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Dunkley halted MOU because 'it served no purpose'

Former premier Michael Dunkley

Michael Dunkley, the former premier, has said his Government terminated a multimillion- dollar casinos agreement with a local company because it served “no purpose”.

Mr Dunkley, who was a member of Cabinet when the deal with MM&I Holdings was signed, said he was not involved in the drafting of the memorandum of understanding under the One Bermuda Alliance administration and did not see the document until he became leader of the country in May 2014.

He told The Royal Gazette: “When I became premier, I just decided it wasn’t the direction to go. Obviously, when we were looking into gaming we were making sure that we put the best model into place.

“Thus, I talked to my colleagues and said it’s our responsibility as a government to put that model into place, but we let the Bermuda Casino Gaming Commission give us advice. I said: ‘I just think the MOU has no purpose now’.”

As revealed by The Royal Gazette in a special report published on Wednesday, the agreement for MM&I to provide a centralised gaming system for Bermuda’s casinos was signed on 3 December 2013 by the late Shawn Crockwell when he was tourism minister and was witnessed by then attorney-general Mark Pettingill.

Mr Crockwell and Mr Pettingill introduced MM&I to the Cabinet and, after he quit his position, Mr Pettingill’s law firm represented the company, which stood to make tens of millions of dollars a year from the deal.

Mr Dunkley said he saw a presentation that MM&I made to the Cabinet in 2013.

He added: “We were impressed by the system. I thought it was interesting. But remember, I was looking at it as a system. I still don’t think any government should mandate what systems are put in.”

MM&I is owned by Bermudians John Tartaglia and Michael Moniz.

The company’s proposal was that it would invest the “upfront capital costs” to install a centralised gaming system for all casinos in Bermuda and then be paid a management fee of 40 per cent of the island’s gross gaming revenue for electronic gaming.

According to a Cabinet memo from Mr Crockwell, this was a higher management fee than the 30 per cent industry norm, but was appropriate because MM&I would be taking on “all the capital and ongoing risks and providing the electronic gaming machines”.

Mr Dunkley said the 2015 formation of the Bermuda Casino Gaming Commission, an independent regulatory body, meant Government did not need to deal directly with gaming operators.

He added: “I had the greatest respect for Mr Tartaglia and Mr Moniz, but I didn’t want Government to get involved in what systems were to be used.

“I am not casting aspersions in any way. I just didn’t want to get bogged down in that which should be the responsibility of another body.”

The MOU was terminated in July 2016 by Michael Fahy, Mr Crockwell’s successor as tourism minister, who acted on the advice of Richard Schuetz, executive director of the gaming commission.

Mr Fahy, who was also in Cabinet when the MOU was signed, said: “The reason I felt that termination was appropriate was because the terms of that MOU didn’t seem to make any sense to the future of gaming in Bermuda.

“It would be too restrictive on operators to be tied to one system and the numbers envisaged in terms of revenues that would go to MM&I per the MOU were very high indeed.”

Mr Dunkley said he and Mr Fahy met with Mr Tartaglia after the agreement was terminated.

He added: “We suggested they talk to the gaming commission. I said ‘I don’t want the Cabinet or Government to be involved.’ For me, it was finished and the gaming commission could do what it had to do.”

Mr Dunkley said after the Jetgate scandal, which involved Mr Crockwell and Mr Pettingill and led to the resignation of Premier Craig Cannonier, he was keen to make sure everything done within Government was “open and transparent”.

“On gaming, there was no way I was going to have people come in and make allegations about inappropriate dealings. We didn’t need to have any MOU.

“I believed that the gaming commission should be making those decisions.

“I believe operators should be allowed to decide what system they should use, if it fits into the model under law and approved by the commission. I don’t think that one shoe fits all.”

MM&I’s partner firm is Florida-based Banyan Gaming, which developed the cashless gaming technology.

Banyan representatives appeared as “experts” at a Progressive Labour Party forum on safe and responsible gaming in May this year, which was streamed online.

Mr Dunkley, who did not attend the meeting in person, said: “It seemed like at that meeting, especially the Banyan people, just hawked what they were selling. It seems like they were allowing people to hawk their systems. As politicians, we shouldn’t be getting involved in that.”

He said Mr Schuetz, who has resigned from the gaming commission, was a “respected man” who was “castigated in the House of Assembly” by Mr Pettingill, Mr Crockwell and PLP MP Zane DeSilva.

He added: “Gaming can help tourism if we can get politics out of the way.”

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