Antigua Strives to Remain No. 1

22 July 1999
The rejuvenated country of Antigua has thrived for the past three years as the world's most attractive offshore Internet gaming haven. In recent months, however, competition from other virtual gaming jurisdictions and a warning from the U.S. Treasury Department have manifested a necessity for change. At a glance, it appears that the Island's government is up to the task.

Way back in the mid '90s, Antigua was--and, to an extent, still is--the place to be for operators of online gambling websites. The government offers a tax-free zone for businesses to operate and has shown a commitment toward consumer protection. And the idea of conducting a business in the midst of a tropical paradise certainly hasn't hurt their cause.

But, there are other tropical paradises out there, and other governments willing to facilitate offshore betting. Plus, the emergence of Australia, with its well drafted consumer protection model, as an online gambling jurisdiction has contributed significantly toward the emergence of legitimate competition.

The distance between Antigua and the rest of the pack diminished a bit in the past year, and in April 1999, the U.S. Treasury Department delivered a punch to the nose by warning U.S. banks and other financial institutions that changes to Antigua's Money Laundering (Prevention) Act of 1996 "significantly weaken its anti-money laundering laws and supervision of its offshore banks."

The collapse of the Antigua and Barbuda-based European Union Bank in August 1997 and changes to the act in November 1998 convinced the Department to issue a Financial Crimes Enforcement Network (FinCEN) Advisory against conducting financial transaction with businesses in Antigua. Specifically, the Department was concerned because the November amendment vested authority in a new International Financial Sector Authority to supervise the country's offshore financial services sector. Warning lights went up since a few members of the Authority's board of directors were members of that sector.

Responding to the Department's vote of non-confidence, Antigua sent a team of government and opposition representatives to the U.S. and U.K. in June to discuss how the country could implement a section of its money laundering legislation without violating its constitution.

Antigua and Barbuda Prime Minister Lester Bird addressed the concerns before the U.S. House of Representatives on June 17. He revealed that his select committee had agreed to adopt several constitutional amendments. "My government wants to make it pellucidly clear to the entire international community that we are willing to cooperate fully to meet the legitimate concerns of our partner governments," Bird testified. He highlighted the amendments as "extending the powers of the Supervisory Authority to investigate and share information with our international partners, reporting of movements of cash and negotiable financial instruments in excess of US$10,000 without exception, extending the provisions for freezing and forfeiting bank accounts and assets, and establishment of a forfeiture fund."

A new set of amendments was drafted and is expected to pass within a week. Gyneth McAllister, recently appointed Director of Offshore Gaming by the Prime Minister's office, is confident that the new legislation will comply with U.S. and U.K. standards. "All the parties concerned--the U.S., the U.K., Antigua and the operators--are content," she explained. "The environment (in Antigua) is very, very positive."

Order appears to be restored, although neither the U.S. nor the U.K. have issued statements yet regarding the countries' approval or disapproval of the new legislation.

Changes are also in store to make Antigua more competitive among jurisdictions as well, and the highly customer-oriented approach starts with a new website. Internet gambling information is currently accessible at the Antigua Free Trade & Processing Zone website, which is helpful and informative, but not up-to-date. All of the information has been extracted from the old site and will be available at a new site--along with several additional features--to be launched in coming days. An 800 number for players will also be available within the next two weeks.

So, is there such a thing as a fully regulated tax-free environment to conduct an online gaming business under optimal conditions? If the vision in Antigua is realized, the answer is 'yes', and it's only weeks away from becoming a reality.

Click Here to view documentation of Antigua's money laundering legislation, testimony of Prime Minister Lester Bird and the FinCEN advisory.

Mark Balestra

Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.