Young Man’s View: Bahamas At A Dangerous Crossroad
Recently, Governor of the Central Bank Wendy Craigg urged the Government to quickly address the issue of unregulated web shop gaming and the associated vulnerabilities presented as a result and, even more, cautioned that this sector in its current state threatened to undermine proposed plans for a Bahamian Credit Bureau.
Bodies such as the Financial Action Task Force (FATF) and its Caribbean equivalent, she said, would take account of the fact that the Lotteries and Gaming Act gave the Bahamas legal authority, and a regulatory framework, to prevent illegal gaming.
“Other measures, such as the refusal of commercial banks to accept what they have reasonable grounds to believe are proceeds of illegal gaming, would also be taken into account by the assessors from anti-money laundering/counter terrorism financing standard-setting agencies. However, assessors would also look at measures taken by law enforcement to address offences against the Lotteries and Gaming Act,” Mrs Craigg said.
“To say that the Bahamas is in danger of being ‘blacklisted’ on the issue of web shop gaming, alone, does not take account of measures which the jurisdiction has in place to mitigate the potential money laundering risk posed by web shop activities. However, it remains for the policymakers to address this outstanding issue in a manner that reduces the jurisdiction’s vulnerability to the continuance of unregulated economic activities in the jurisdiction,” the Central Bank governor said.
Mrs Craigg seems to me to have asserted that it is the Bahamas’ failure to enforce the laws on its books already that could attract the attention of the G-20 nations and their ‘blacklisting’ agencies, as opposed to web shop gaming itself.
In her press statement, the Governor further acknowledged the increasing concerns about fixtures in the web shop gaming industry offering mortgages and pay day loans, in contrast to, and in competition with, the commercial banks. She noted the significance of such lending practices and said that such activities could lend to the destabilisation of both the formal, legal banking sector and wider Bahamian economy. What’s more, she also said the lending activities of web shops would weaken the efforts of the banking sector in its thrust to better assess the creditworthiness of Bahamian borrowers via the planned Credit Bureau.
Since last year’s referendum, the government has taken no action to shut down gambling houses and, quite honestly, there doesn’t appear to me to be an inclination on the parts of either the government or law enforcement to do so. I think the entire industry should be regulated and that Bahamians should be allowed to participate in games of chance, using their disposable income as they see fit. The local gaming industry is a multimillion dollar operation that must be officially recognised and legalised so that it falls within the parameters and guidelines of the Central Bank. I can tell of a number of stories where I’ve heard of monies being transferred between islands on a person’s web shop account, particularly if a web shop is nearest a settlement and a bank is further away.
In my interpretation the Governor’s comments were restrained in that she made it clear the status quo posed a significant problem for banking and compliance and they were at a crossroads – a crossroads the country dare not stay at for too much longer.
Bahamians should be interested in knowing at what point the Prime Minister knew of the feelings of the Governor. If he was aware, I believe he should not have presented the referendum in the way that it was laid out for the Bahamian people, particularly as we’re finding out that the government clearly regrets the opinion poll and it seemed to some wanted to ‘orchestrate’ a particular outcome even then. One by one, Cabinet ministers are lining up and espousing a view that the industry should be regularised.
Yes, it is clear that the government is not minded to shut down the web shops! Yes, they are thriving and have begun to compete in areas of finance and banking! And yes, the Governor of the Central Bank is obliged to notify the government of her concerns. So, when did she first notify the Prime Minister? Was it prior to January 28, 2013? If we had a Freedom of Information Act, we would likely have access to emails, letters and other memorandums that would be indicative of when and if the Governor expressed her concerns to the PM and what his responses might have been, especially if these exchanges happened prior to the expensive opinion poll. Frankly, any responsible government ought to demand input from the various stakeholders and the Governor of the Central Bank is the face of the financial sector. Her advice should be taken for the substantial value that it holds.
The government should move with haste to tax and regularise the sector. Quite honestly, officials should seek to meet with the Bahamas Christian Council and respectfully remind the leaders of that body of the government’s obligations to govern within the best interest of the state and that, while their views are respected and many times adhered to, this is an issue where the government must act and strongly pursue the concept of a separation between church and state. Moreover, the government must also commit itself to a series of town hall meetings to inform the public of its decision and to explain why they would take such a policy position in the wake of the botched referendum.
ISHMAEL LIGHTBOURNE AND VAT!
The circus concerning Ishmael Lightbourne has left a bitter taste in the mouths of many Bahamians. The fact that Mr Lightbourne, the government’s lead spokesman on the implementation of VAT, was found to be owing real property taxes for a decade leaves one to think some things about mere expediency as opposed to genuine conviction.
Mr Lightbourne has been paraded around town as the face of VAT, but he himself seemingly doesn’t believe in paying taxes, even a nominal sum, considering the 500 per annum that he pays for his palatial beachfront mansion. How could one tell the public about the importance of sacrificing for the good of the country and embracing a Value Added Tax while not entirely making the same sacrifice with the taxes that are currently in place? This is demonstrative of the saying ‘do what I say, not as I do!’
As it stands, the government has no choice but to withdraw, fire or transfer Mr Lightbourne and to replace him with someone credible enough to explain their position to the Bahamian people. And, while they are at it, how many Cabinet ministers are up-to-date with the real property taxes for the homes in which they reside?
Not everyone is a spokesperson for VAT in the Bahamas. The government must recall Mr Lightbourne and put him on a tax payment plan or whatever, as he has been disqualified, in the eyes of some people, I believe, as someone who is a fit and proper person to lead the VAT discussion.
Adrian Gibsonfinancial, gambling, gaming, law, tax, VAT, web shops