"You measure a democracy by the freedom it gives its dissidents, not the freedom it gives its assimilated conformists."
- Abbie Hoffman
This week, we witnessed the commencement of the debate on gambling legislation in Parliament which sought, among other things, to regularize the operation of web shops in The Bahamas. Much of the intense antagonism to the legislation resulted from the outcome of the January 28, 2013 gambling referendum during which the vote in opposition to the proposition of regulating and taxing the web shops prevailed.
Prior to the referendum, the prime minister proclaimed that he would abide by the referendum results. Subsequently, however, he changed his mind, and, notwithstanding the referendum results, introduced legislation that would regulate and tax web shops. Accordingly this week, we would like to Consider this...Are some of the religious pastors who fought and won the referendum poll correct in their accusation that the prime minister's positional reversal and subsequent actions have signaled the death of democracy in The Bahamas?
The state of play
For decades, Bahamians were not allowed to gamble in the country's casinos, although foreigners were not only permitted, but encouraged to do so. Casino gambling in The Bahamas has grown impressively, and tourist gaming has become ensconced in our tourism industry. However, since the enactment of the relevant legislation, Bahamians were prohibited from participating.
During this same period, and for many decades before, Bahamians have actively engaged in the domestic numbers business, paying small amounts of money to bet that the numbers that they chose would "fall" on any given day, resulting in profits far in excess of the cost of the purchase of such numbers. At one point, depending on the gaming house in which one played, a $2 bet could result in winnings of as much as $900, and in some cases slightly more if the number fell in the precise sequence of the daily drawings.
Such games of chance were never legally sanctioned, but for decades the vast majority of Bahamians turned a blind eye to such betting arrangements by local residents. The society as a whole acquiesced to such practices; law enforcement, and civil society, including the church, generally accepted that playing numbers was as much a part of the Bahamian culture as is Junkanoo.
In 2010, when the Ingraham administration decided to regulate the web shops, government representatives met with web shop owners and determined that the annual revenue from this sector was estimated to be in the range of $400 to $600 million. At the time, the Free National Movement (FNM) government realized that it could not allow the industry to continue to operate in an unregulated environment and drafted regulations for it. The FNM did not proceed with its plans to regulate this sector, in part because, at that time, it could not obtain the support of the church.
The 2013 referendum
Shortly after the Progressive Liberal Party (PLP) won the general elections on May 7, 2012, Prime Minister Christie aggressively initiated plans to regularize the web shops. Pursuant to that objective, Prime Minister Christie announced that his government would hold a referendum on January 28, 2013 to determine the will of the people on the matter. The two questions on the referendum ballot sought the people's views on regulating and taxing the web shops and the establishment of a national lottery. The referendum results follow:
o The total number of votes cast against regulating and taxing web shops was 51,146, 62 percent of the total;
o The total number of votes cast in favor of regularization was 31,657, 38 percent of the total.
Many people believe that, although a majority of Bahamians who voted in last year's referendum were against the web shops, the outcome is neither persuasive nor conclusive and that the referendum results do not represent the true national sentiment on this issue.
Particularly in light of the low voter turnout of less than 50 percent of eligible voters, it would be erroneous to conclude that a majority of Bahamians are opposed to regulating and taxing web shops or establishing a national lottery.
The regulation imperative
The government recently reported that web shops cumulatively generate gross annual revenue of $600 million. Given this enormously significant cash flow, it is imperative that they be regulated for two important reasons: consumer protection and national security imperatives.
In the absence of completely shutting down the web shops, perhaps an impossibly achievable objective, the government must have also considered the vastly deleterious effects that either shutting them down or allowing them to continue to operate in an unregulated environment would have on our economy. But doing nothing is a wholly untenable proposition.
If we examine the operations of web shops, we will observe that their owners operate two distinctively different businesses. First, they provide online gaming for their customers. From a consumer protection perspective, it is important for persons who participate in web shop activities to be confident that they are protected from undesirable business practices ranging from online machine manipulation to not being able to collect their winnings if they are successful players. Today, in the absence of regulation, the smooth, fair and equitable operation of web shops is wholly based on trust. Regulation will address those and other operational issues.
The second business in which web shops engage comes as close to banking as anything will, without the requirement or benefit of a banking license. There are possibly more automatic teller machines strewn across the length and breadth of this country that are operated by the web shops owners than those of all the commercial banks combined.
Furthermore, the owners of web shops engage in lending money to many Bahamians for similar purposes as our commercial banks. However, in the case of web shops, this is an unregulated activity.
Additionally, we cannot ignore the short and long-term devastating effects on this economy of the nearly 4,000 persons who are employed by the web shops and what their closure would mean to the nation's employment figures.
Finally, it was absolutely necessary to bring this industry into the formal economy, enabling it to be recognized as a legitimate and significant pillar of the Bahamian economy.
Having regard to all of the above, the government is cognizant that regulation of the industry is imperative in order to protect the country from once again being blacklisted by the international agencies of the large industrialized countries, because of the potential threat that an unregulated sector poses for money laundering and terrorist financing, all of which will be minimized through the regulation of the sector.
Accordingly, there cannot be any doubt whatsoever that regulation and taxation of this sector is in the best interests of the country.
The gaming legislation
The gaming legislation that was recently tabled in Parliament, among other things, contains three major provisions that have resulted in varying degrees of intense debate in the public square. Those elements of the bill provide:
That all web shops would be regulated and taxed;
That a national lottery could be established for at some future date to be determined by the government;
That Bahamians would be allowed to gamble in casinos at some future date to be determined by the government.
Conclusion
The government should be commended for its leadership in this matter. Christie has debunked his detractors' derogatory suggestions that he is indecisive and ineffective. He and his Cabinet have taken the bold decision to do the right thing for the economy and the country in the face of excessive opposition and criticism for taking a decision that is incongruent with the expressed will of the people who voiced their views during the last referendum.
Next week we will address those who criticize the government for taking this bold decision in the face of those results, including the official opposition and some church pastors, with a view to determining whether, in light of the prime minister's courageous leadership in this matter, we are witnessing the death of democracy in our country.
o Philip C. Galanis is the managing partner of HLB Galanis and Co., Chartered Accountants, Forensic and Litigation Support Services. He served 15 years in Parliament. Please send your comments to pgalanis@gmail.com.

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