AG to gaming operators: Pay your taxes before taking legal action

AG to gaming operators: Pay your taxes before taking legal action
Attorney General, Carl Bethel.

NASSAU, BAHAMAS – Attorney General Carl Bethel delivered a clear message to gaming house operators while wrapping up his contribution to the 2019/2020 Budget Debate in the Upper Chamber on Monday: Pay your taxes.

“This is an excellent budget, it reflects excellent financial outturns, even with significant losses in revenue from the gaming houses because of the endless lawsuits and threats of lawsuits, but we have a framework now [in place] for anyone who wants to make a cottage industry from lawsuits by challenging the laws that we would have passed to reflect the agreement that we have with major gaming houses, which we will pass in July,” Bethel said.

“Anyone who wants to go and start a lawsuit, pay your tax, that is what the law says, pay your tax.”

Before reaching an agreement with gaming house operators following a new tax regime introduced last year, operators filed a lawsuit against government, calling the new tax regime discriminatory. But yesterday, Bethel told senators that new gaming legislation to further regulate the industry will be passed in parliament soon, which will prevent any legal action before payment is made.

“When we have a settled law, you can sue all you want, just pay your tax, and if the court says we owe you something, we will settle that up after,” Bethel said.

“I am not threatening, but the law requires, where there is a settled tax law, that if anybody wishes to challenge it, they must pay their tax  that is pending; that is in the law of the Bahamas, so it is not a threat for me to say what the law is.

“If the court supports you, the government will do whatever the court says, but the law of the Bahamas is clear on this matter.

“If there is a settled law passed and you have a dispute with it, you are entitled to sue, but you must pay [your tax] and comply with the law until a court says otherwise,” said Bethel, who noted that there are some lawyers who want to establish a ‘cottage industry’ from suing the government.

Effective January 1, 2019, all licensed gaming operators were expected to pay 15 per cent on $0 to $24 million dollars of revenue and operators earning anything greater than $24 million will pay 17.5 per cent.

Also, effective April 1, 2019, a new tax was introduced on all winnings derived from lottery bets.

Five per cent will be paid on winnings $0 to $1,000 and 7.5 per cent on anything greater than $1,000.

Last month, Gershon Major, President of The Bahamas Gaming Operators Association (BGOA)explained that as for a patron tax on lotto winnings – initially a tax on patron deposits – Gaming operators could not lawfully begin collecting these taxes on April 1, 2019 as the Government intended.

Major said to implement such a tax, operators’ systems must be modified, internationally tested, certified and approved by the Regulator—The Gaming Board for The Bahamas—as fit for purpose. He said not until this process is completed can the collection of patron taxes on lotto winnings commence.

Dionisio D’Aguilar, the minister of tourism who also has responsibility for gaming, told the media before heading to last week’s Cabinet meeting that the government is finally ready to debate and pass legislation that would set a tax scale for the gaming industry, which may take effect as early as July 1, 2019.