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News Article

June 16, 2014
Web shop boss blasts Rollins

Island Luck CEO Sebas Bastian is blasting back at Gaming Board Chairman Dr. Andre Rollins over his suggestion that web shops are "fleecing" Bahamians with the slot machine game known as spinning.
"This unsubstantiated allegation is very insulting and surprising coming from a representative of the Gaming Board that at this stage of the process should understand just how web shops work," Bastian said.
He said that over the last 40 years, the web shop industry was built on "integrity, experience, loyalty and the trust of patrons".
"Contrary to the allegations of Mr. Rollins, the confidence demonstrated by the Bahamian gaming consumers in the web shop industry over the past 40 years is grounded in the fair conduct of games, timely disbursement of winnings and the social investment by the industry in the civic, sporting, educational and charitable needs of the Bahamian society," Bastian said.
While contributing to the budget debate in the House of Assembly last week, Rollins said, "Without laws to govern the conduct of web shops, unregulated slot play is likely exposing Bahamian players to rates of winning well below that which is permissible under the regulations governing slot play in our regulated hotel based casinos."
But Bastian said he is amazed by the amount of speculation about the web shop industry and "the birth of overnight experts".
"There has been a long battle for the right solutions," he said.
"Many companies, consultants, advisors, interest and self-interest have aligned to offer opinions and suggestions in regulating an industry that we know best."
Bastian said one of the main issues the industry faces from "speculators" is that operators have been grossly under estimated.
"We operate software far more advanced than what we see in other Bahamian institutions and many of the operators operate with the level of compliance, technology and sophistication only found in mega offshore gaming establishments," he said.
"Many web shops are already fully compliant with the gaming regulatory standards of the major justifications in which they operate.
"To see where this 'numbers game' evolved over the last 50 years to what we see today makes me so proud to witness what Bahamians are capable of achieving.
"The pioneers of the industry deserve to be praised for transforming this industry, once considered racket, into an industry worthy of a national debate."
During his contribution to the budget debate last week, Rollins said web shops should be taxed at a higher rate than hotel-based casinos.
But Bastian said the logic of this assertion is unclear.
"Why should Bahamian owned web shops, without the benefit of numerous tax concessions and the annual cash promotional contribution from the Public Treasury received by casinos, be taxed less favorably than a foreign operated casino engaged in the same economic activity which is online gaming?" he asked.
Rollins said casinos provide the government with foreign currency that represents new money brought into the economy by visiting tourists.
Secondly, he said, it cannot be denied that casinos generate far more tax revenue streams than web shops do, inclusive of room occupancy rates, airline ticket taxes and departure taxes for stopover visitors.
Rollins added that the level of economic benefit in terms of investment, job creation and economic activity represented by these hotels far surpass that of the web shops.
"A low tax rate and yield from web shops will only strengthen the public's view that a national lottery will be far more beneficial to the state's coffers and national development than the $12 million worth of revenue forecast in this budget," he said.
In the regulations the government prepared to accompany the Gaming Bill 2013, interactive gaming in casinos would be subject to a tax of "five per centum of adjusted gross revenue".
Win-win
In his statement to The Nassau Guardian, Bastian noted that The Bahamas has gaming laws on its books that technology has made obsolete.
"We must regularly review and change our laws to keep up with what is happening in the modern gaming industry so that The Bahamas can remain competitive, while adding Bahamian participation and empowerment."
Bastian added, "For the record, the web shop industry never operated illegally.
"...Its activities are merely unregulated, as there is no regulation of online gaming in The Bahamas. The blame can only be attributed to lawmakers who allowed 40 years to pass with no amendments to ensure that the laws were in line with the world's technological advancements."
In his recent budget communication in the House of Assembly, Prime Minister Perry Christie advised that the taxation of web shops will be made retroactive to July 1.
MPs are scheduled to debate the long-delayed Gaming Bill after the budget debate, which is ongoing.
Bastian said, "A regulated web shop industry will provide even greater protection to the Bahamian gaming consumer, give security to a Bahamian web shop industry, ensure compliance with the anti-money-laundering and anti-terrorist financing regulatory standards of the FATF and increase tax revenue to the Public Treasury."
He called it "a win-win situation for everyone".

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News Article

June 24, 2014
Web shops penalty for illegal earnings

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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News Article

June 11, 2014
Rollins questions projected web shop revenue

The government's projected revenue forecast of $12 million from taxing web shops only plays into the narrative that it is paying back web shop bosses, Fort Charlotte MP Dr. Andre Rollins said yesterday.
During his contribution to the budget debate, Rollins, chairman of the Gaming Board, asked if the projected $12 million is "the best we can do".
"A low tax rate and yield from web shops will only strengthen the public's view that a national lottery will be far more beneficial to the state's coffers and national development than the $12 million worth of revenue forecast in this budget," Rollins said.
"This will play into the opposition's existing narrative that we are motivated by some form of political payback as opposed to reducing the country's annual budget deficit, or funding worthy causes such as public education, healthcare, sports, cultural and infrastructural development.
"Failure of web shop tax revenue to meet the public's heightened expectations will inevitably increase public demand for a national lottery, and such an outcome will most certainly be seized upon by the opposition in the run-up to the next general election as an initiative they intend to deliver."
In his recent budget communication, Prime Minister Perry Christie said web shops will be taxed and regulated as of July 1, 2014.
Christie said the Gaming Bill will be debated following the budget debate.
Minister of Tourism Obie Wilchcombe recently suggested to The Guardian that the government will explore introducing a national lottery for the development of sports and education in The Bahamas sometime after it has regulated the web shop industry.
Minister of State for Finance Michael Halkitis said yesterday that the $12 million projected tax revenue from web shops was a conservative estimate as the government has not yet decided what rate to tax the industry.
He was responding to Montagu MP Richard Lightbourn.
Tax revenue
Rollins said since 2010 it has been stated, under successive administrations, that the yield from the taxation of web shops would range anywhere from $20 million to $40 million.
"If securing a new source of tax revenue is the motivation behind regulating and taxing web shops as indicated by the prime minister, the fundamental question we must all ask for the sake of our country and our government's depleted coffers is this: Is $12 million the best we can do?"
Rollins said while he believes the government should reap much more from the regulation and taxation of the web shop industry, he applauded the government's resolve to at long last apply law and order to it.
He added that web shops should be taxed at a higher rate than hotel-based casinos.
Minister of Financial Services Ryan Pinder has said that it is estimated the government could take in between $20 million and $100 million annually in taxes from a regulated "electronic gaming industry".
The Gaming Bill was tabled in the House of Assembly last October, but the current bill does not provide for the taxation of web shops.
Christie said the government will amend the bill to improve casino gaming and allow for the regularization and licensing of the web shop industry.
Rollins previously called on the government to regulate and tax web shops.

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News Article

March 14, 2014
PM: MPs can vote their conscience on web shops

Prime Minister Perry Christie said last night he is not ashamed that his views on web shop gaming have evolved and said "the whip will not be on" when a bill to regulate web shop gaming is introduced in Parliament.
Christie, who was wrapping up debate on the mid-year budget in the House of Assembly, said every MP will be given the opportunity to vote on the "divisive" issue based on their conscience.
"Whatever might be the position which parliamentarians might personally take in this matter -- and the whip will not be on -- the reality is that businesses which operate in this country should do so in accordance with the law, and pay appropriate fees and taxes," Christie said.
In the last several months, several MPs have been very vocal about web shop gaming.
Christie said he supports regulating web shops.
"When all is said and done, however, I am not ashamed to admit that my own views on this matter have evolved in light of a new appreciation of the dangers we face from continuing to have an unregulated web shop gaming industry that is... not susceptible to sustained law enforcement under the law as it stands today and which, moreover still, is not paying its fair share of taxes," he said.
"I believe, therefore, that the time has come to legalize web shop gaming but only on the basis of new legislation that would provide for licensing, operation, regulation and taxation of this industry in accordance with best practices and international norms."
Christie said the taxes that would be derived from web shops are estimated to be "considerable".
He said a "very significant" portion could be earmarked for causes such as health, welfare, education, sports and community recreation.
Christie said provisions would also be made for a counseling and support mechanisms for those who may become addicted to gambling.
He acknowledged that many of the religious leaders do not agree with the government's position on web shops.
However, he said he welcomes their prayers as the government tackles these serious issues.
Christie also acknowledged that the majority of the people who participated in the gambling poll on January 28, 2013 voted against the regulation of web shops.
"At the same time I am keenly conscious of the fact that the citizens of this country who support the regulation and taxing of web shops are considerable," he said.
"Indeed more and more persons have become positive advocates. Authorities in law enforcement and in banking, including the central bank, both recognize the challenges of enforcement posed by unregulated web shop gaming, and the law enforcement and security dangers of having vast amounts of money earned by web shops which local banks refuse to accept."
He said that having vast amounts of money circulating through non-banking institutions create money laundering implications.
Christie said this could also pose serious problems and result in blacklisting of The Bahamas by the Financial Action Task Force and by other multinational bodies, "which would have disastrous consequences for our vital financial services sector and the reputational standing of The Bahamas in the world".
Minister of Tourism Obie Wilchcombe announced last week that he intends to present a proposal for the regularization of web shops to Cabinet by the end of the month and is pushing for this to be official by July 1.
Bahamas Christian Council President Rev. Dr. Ranford Patterson said last week that if the government goes against the results of the gambling poll, it would be setting a dangerous precedent.
He added that he would not vote in another referendum.

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News Article

June 10, 2014
Banks warn over web shop 'regularization' plan

Local banking executives have thrown into question government's plans to "regularize" the web shops, suggesting that even once this occurs it may be difficult or impossible for banks to do business with them without the country facing a damaging potential 'blacklisting'.
Without banks being able to handle web shop proceeds, this would have a knock-on negative impact on government's intention to reap millions in taxes from the web shop sector, some have warned.
In an exclusive interview with Guardian Business, Ian Jennings, president of Commonwealth Bank, said with reference to the government's plans with respect to illegal web shops this year: "It's not as simply as just passing an act to regularize them; they also have to be seen within an international framework of FATF (the Financial Action Taskforce) 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 the 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."
Jennings noted that the relationship of banks operating in The Bahamas with their "correspondent" financial institutions in the U.S. and elsewhere, which provide services on their behalf, is crucial and these foreign banks are under great pressure from their regulators to ensure that the Caribbean banks they do business with are operating to international standards.
In his Budget Communication late last month, Prime Minister Perry Christie said it is intended that with the regularization and licensing of web shops under an impending Gaming Bill, he expects such establishments to be operated in a way that upholds "laws and international obligations in accordance with best practices".
However, Jennings suggested that he has doubts that web shops would be able to meet these obligations and told Guardian Business that doing business with web shops that may be under a legislatory framework that legalizes them in the Bahamian context, but which may not be meeting international standards set out by agencies such as the FATF, could cause local banks to be called into question in this regard by their correspondent banks and international agencies.
"Internationally now the major economies continue to crack down on anything that's seen as tax avoidance, tax evasion or just offshore financial sector. We've seen developments with Switzerland; the U.S. has indicated they'll put a greater scrutiny on what's happening in the Caribbean and, certainly, for Bahamian banks who do not have any correspondent or any parents outside the country, the relationships with correspondent banks in the U.S. is extremely important because all of our transactions and trade is with the U.S. and they are coming under increasing scrutiny from their regulators to make sure that their Caribbean correspondents are performing to the highest levels.
"That's a relationship that no Bahamian bank can afford to give up so we have to make sure that we maintain our reputational position. These are all things that we are waiting to see how they develop coming out of the budget presentation and the legislation that goes behind it," said Jennings, in an interview with Guardian Business.
He called the matter one of "concern" for international agencies with respect to the reputation of the Bahamian financial system.
Jennings' comments were strongly supported by another senior banking executive locally, who spoke on condition of anonymity.
Money 'will not be accepted'
"(Jennings) is absolutely right. The government seems unaware that many banking institutions, as a matter of policy, will not deal with the gaming industry whether it is legitimate or not. At the extreme, simply because the government 'legalizes' the gaming industry in The Bahamas does not mean that their money will be accepted in the system.
"This is not simply a 'Bahamian issue' - it involves international banks who also provide correspondent banking facilities to Bahamian based institutions, and unless there is evidence of strong know your customer (KYC) procedures and anti-money laundering (AML) standards in place (and the gaming industry would need to demonstrate that), the international and local banks may be forced to distance themselves from the gaming industry."
Without local banks being able to offer banking services to the web shops, this in turn could hurt the government proceeds of taxation from the sector.
"Government's proceeds of taxation will also be impacted as the proceeds may not be accepted unless KYC and AML procedures are in place, and the industry is rid of persons who have run afoul of the law. The best solution for The Bahamas is for it to have a national lottery. Otherwise we will have a blossoming 'shadow banking system' that will be making loans, transmitting money, taking deposits etc. completely unchecked and unregulated. That can't be good for the economy," added the executive.
In his recent budget communication, Christie suggested that the government "conservatively" anticipates collecting around $12 million from the sector annually once the Gaming Bill is passed following the budget debate that is currently underway.
'Unaware'
Revenue collection potential is clearly one of the major benefits of regularizing the web shop sector, which has flourished in recent years. The anonymous banking source said it may be the case that the government is "focused simply on the revenue aspect of the legalization and seem unaware of the wider implications of their actions".
However, as Guardian Business exclusively reported in October last year, how the unregulated sector could factor into external reviews this country and its financial sector faces from entities such as the Caribbean Financial Action Taskforce, has also been recognized by officials as an impetus to regulate.
Before elected officials had suggested that legislation might be passed to make web shop gaming legal, the country's top anti-money laundering official, Stephen Thompson, coordinator for the National Anti-Money Laundering Taskforce, called the regulation of the web shops "the only responsible thing to do" in light of external pressures.
Thompson said in an interview that while he did not expect a "blacklisting" as a result of a lack of regulation, he did admit that "dire consequences" for the financial sector and economy could result from a perception among international agencies monitoring issues of money-laundering and terrorist financing that The Bahamas is being "lax" in its handling of web shops.

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News Article

September 06, 2014
Web shops 'getting ready' for regulated market, despite concerns

While some web shop owners are "not happy" with some aspects of the 2014 Gaming Bill and the accompanying regulations, attorney Wayne Munroe said they are already engaged in the process of readying their businesses for regulation.
Among the sections of the bill that web shop bosses do not support are the ones that deal with the discriminatory elements and the disproportionate tax rates between web shops and casinos.
Munroe, who represents a group of web shop owners, said his clients are also questioning the section in the bill that requires them to pay back taxes for six years.
According to Section 85 of the Gaming Bill, web shops will be required to pay business license fees, in addition to gaming taxes for that period in lieu of taxes which would have been payable had the businesses been licensed under the act.
"The Business License Act permits for the recovery of underpayment of business license back three years on an audit," Munroe noted.
"It doesn't permit back pay of six years...They doubled the period of time that one can go back. We are not pleased with that. In that [vein], our representation was that it should be limited to the statutory period, which is three years. The government was not persuaded by that."
Munroe said that was one of many points that his clients petitioned for, which the government ignored.
As it relates to the discriminatory elements, Munroe said web shop owners lobbied for the government to end discrimination.
"We had, during the period of consultation, lobbied particularly hard and made representations with supporting material for there not to be a distinction," he said. "Clearly the government [was] not persuaded by our representation."
As stated previously, the bill maintains the discriminatory elements that prohibit Bahamians from gambling in casinos and foreigners from gambling in web shops.
However, the bill also contains a provision that would allow the minister with responsibility for gaming to override the discriminatory elements.
Tourism Minister Obie Wilchcombe said that decision was made to ensure the sustainability of both the casino and web shop industries.
But Munroe said the government might be overly cautious.
"What I read into the minister having the ability later to remove it, is that they may still be preoccupied with economic concerns and wanting to see how things play out before they take that position."
Munroe said he hopes the government would soon decide to open both industries to everyone.
In reference to taxes, Munroe said he repeatedly levied for an equitable rate.
However, the regulations reveal that web shops will be taxed at a rate of 11 percent while casinos are taxed at a rate of around five percent.
"While my clients don't like that, while they are not pleased...they have to deal with it," Munroe said.
"...They are not happy. But they are trusting from a long-term outlook, it can be beneficial. We have been told that, if the tax structure is detrimental to the industry, that government can revisit it."
Asked if his clients would attempt to challenge the government on any aspects of the bill, Munroe said no.
"My clients aren't adopting that kind of attitude," he said.
"...Right now, my clients are concerned with taking the steps to align their businesses to be able to comply with a regulated environment."
In doing so, he said his clients are "drawing up the necessary job descriptions, starting to work out the budgeting...all manner of things that have to be addressed in a regulated environment."
Only those web shops that receive an invitation from the government can apply to be regulated, according to the bill.

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News Article

July 02, 2014
Former AG doubts govt will restrict web shop play

Former Attorney General Carl Bethel said yesterday he doubts the government will restrict web shop operators from offering sports betting and online slot machine games, known as "spinning".
The new law would permit "domestic players" to participate in "numbers games" with licensed web shops.
A numbers game is defined as a game made available by the holder of a gaming house operator license "in terms of which any single number or combination of numbers ranging from 000 to 999 may be wagered upon by a player at odds, which are fixed at the time of conclusion of the wager".
"I believe it will be changed, and if it isn't changed, they (web shop owners) will change it," said Bethel, referring to the Gaming Bill.
"You have a culture of doing what they wish to do, and so far it seems they have been prevailing, even against the will of the voters.
"If the majority of Bahamians wanted it legalized or regularized, they would have voted for it.
"But the Bahamian people either voted against it or voted with their feet. Yet, where are we today?"
Web shops, including but not limited to Asue Draw, Island Luck, Chances and Paradise Games, offer sports betting for a variety of matches and events.
Spinning is common in many web shops throughout the country.
Bethel said he believes the government will bend to the will of "the barons and lords of the web shops", who he said would soon make their objections known.
"I hear them saying it is only going to be numbers, but I don't think that is going to happen...not for the barons and lords of the web shops, no sir," he said.
"I find it difficult to believe that the government is able to say no to them for whatever reason.
"...We'll see who the government is, on that issue of gambling.
"But I do not hold out any hope that the barons and lords of web shops are going to be limited to play in numbers."
The majority of voters who participated in the gambling referendum last January voted against the regulation and taxation of web shops and the establishment of a national lottery.
Prime Minister Perry Christie has repeatedly defended his decision to go against the referendum results.
Christie said his decision came after the governor of The Central Bank brought to his attention the damning situation the country faced, "where there was a new banking order and where, in fact, loan managers [were] being hired to conduct personal mortgages".
The amended Gaming Bill will pave the way for web shops to be regularized retroactive to July 1.

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News Article

June 27, 2014
Halkitis explains low web shop tax projection

Even though data collected by the previous administration indicated that the government could collect as much as $40 million in taxes from web shops, an audit was never done to verify that projection, Minister of State for Finance Michael Halkitis said yesterday.
In 2012, Prime Minister Perry Christie indicated that the Ingraham administration had done research on the revenue that could be derived from web shops.
Christie later told Parliament that it was more likely that the government could get $15 million to $20 million in annual taxes from web shops if the sector is properly regulated.
The government now estimates that it will collect about $12 million from web shop taxes.
Halkitis said yesterday the projection is "conservative" to avoid recording a deficit. However, he added preliminary information suggests a lower revenue yield than earlier estimates.
"Around 2010 when the government was exploring legalization, it asked the web shops what their turnover was," Halkitis said. "[Web shop operators] said about $400 million per year.
"The government never did any audit or verification. So the discussion was that if you tax them at a rate of ten percent then the government would get $40 million in taxes.
"We have put in place a requirement that the shops verify their turnover by way of an audit to get an accurate picture of their turnover.
"We put a low estimate in the budget to be conservative just in case the audit shows a much lower turnover."
Several members of Parliament recently questioned the government on the projected revenue yield from web shops.
East Grand Bahama Member of Parliament K. Peter Turnquest noted that the estimates fall far below what was initially expected.
"How is it calculated and will there be a license fee in addition to this tax?" he asked in the House of Assembly during debate on the 2014/2015 budget.
Gaming Board Chairman Dr. Andre Rollins also questioned the projected revenue.
"A low tax rate and yield from web shops will only strengthen the public's view that a national lottery will be far more beneficial to the state's coffers and national development than the $12 million worth of revenue forecast in this budget," Rollins said.
"...The failure of web shop tax revenue to meet the public's heightened expectations will inevitably increase public demand for a national lottery, and such an outcome will most certainly be seized upon by the opposition in the run-up to the next general election as an initiative they intend to deliver," he added.
The Gaming Bill is expected to be tabled on Wednesday. However, Christie yesterday hinted at a possible delay in government tabling the amended bill.
The government has not indicated the rate that web shops will be taxed.

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News Article

February 13, 2014
Govt will make 'right decision' on web shops

Prime Minister Perry Christie said yesterday the government must deal with the web shop industry "one way or the other" but added that his administration has not made any decision to regulate it. Christie and Minister of Tourism Obie Wilchcombe met recently with religious leaders about the state of the economy. In those meetings, the economic impact of the unregulated web shop sector was also discussed. Christie said the pastors he spoke with understand the country's economic woes and the need for additional sources of revenue. "I did say to the pastors that on reflection, I ought not to have placed them in the position that I placed them in with the referendum because the church will always have to be the church," he said."As to what is actually happening, what we are doing is we are looking at every opportunity to raise revenue in the country." Christie said the Central Bank of The Bahamas and the commercial banking sector have concerns about the underground banking services that web shops provide. He said the government is also concerned about the amount of money web shops send to overseas banks."That is a major contradiction to the good order of our system," Christie said. "One way or the other we have to deal with it."When asked when the government will tackle the issue head on, Christie said that depends on the advice he will receive from his Council of Economic Advisors, which he will soon establish. The government plans to implement value-added tax (VAT) on July 1 at a rate of 15 percent in most cases. Some observers have suggested that the government tax web shops and introduce a lower VAT rate. When asked about the suggestion, Christie said he would need "compelling reasons" to do this because the majority of people who voted in last year's gambling referendum voted against web shop regulation."At the end of the day, we are going to make the right decisions. Whatever those decisions are they may affect web shops' operations," he said. On Sunday, Wilchcombe said the web shop sector must be taxed in order to help bolster the economy. He also said he believes that while the government is preparing to roll out VAT this year, it cannot continue to ignore the web shop industry."I think we're going to have to regulate them," said Wilchcombe, who has ministerial responsibility for gaming. "They're going to have to pay tax in this country."Christian Council President Rev. Dr. Ranford Patterson said the group has not changed its position on web shop gaming."We told the prime minister in the presence of Obie Wilchcombe that the church's position has not changed," he said on Tuesday."We can never say to them, go ahead and regulate the industry; we can't tell them that."

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News Article

June 25, 2014
Flowers praises govt on web shop move

FML Group of Companies CEO Craig Flowers said yesterday his long-time dream for the regulation of the web shop industry is drawing closer and commended the government for moving ahead with the plan.
Flowers was contacted for comment after Tourism Minister Obie Wilchcombe, who has responsibility for gaming, revealed on Monday that the amended Gaming Bill would be tabled in the House of Assembly next Wednesday.
While Flowers did not want to comment specifically on the matter, as he did not want to pre-empt the bill or the web shop regulations, he said he welcomes the news.
"It is something I have fought for from the day I walked in the door and today I see it growing nearer to reality," he said.
"A good part of my dreams in the industry is coming to fruition."
Flowers said while he has personal feelings on the time it has taken to get to this point, he commends the government for its fortitude.
"I have a great deal of appreciation for Minister Obie Wilchcombe and [Attorney General] Allyson Maynard-Gibson who are now doing the final cleaning up of the matter," he said.
"I think those two need to be recognized and commended because [web shops] have been here among us for decades and we've turned a blind eye to it (the sector)."
Wilchcombe recently began his public push for the industry to be regularized.
During his mid-year budget statement in the House of Assembly in March, he said,"We're not going to kick this down the road any [farther]".
"We had the referendum and we accepted the referendum and the opinion being given by the Bahamian people," Wilchcombe said.
"But truth be told, Mr. Speaker, that we have an issue that we have to deal with. We have an issue that has been out there a bit too long. The time for that is now over."
Wilchcombe said on Monday the government is making the final decisions on the web shop regulations.
The government is considering the rate of taxation for web shops, the number of web shop licenses that will be approved and whether there will be a period of closure for web shops.
Wilchcombe said 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."
It is projected that the government will take in about $12 million in web shop taxes.

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