Government eyes Internet gambling as source of revenue
By Tim Smith
Bermuda could tap into a market worth billions of dollars — but also enter an international legal row — by becoming an offshore host for online gambling.
The Island is currently assessing its suitability as a centre of Internet gaming, following a path taken by rival jurisdictions including Antigua and Barbuda and Costa Rica.
It would mean gamblers abroad, most likely from the US, having their wagers processed in Bermuda — giving the betting companies tax breaks on profits and keeping them out of reach of anti-Internet gambling American authorities.
Several years ago, Antigua turned to Internet gambling — a $12 billion global business — as a way to end its reliance on tourism, a problem Premier Ewart Brown is equally keen to solve in Bermuda.
In 2000, Antigua's online gaming industry generated $37.5 million in taxes, provided 3,000 jobs and was said to be giving people a route to affluence other than drugs trafficking. However, about five years ago the US introduced laws blocking its residents from using online casinos, claiming it needed to protect children and prevent financial crimes such as money laundering.
Antigua hit back by becoming the smallest country ever to successfully bring a case with the World Trade Organisation, arguing such a move was illegal and unfair as American operators were allowed to offer remote betting on horse- and dog-racing.
Since then there has been much tweaking of the US online gambling laws, with commentators saying the authorities have been trying to clamp down on it, while Antigua has been pushing for compensation from the US.
Some claim it is very difficult to enforce US law in jurisdictions which do not respect US statutes and that banning online gaming would drive it into the wrong hands.
Meanwhile, figures from two years ago show more than 200 Internet-gambling companies have set up shop in Costa Rica, earning it the tag: 'the Internet's Las Vegas'.
Poker is among the most popular Internet games — for many players in Bermuda as well — while gamblers can also have an online flutter with blackjack, craps and roulette among others.
Internet gaming is one of a series of possibilities, including casinos and a national lottery, being looked at in the $300,000 feasibility study by the Innovation Group.
The Premier, through his press secretary Glenn Jones, has refused to give any information about what we could expect to see in Bermuda, or to confirm exactly what he had in mind when he announced Innovation would determine Bermuda's suitability as a centre of Internet gaming.
Dr. Brown's predecessor as Tourism Minister, Renee Webb, backed the study, telling The Royal Gazette: "I was publicly in support of legalising gambling. Firstly, because it already exists through bingo, horse-racing, football pools and Crown and Anchor.
"So you are not legalising gambling but extending what already exists Islandwide. I supported a national lottery where the benefits go to education, the arts and other national causes similar to the British lottery.
"With respect to casinos, I supported them in principle as sophisticated entertainment centres — containing restaurants, shows, and gambling tables.
"These forms of gambling endeavour exist worldwide in places that once outlawed gambling, such as Sri Lanka, Egypt, and Caribbean islands. In these cases it is not widespread but restricted to certain areas like hotels."
Ms Webb said she had two feasibility studies done in her time as a Minister and met with at least two groups who were interested in opening operations in Bermuda. The Premier also mentioned the feasibility study in an interview with the BBC World Service while on his current trip to the UK.
"Bermuda has a history of having had two significant economic bases. One is tourism and the other one is international business," Dr. Brown said.
"We don't export anything; we import 90 percent of what we consume and so we haven't been able to come up with another pillar for our economy, although we are exploring new revenue streams ... like gaming.
"We've actually announced last week that we're going to have a feasibility study on gaming. That's going to start next week."
Asked if big casinos would be opened, he replied: "Well I don't know. I don't know that it's going to be big casinos opening up. We are studying everything from Internet gambling to lotteries."
