Ditch gaming altogether, says Schuetz
The executive director of the Bermuda Casino Gaming Commission quit his job after he decided the island's leaders lacked the “political will” to keep the industry corruption-free.
Richard Schuetz, in a letter to commission chairman Alan Dunch seen by The Royal Gazette, said the island should “seriously consider” ditching gaming altogether — or it would put at risk its reputation as a clean financial jurisdiction.
He wrote: “My primary reason for resigning is that I have lost confidence that the Government of Bermuda and its legal system can provide the necessary protections to offer well-regulated casino gaming on the island.
“I sincerely believe that this island will prove incapable of keeping people with questionable backgrounds and behaviours away from the industry.”
Mr Schuetz added: “The Bermuda I have come to know has indicated a lack of respect in making a reasonable effort to adhere to generally accepted international standards for anti-money laundering activities within its existing betting products, in particular the betting shops.
“I have spent a great deal of time and effort over the last 18 months in working to point out the glaring deficiencies in the anti-money laundering regime of this island's betting sector and am now convinced there is an absence of political will to address these deficiencies.”
Mr Schuetz, an American casino industry veteran appointed two years ago, resigned on the morning of the General Election on July 18.
He had been criticised in previous months in the House of Assembly, including by Mark Pettingill, Zane DeSilva and the late Shawn Crockwell.
The verbal attacks led Mr Dunch to accuse MPs of maligning Mr Schuetz's “integrity, professionalism and reputation” after he came here to “assist us in creating a new industry for the island, new job opportunities for our people and a new investment/tourism product”.
Mr Schuetz in 2016 advised the One Bermuda Alliance government to terminate an agreement paving the way for local company MM&I and its American partner firm, Banyan Gaming, to provide a cashless gaming product for casinos, as revealed by The Royal Gazette in a Special Report published last month.
Banyan principals had previously surrendered their licences in two major gaming jurisdictions in the United States and the commission found their history to be “problematic”.
Mr Crockwell, when the tourism minister, signed the memorandum of understanding with MM&I in December 2013, after gaining Cabinet approval, and it was witnessed by Mr Pettingill, the attorney-general at the time.
The pair's law firm went on to represent MM&I after Mr Pettingill quit Cabinet.
In May, Banyan representatives appeared as “experts” at a Progressive Labour Party forum on gaming, which Mr DeSilva helped to organise.
Mr Schuetz said in his resignation letter that casino gaming could be a “valuable tool of economic development, creating jobs and investment for Bermuda” and enhancing tourism — if it was well regulated.
But he added: “I have come to believe, however, that to trust the politicians and their associates on this island with this tool would be a fool's errand.
“From my experience on this island over the last 22 months, I believe that Bermuda should seriously consider not having casinos and other forms of gaming.”
Mr Schuetz, who is still working his six-month notice period and whose replacement has yet to be appointed, said Bermuda's economy was reliant on the country maintaining a “strong reputation of integrity and ethics in its banking and financial sectors”.
He wrote: “I am firmly convinced that this reputation will be subjected to considerable risk if this country continues down the road to introducing casinos.
“This discussion needs to be about the future of Bermuda and I believe that this future is best served without gaming, until the island is capable of developing an appropriate anti-corruption infrastructure to legitimately support the casino industry and developing a serious and mature attitude about installing an effective and robust regime of anti-money laundering for the betting shops.”
He concluded: “I do not believe that is presently the case.”
Mr Schuetz said yesterday: “I acknowledge that the letter is authentic and that nothing has happened since the election to change my opinion. Beyond that, the letter speaks for itself.”
David Burt, the Premier, has defended the island's financial regulatory framework in recent weeks and pledged to “assess the money-laundering risks within the betting sector to determine if anti-money laundering and antiterrorist funding laws need to be put in place”.
He said this week, in a statement defending his government's plan to place the independent gaming commission under ministerial control, that the new PLP administration had “implemented and held ourselves to the highest ethical standards of any government in Bermuda's history and we will continue to operate in that fashion”.
The Premier said: “We are fully aware of our responsibilities to our country and we will not do anything to jeopardise our hard-earned reputation as a sound place to do business.”