Attorney General Allyson Maynard-Gibson said yesterday the government intends to impose a penalty on web shops for revenue generated prior to regularization.
However, she did not specify what the penalty will be.
Also addressing the issue yesterday, Tourism Minister Obie Wilchcombe, who has ministerial responsibility for gaming, said, "There will be a penalty for illegal operation, when it was illegal. So we have to penalize them for about six years. And all of that is a part of what we're doing."
Wilchcombe said the government is also determining a period of closure for web shops.
He recommended that web shops be made to close before the regularization period begins. However, he said he has faced some opposition to that.
"The web shop consultants are suggesting that it's not necessary," he said. "We're weighing it right now."
Meanwhile, Maynard-Gibson, in a separate interview, expressed confidence that web shops will be able to conduct business with banking institutions in The Bahamas once the government regulates the industry.
The Gaming Bill has not yet been debated in the House of Assembly, but web shop regularization will be retroactive to July 1.
At least two banks in recent weeks voiced strong concern about web shops meeting international standards even in a post-regulated environment.
"I didn't read what they said in that way," said Maynard-Gibson outside the Senate.
"I'll say that I am aware, as we all are aware, that in Canada gaming is conducted; gaming that is regularized is conducted.
"People who work in those institutions that are regularized in Canada receive money from those gaming institutions.
"They put their salaries etc. into banks in Canada, so I have every confidence that once gaming, including web shops, is fully regularized in The Bahamas that the Bahamians who work in those institutions, just like in Canada, will put their money in banks in The Bahamas."
When asked how web shops' proceeds prior to regularization would be handled in the event banks decide to do business with them, Maynard-Gibson said, "That is something, as the prime minister has indicated, we are benchmarking other jurisdictions.
"This is not the first time what is called an underground economy has been regularized and so we are studying what has happened in other jurisdictions.
"I think it is fair to say that there will be some type of penalty that must be paid because what we are seeing so far is that's what happens so far when these institutions are regularized."
In a position paper, RBC (Bahamas) said conducting business with web shops, even once regulated, would cause local banks to run afoul of their parent banks' global policies and U.S. federal law.
Two weeks ago, Commonwealth Bank President Ian Jennings expressed doubt that web shops would be able to meet international standards set out by agencies such as the Financial Action Task Force (FATF).
"It's not as simple as just passing an act to regularize them," Jennings said.
"They (web shops) also have to be seen within an international framework of FATF and various other money laundering issues.
"It goes back to a reputational issue for the jurisdictions, and I think a lot of people don't appreciate that and what may be issues that fall out of that.
"Just by regularizing the web shops is not going to get rid of the problem as far as the banking sector is concerned."
Maynard-Gibson said she believes Jennings was alluding to the importance of the government ensuring that its legislative framework is able to withstand scrutiny from international agencies.
During his contribution to the budget debate in the House of Assembly last week, Prime Minister Perry Christie said he expects web shops, under the Gaming Bill and accompanying regulations, to operate in conformity with "international best practices"
"Consultation led by the attorney general is taking place and will take 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," he said.
"In this regard, consultation will continue with clearing banks operating in The Bahamas."
As it relates to the Gaming Bill, Maynard-Gibson said her team has been working assiduously to finalize the document so that Cabinet can review it.
Asked when the draft legislation would be sent to Cabinet, Maynard-Gibson said, "I really don't want to tie the hands of my team that is working really assiduously.
"And of course, we also, as the prime minister indicated, want to consult with the relevant authorities that are concerned with governing anti-money laundering and counter-financing of terrorism matters.
"I think that everybody would like to see the exercise be carried out as thoroughly as possible while pursuing expedition, and that is what we are doing."

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