New law sets the stage for Bermuda casinos

Tourism Minister Shawn Crockwell spearheaded landmark casino gaming legislation

Bermuda’s lawmakers have passed the Casino Gaming Act – a milestone piece of legislation to establish a casino gaming industry on the island.

Tourism Minister Shawn Crockwell told legislators that the introduction of a casino gaming industry would help stimulate the island’s ailing tourism sector.

He said other initiatives – such as giving away millions of dollars worth of tax concessions – had failed to attract new investment in hotels.

The 117-page Casino Gaming Act 2014 is to be followed by voluminous regulations aimed at preventing money laundering and mitigating adverse social impacts.

“In comparison to other countries and Island nations we are entering the game late but we have taken the approach of learning from others by introducing legislation that takes into consideration the pitfalls and mistakes made by other jurisdictions and positively set us apart from the rest of this world,” the Minister said.

Passed by the House of Assembly on Friday night, the law makes provisions for the Minister in charge of gaming to designate casino-suitable sites and to appoint a powerful five member Casino Gaming Commission, which will issue up to three casino licenses and regulate the industry, and a four to eight member Problem Gaming Council.

It prohibits transfer of a casino license without a fresh application to the Commission and requires license holders to report any material changes in their circumstances.

The Commission will have power to approve the layout of a casino, gaming equipment and hand out licenses for key casino employees.

Automatic Teller Machines will be banned from casino premises.

People below 18 years of age will not be allowed into casinos and the law provides for additional persons to be excluded by the Commission or casino operators themselves through exclusion orders.

All casino advertising and promotions will have to be approved by the Commission.

Casinos’ internal controls and accounting procedures will also be under the supervision of the Commission.

“Casinos are cash-intensive businesses and cash is a favourite medium of laundering because of the anonymity it provides to the money launderers.,” Crockwell told fellow legislators.

“Specific regulations will be made to ensure a casino operator shall perform such customer due diligence measures to detect or aim to prevent money laundering, financing of terrorism and uphold the integrity of our very reputable financial system.”

And proceeds of a tax on gross gaming revenues will be used to cover costs of regulating the industry and programs approved by the Problem Gaming Council which will have a mandate to “see to the prevention, redress and mitigation of harmful gambling practices”.

A $150,000 fine or seven-year prison sentence awaits anyone who uses or possesses counterfeit chips, interferes with gaming equipment or otherwise cheats in casino gaming.

Possessing casino chips outside of a designated site, forging or counterfeiting chips, impersonating a key employee license holder and entering a casino under false pretenses all carry hefty fines or terms of imprisonment under the new law.

It also makes it an offence – punishable by a $50,000 fine or two years in prison – to fail to provide information, produce equipment for inspection, or to provide misleading information to the police.

Similar penalties apply to those who obstruct officers of the Commission in the performance of their duties.

Casino operators, their agents and employees will have powers to temporarily detain people suspected of violating the gaming law.

Bermuda took its first tentative steps toward establishing a casino gaming industry with a 2010 Green Paper spearheaded by then Premier Ewart Brown.

Among its recommendations were that casino gaming be allowed on the island, that it should be governed by one omnibus piece of legislation and that a ten percent tax be levied on a casino.

But the majority of legislators, including members of Brown’s own cabinet, spoke out against gaming when the non-binding Green Paper was debated. The then Premier did not follow through with a White Paper which would have set the stage for a legalised casino industry.

On Friday, Crockwell – one of a handful of MPs to speak in favor of gaming in the 2010 debate – credited Brown for the progress made to date.

In October last year, the Government passed legislation allowing cruise ships to open their casinos while docked on the island.

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