A New Authority in Gaming: The Antiguan Initiative

The purpose of this bill is to provide for the establishment of a Betting and Gaming Authority to license, regulate, and control all aspects of betting and gaming i.e. the actual games, procedures, mechanisms, premises, personnel, and revenue associated therewith and derived therefrom.

The present betting and gaming legislation was enacted on 4^th July 1963. The use of computers and the development of Internet gaming was not contemplated at that time. Since then, there has been significant advancements made in the nature of gaming and the equipment used therefor.

It is recognized that gaming consists, not only of casino oriented games, but also, lotteries, bingo, horse racing and other sporting events. In traditional gaming as well as in internet gaming, the rules for casino games follow the models developed in Las Vegas. The rules used for bingo, horse racing, and lotteries also follow an internationally recognizable and acceptable format. These factors play a significant part in a gaming industry which worldwide grosses billions of dollars per annum in United States of America currency. To harness, develop, and reap the rewards of this constantly evolving industry, it must be seen by Antigua and Barbuda as a self sustaining entity and not merely as an adjunct to the tourism industry where local gaming is concerned, or as a hybrid of the offshore industry where internet gaming is concerned.

The main body of the new legislation will eventually be contained in the regulations which will focus on specific aspects of control of the games, procedures, personnel, and revenue. These regulations will be quite comprehensive and will impact on other legislation such as the Virtual Casino Wagering and the Sport Book Wagering Regulations made pursuant to the Free Trade and Processing Zone Act, the International Business Corporation (General Control of International Book Making) Regulations made pursuant to the International Business Corporations Act, the Entertainment Duty Act, and the Small Charges Act.

A review of these Acts in conjunction with comparative legislation from other jurisdictions will ensure both local and international compatibility of our proposed gaming regulations.

The primary initiative is the establishment of the Betting and Gaming Authority. The existing regulations relating to gaming as specified in the above mentioned Acts will be preserved until the overhaul of the existing legislation is complete. This bill serves to bridge the intervening gap.

Section 2 of the Principal Act, i.e. the interpretation section, is repealed and replaced. The new section provides for the definition of the "Authority" and for new words, such as bet, betting, bingo, board, game, gaming house, gaming licence, horse, horse racing, licence, licensee, local gaming, money, minister, offshore gaming, pari-mutuel betting, sweepstakes, player, wager and wagering.

The definition of these words will give effect to their meaning not only in the present amendments of the Act, but in the regulations to follow. The expanded scope to the Act will therefore be evident from this new section. A proper and functional definition of what a bet is and what activities fall under the oversight of the government, were absent from the Principal Act. The inclusion of horse racing, bingo, and internet gaming, significantly widens the scope of the Act to include all forms of gaming.

The word "Commissioner" which was previously defined in Section 2 of the Principal Act is replaced by the word "Authority". This amendment enables the Authority to supersede the Commissioner of Inland Revenue as the agency charged with the responsibility of collection and enforcement of collection of revenue due to the government from local gaming.

The definition of the word "tax" which was previously defined in Section 5(1) of the Principal Act as a "gaming tax" has been expanded to include license fees and all other revenues due to the Authority, with regard to the collection of revenue. This is required since the gaming tax of 15 percent is placed on income generated by the licensee of gaming premises, and the same applies for income from gaming under the Entertainment Duty Act. However, the annual impositions for the premises itself is called a license fee and for avoidance of doubt all revenues whether called license fees, tax, or gaming tax, are to be collected by the Authority and the collection thereof enforced by the Authority.

Section 4 of the Principal Act is repealed and replaced to create the Betting and Gaming Authority. The former Section 4 empowered the Minister to grant gaming licenses and fix annual fees. The new Section 4 vests responsibility for all gaming activities in the Authority.

Section 4(1) of the Principal Act now establishes the Betting and Gaming Authority.

Section 4(2) lists the objectives and scope of the Authority as follows:

(a) to control, regulate, license, monitor, and have general responsibility and oversight for all betting, gaming and wagering activities in Antigua and Barbuda whether conducted as local gaming or offshore gaming;

(b) to ensure that persons engaged in the gaming industry are fit and proper persons to do business in the industry;

(c) to eliminate the criminal and socially unacceptable activity that may be associated with gaming and to prohibit money laundering;

(d) to ensure that gaming is conducted fairly;

(e) to approve applications for gaming licenses and to license gaming premises;

(f) to monitor the holders of gaming licenses and the operations of gaming premises;

(g) to initiate amendments to the gaming legislation to meet current demands and to remain proficient with present advances in the evolution and technology of the international gaming industry;

(h) to enforce the provisions of the gaming legislation;

(i) to ensure that the proper and correct revenue derived from gaming activities is realized by the government;

(j) to maintain contact with international gaming regulators and gaming trade associations for both local and internet gaming and ensure proper recognition, acceptability, and respect for the gaming industry;

(k) to protect the legitimate interest of the gaming public;

(l) to protect the legitimate interests of the gaming operators;

(m) to ensure that the functions of the Authority are carried out in a professional manner adhering to the highest international standards;

(n) to promote and enforce any other objectives as the Minister may designate.

This section clearly establishes the intent of the legislation which is to establish an authority and regulate the gaming industry pursuant to these objectives. The objectives speak for themselves as being the raison d'etre of this bill.

Section 4(3) identifies the controlled activities as being bingo, casino games, games of chance, pari-mutuel betting, lotteries and sweepstakes. It also allows the Minister to add to the list of controlled activities, and ensures that all present and future gaming activity will be controlled under the Act.

Section 4(4) prescribes the legal capacity of the Authority giving it statutory corporate existence, perpetual succession, a corporate seal, capacity in civil suits, ability to operate a bank account, and the ability to engage servants agents and independent contractors. It is this subsection that enables the Authority to carry out its functions.

Section 4(5) prescribes that a Board of Directors be charged with management of the Authority.

Section 4(6) provides for the actual appointment of the members of the Board of Directors and the Secretary to the Board.

Section 4(7) prescribes for the operational procedures of the Board of Directors. It sets out their qualifications for office, conduct of meetings, notices of appointment to and removal from office, and mode of resignation of the members. It also provides for the remuneration of the members and Secretary to be fixed by the Minister.

Section 4(8) identifies the functions of the Board which is in essence to implement the policies of the government pursuant to the purpose and objectives of the Authority. It also provides for the Board to advise the Minister on matters pertaining to gaming and take instructions from him on matters of government policy.

Section 4(9) outlines the functions of the Secretary of the Board in the usual format, of attending meetings, taking minutes, keeping the corporate seal and documents and witnessing the signatures of Directors.

Section 4(10) establishes the fund for the Authority into which revenues are paid, and from which the budget for the various functions of the Authority are met.

Section 4(11) provides for the continuation of existing licenses until their expiration date, and re-application for new licenses thereafter.

Section 4(12) prohibits any person from engaging in gaming or the management of premises used for gaming without a license, permission, or proper approval from the Authority or any authorized government body. It is this subsection that seeks to eliminate unlawful gaming and ensures that only controlled games, licensed premises and fit and proper persons function within the industry.

Section 4(13) prescribes the penalties for conducting betting and gaming or being in charge of premises in which betting or gaming is conducted without lawful permission provided under the Principal Act or by Cabinet, or in compliance with the Entertainment Duty Act, or by the Authority which is established under this amendment. This section seeks to ensure that no person can conduct any form of betting and gaming without compliance with the relevant legislation, and provides penalties for so doing. This amendment fills a lacuna in the law which would have enabled persons to slip through the net and deprive the government of revenue which is lawfully due from the conduct of betting or gaming.

Section 5(4) of the Principal Act is amended to provide that all revenues derived from gaming are now paid to the Authority. Whereas they were previously paid into the consolidated fund, the revenues will now be used exclusively for the benefit of the industry that they are derived from.

Section 5(5) of the Principal Act is amended to provide that the directions previously given in writing by the Commissioner of Inland Revenue with regard to the gaming tax are now given by the Authority under its seal.

Section 6(2) of the Principal Act is amended to enable the transfer of jurisdiction from the Commissioner of Inland Revenue to the Authority with regard to entering gaming premises for the purposes of examining documents and assessing the amount of tax due.

Section 8(2) of the Principal Act is amended to enable the transfer of jurisdiction from the Commissioner of Inland revenue to the Authority with regard to levying distress and issuing the relevant warrants therefor against persons delinquent in paying the gaming tax.

Section 10(1) of the Principal Act is amended to ensure that the Authority's ability to bring civil suits in its own name replaces that of the Commissioner of Inland Revenue with regard to the collection of the gaming tax.

Section 11(2) of the Principal Act is amended to enable the transfer of jurisdiction from the Commissioner of Inland Revenue to the Authority with regard to the criminality of persons obstructing the relevant officials in the performance of their duties under the Act.

Section 12(1) of the Principal Act is now amended to give the Minister the power to make regulations for carrying into effect the aims, objectives, and scope of the Authority. This will ensure that the Minister has the proper locus standi and that future regulations made by him are not found to be ultra vires.

The schedule to the Principal Act is amended so that the format of the warrant of distress referred to in Section 8(2) of the Principal Act reflects the changes made by the transfer of jurisdiction from the Commissioner of Inland Revenue to the Authority.

Whenever enacted this bill will address concerns about the different standards applied in regulating both local and internet gaming. It will also address the concerns of money laundering prevention. These issues have been raised by the Financial Action Task Force (FATF) in their overview of both the offshore industry and the casino industry in two entirely separate typology exercises. Antigua and Barbuda has complied with the recent FATF guidelines for the financial services sector of the industry and is now off their list of targeted countries who are deemed to be "non cooperative".

However, it is noted that the FATF and the U.S. Department of the Treasury Financial Crimes Enforcement Network (FinCEN) had previously made findings and recommendations for the local or onshore casino industry. In view of the attacks levied against the internet gaming sector of the offshore industry, the proposed amendments to the Betting and Gaming Act will attempt to show that internet gaming can be regulated at the same standard as traditional gaming and that it ought to be viewed not as a renegade of the offshore industry but as a legitimate sector of the gaming industry.