appropriate transitional provisions, in conformity with international
best practices and in full compliance with the prevailing anti-money laundering
and counter terrorist financing requirements.
Consultation led by the Attorney General has taken place with the
Financial Action Task Force to ensure that the provisions of the proposed
legislation and procedures will be in compliance with FATF guidelines so as to
ensure acceptance by banks of proceeds from legalized and regulated casinos and
web shop operators. In this regard,
consultation continues with clearing banks operating in The Bahamas.
The objective of this exercise
is not to foster the proliferation of gaming among Bahamians but to control and
regulate it. There will be a fixed
number of web shop operator licenses as well as web shop premises. Licenses will be granted pursuant to detailed
criteria to be set forth in an RFP, containing appropriate minimum criteria for
the licensing of web shops, on the basis of which the application and licensing
process will be managed.
The Gaming Bill and
Regulations will provide for applicable features of a successful, responsible
gaming strategy including public education, protection and treatment of
gambling addicts. It is envisaged that
through a public-private sector initiative a Foundation with a Board of
Directors, with an independent Chairperson, will be set up to administer the
programme to be funded by the gaming industry.
The public awareness and prevention component of the programme would be
focused on taking proactive measures to inform the public of the potential
dangers of gaming, the nature of gaming addiction and the symptoms of problem
gaming, with a view to preventing problems before they occur, rather than
simply responding to these problems once they have arisen.
In addition to fees, taxes
and penalties which will be applied to web shop gaming operators, provisions
will also be made for contributions to charitable and social causes. Consultation continues to take place with
casino and web shop operators and other relevant parties as the process moves
forward.
Mr. Speaker,
The new law will provide for the
issuance of a Gaming House Operator Licence to existing operators. In addition to the issuance of licences to
Gaming House Operators, the new Gaming Bill will provide for the issuance of
Gaming House Premises Licences and Gaming House Agent Licences.
Gaming
House Operator Licence
shall be issued only to a fully Bahamian-owned
company and may only be applied for in response to a formal invitation to apply
for such licence.
Gaming
House Premises Licence
provides for a
separate gaming house premises licenses to be issued in respect of the
dedicated premise. The Gaming Bill
stipulates the nature of the gaming activities which may be conducted on such
premises and again may only be applied for in response to the RFP.
Gaming
House Agent Licence
will cover the existing arrangements
whereby third party agents of the current web shop operators accept cash
betting on the numbers game on their business premises, pursuant to an
agreement entered into with the web shop operator, and against payment of a
commission and shall
authorise the conduct on licenced premises—
(i)
of cash betting transactions only;
(ii)
on the numbers game only; and
(iii)
with domestic players only.
The new Gaming Bill provides for supplier licenses which will be required by
every person who distributes repairs, maintains, alters, modifies or otherwise
directly supplies any gaming device, and may only be issued to a company.
Mr. Speaker,
Provision has also been made in the Gaming Bill for two
additional categories of licenses, namely key employee licenses and gaming
employee licenses. A key employee license
is required by every person who may exercise direct control over gaming
operations or activities authorized by the principal license, or such other
person whom the Board may identify.
These persons will include, managers, supervisors, pit bosses, etc. A gaming employee license is required by
every person who is employed by the holder of the principal license and who is
directly involved in activities performed under that license, but excludes key
employees. Such persons would be,
cashiers, dealers, security personnel, etc.
These provisions represent a change from existing practices, under which
such persons are subjected to probity investigations on an annual basis, but
are “approved” by the Board.
The new legislation provides for
the various forms of lottery. A new provision
has been included in the Gaming Bill to empower the Minister to authorise the
conduct of a National Lottery in The Bahamas, and to appoint a service provider
to operate the national lottery under a management contract. The Gaming Bill further provides for the
Minister to make regulations (inter alia) governing the management contract.
The Gaming Bill also confirms the ongoing illegality of all other lotteries
other than -
(a) any national lottery that may be implemented;
(b) charitable lotteries;
(c) private lotteries;
(d) lotteries
which are incidental to certain entertainment events; and
(e) the
numbers game, when offered by the holder of a gaming
house operator licence.
Mr. Speaker,
The
new legislation will also empower the Minister responsible for Gaming to make
Regulations permitting participation in the types of gaming contemplated in
casinos and gaming houses by any category or all categories of persons, which
may regulate the circumstances under which and the conditions subject to which
such participation shall be permitted.
Mr. Speaker,
I
wish to express appreciation to the team of officials who have worked
tirelessly on these new measures with their many complex issues, along with our
gaming consultants AG Consulting of South Africa and Grant Thornton Accounting
firm. These officials were drawn from
the Office of the Prime Minister, the Office of the Attorney General, the
Ministry of Finance, the Ministry of Tourism and the Gaming Board.
Mr. Speaker,
I am pleased to be able to introduce and
lay on the table of Parliament the following:
·
Gaming Bill, 2014,
·
Gaming Regulations, 2014,
·
Gaming House Operators Regulations, 2014,
·
Financial Transactions Reporting (Amendment) Bill,
2014
·
Financial Transactions (Gaming Exemptions)
Regulations, 2014 and
·
Proceeds of Crime (Amendment) Bill, 2014
Obediah H.
Wilchcombe
Minister of Tourism
&
Member of
Parliament, West End and Bimini Constituency
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