The Government is still to decide if betting shops need tougher regulation to block money laundering and terrorism funding as a critical international assessment looms on the horizon.
David Burt, the Premier and Minister of Finance, admitted in November that the laws governing the industry were “outdated” and that the island needed to assess the risks to see if new legislation was necessary.
But with only five months to go before overseas experts from the Caribbean Financial Action Task Force visit the island to assess whether sufficient countermeasures are in place in the financial sector, nothing has been decided.
A government spokeswoman, asked if the risks had been assessed to see if anti-money laundering and antiterrorism funding laws needed to be introduced, told The Royal Gazette in February: “This assessment has begun.”
She said at the start of this month there was no change to that response.
Betting shops fell under Mr Burt’s brief as finance minister when he made his comments in November but tourism minister Jamahl Simmons told Parliament in February that responsibility for managing and regulating the industry would soon be transferred to the Bermuda Casino Gaming Commission.
In a Supreme Court writ filed in March by the commission, the regulatory body said its remit had been “widened to embrace the governance and regulation and supervision of the betting industry as a whole”. The BCGC falls under Mr Simmons’s brief.
Warnings about the absence of controls to prevent dirty-money transactions within the betting industry have been made repeatedly to Bermuda’s leaders, including by former BCGC executive director Richard Schuetz.
In a July 2016 letter sent to Michael Dunkley, then the premier, Mr Schuetz warned that activities in the betting shop industry could “damage many sectors of the economy” by “negatively affecting” CFATF’s assessment. The letter was shared with Mr Burt, then Opposition leader.
In his resignation letter of July 2017, Mr Schuetz wrote: “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 Burt said in November that the international Financial Action Task Force did not identify betting as a sector that must be subject to anti-money laundering and antiterrorist funding obligations and supervision.
“Only casino gaming is named,” said the Premier, adding that FATF standards were the minimum standards and FATF required countries to implement a risk-based AML/ATF framework.
He added: “Bermuda must assess the money-laundering risks within the betting sector to determine if AML/ATF laws need to be put in place.”
Bermuda has six licensed betting shops. Those applying for a bookmaker’s licence under the Betting Act 1975 have to first get a certificate from the Minister of Finance stating that he is satisfied with the business reputation and financial stability of the applicant.
The Ministry of Finance must conduct due diligence before a certificate is issued and only then can an applicant seek a licence from the Betting Licensing Authority.
Members of the public can view files on betting licences but the paperwork does not show whether the licensing authority conducts background checks on foreign individuals with a stake in betting shops here.
If CFATF looks at the money-laundering countermeasures in place for the betting industry, it is likely to consider whether industry operators are subject to stringent enough suitability checks.
The government spokeswoman said: “A preliminary review has begun of the relevant legislation [governing betting shops] to determine what amendments are required.”
She said progress on updating the framework for the licensing of bookmakers and betting agents would not be made until an assessment of the current framework was completed.
The spokeswoman added that the overall assessment of oversight of the betting industry would include a review of whether the selling of overseas lottery tickets needed to be monitored by the Government.
Deborah Blakeney, BCGC’s general counsel, did not respond to e-mailed questions by press time.