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Burt: banking crisis created challenges for gaming regulator

David Burt, the Premier, leads members of the Progressive Labour Party to the House of Assembly for the unveiling of the Budget (File photograph by Akil Simmons)

The Bermuda Casino Gaming Commission has been “streamlined” as work to secure banking for casinos in Bermuda continues.

David Burt, the Premier and Minister of Finance, said that Butterfield Bank had decided against extending a loan to the regulatory body.

He said the decision caused the Government to offer $800,000 in funding in the upcoming fiscal year, but noted that the commission will also receive tax revenues from cruise ship gaming to cover its expenses.

Responding to questions put forward by Jarion Richardson, the Leader of the Opposition, Mr Burt blamed last year’s banking crisis for the loan issue.

“We can all remember the banking crisis in early 2023, which made banks very risk averse, and therefore local banks did not want to take on sectors of business deemed as having high risk” he said.

“By the middle of last year, it was our understanding that the progress towards banking of casinos had stalled, due in no small measure to the same crisis that was encountered by multiple banks in early 2023.

“From the perspective of the Government, we are not going to let the actions of the private sector stand in the way of us trying to deliver what we needed to do and remain compliant.”

Mr Burt added that while there are no casinos in Bermuda, the commission is still working to address banking challenges for the industry, reviewing regulations for online gaming and providing support for problem gaming.

“Although there is continued work going on dealing with the issues of banking the proceeds of casino gaming, the gaming commission manages things that are outside of casino gaming,” he said.

“It is a part of our regulatory regime, as it is a body that forms part of NAMLC and is considered a risky sector, so it needs to have adequate monitoring in place for our international assessments, which is pretty important.”

Mr Burt also fired back at the suggestion that gaming falling under the remit of the Minister of Finance had hindered development of the industry on the island.

“When having direct conversations with our overseas partners, who are the ones with the correspondent banking relationships, they said that this was regarded as a strength of our regulatory regime, and they thought that it made it more sound, not less sound, as it would give additional impetus to ensure that the standards of the regulator were upheld at the highest level,” he said.

The comments came as the House of Assembly debated the budget for the Ministry of Finance for the upcoming fiscal year.

The Ministry of Finance was budgeted to receive $240.5 million, $4 million more than last year but about $1.5 million less than what was spent in the past year, according to revised figures.

The largest budgeted area in the ministry was debt and loan guarantees, with $127 million in mandated interest payments.

Mr Burt said in the past year the ministry had reduced taxes for most of Bermuda’s residents while improving the tax-collection mechanism.

In the coming year, he said, work would continue to progress tax reform, implement corporate income tax and Pipa legislation.

Mr Burt also highlighted continuing work to bolster anti-money-laundering measures and meet changing international requirements put in place overseas.

The Premier noted record payroll tax income, with the 2023-24 figures reaching almost $522.2 million and expected to reach more than $580 million in the coming year.

In response to questions from Mr Richardson, Mr Burt said the estimated 13 per cent increase was based on economic models that forecast further economic growth.

“The $30 million is due to the new amount from higher relief,” he said. “The additional monies are due to economic growth, the increase of jobs in the economy.

“As we know, the economy added just over 1,000 jobs last year. There’s an expectation of additional jobs being added to the economy this year.

“That is the reason why those figures are predicted. There is a comprehensive model that the Ministry of Finance uses. It is updated on an annual basis.”

Mr Richardson also questioned a forecast $6.4 million increase in customs duty and asked if the increase was linked to inflation as he understood the number of containers being shipped to the island had fallen.

Mr Burt said the figure was based on current trends and forecasts of increased construction activity in the coming year.

The Premier also said he has looked into complaints about “unfairness” in customs and consulted the Collector of Customs.

“Where there are spaces where I do not believe fairness is happening, I will make my views felt to the collector and the Minister of National Security,” Mr Burt said.

The Premier also explained that a $3 million expenditure included in the revised estimates for the 2023-24 fiscal year listed as “Cyber Incident 2023” represented the funds spent to bring government systems back into operation after last year’s cyberattack.

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Published March 05, 2024 at 7:57 am (Updated March 05, 2024 at 7:57 am)

Burt: banking crisis created challenges for gaming regulator

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