Sat | Aug 19, 2017

Gordon Robinson | Monopoly move?

Published:Sunday | November 20, 2016 | 11:00 AM
Jockey Javaughn Patterson pushing PIANO MAN to victory over MEMORY OF TS with jockey Dane Dawkins to win the Dr Paul Wright Trophy race at Caymanas Park on Saturday, November 12.

For decades now, I've been a lone voice calling for the divestment of horse racing to the private sector.

My calls were greeted with howls of derision by 'experts' (or 'ex-perches' who acted like railbirds interested only in betting) who said nobody would ever buy this track; horse racing is a losing business; and the claiming system means certain bankruptcy. I've pointed out repeatedly that horse racing in Jamaica is a losing business BECAUSE it's government owned and the application of private-sector principles would soon refloat that sinking ship independently of whatever type of racing product is offered.

I admit to a few qualms when I learnt that:

- One of the bidders was Supreme Ventures Limited (SVL), which already had a stranglehold on the gaming industry (lotteries, slots, games) and a foothold into the betting business (bookmaking);

- The bidding process was conducted in secret, including whether any vetting had been done on members of the enterprise team to rule out conflicts;

- Even after SVL was predictably named as the preferred bidder (your humble scribe called it weeks before it was officially announced), citizens, including horse racing participants, were excluded from the negotiating process - not even updates were given.

However, I didn't complain (loudly) because:

- SVL is more than qualified to operate Caymanas Park racetrack;

- The sole niggling worry (relieved by market theories) was whether it was truly interested in racing or in a de facto gambling monopoly;

- Anybody was better than Government which, against all odds, brought Jamaica's most popular pastime to the brink of insolvency.

By 'market theories', I refer to my expectation that any entrepreneur with a vision would be allowed to apply to operate a competing racetrack (maybe on the north coast, as some sort of geographical exclusivity for SVL wouldn't be unreasonable). This open market could discourage SVL from contemplating Caymanas Park as a loss leader only and ensure SVL crossed 't's and dotted 'i's while entrusted with the people's sport.

So, I began reading the Gleaner report of recent parliamentary activity (November 12, 'Opposition demands time to debate exclusive horse racing bills') calmly enough:

 

GEOGRAPHICAL EXCLUSIVITY

 

"Passage of two bills that will allow for the granting of geographic exclusivity in respect of a licence to Supreme Ventures, the preferred bidder in the divestment of Caymanas Track Limited, was delayed on Wednesday after some members of the parliamentary Opposition asked for time to review the legislation before making their contribution to the debate."

As I said before, I anticipated SOME geographic exclusivity. So, no problem.

"Finance and the Public Service Minister Audley Shaw, who piloted the bill, told his parliamentary colleagues that the passage of the bills was imperative in order to close the divestment process with Supreme Ventures Limited."

WHAT? Now I'm sitting up in my chair with a tremulous feeling in my rear end as if it apprehends impending violation. Is it possible Government-SVL negotiations effectively allowed SVL to usurp Parliament's role and legislate (or demand Parliament legislate) for the sole benefit of SVL?

C'mon, man! This isn't the thin edge of the wedge; it's the whole flipping door. NOTHING in Government's request for proposals suggested that it was willing to legislate on demand as a precondition to divestment. What's going on?

"He said the bills, an Act to Amend the Betting, Gaming and Lotteries Act [BGLA] and an Act to Amend the Jamaica Racing Commission Act [JRCA], would facilitate the establishment of a regulatory framework that attracts and supports investment in the horse racing industry and pave the way for the development of Caymanas track into a modern world-class racing complex."

Jesus H Christ on a Japanese crutch! Why do these acts need amendment to "facilitate the establishment of a regulatory framework that attracts and supports investment in the horse racing industry"? Current regulatory frameworks, which include a 15-year licence to the horse racing promoter on certain vital conditions to guard against malpractice and ensure transparency, have been attracting investment for decades. They attracted SVL and another to bid for the racetrack.

So, what's REALLY happening here? WHY does the BGLA need amendment when the sole legal transaction is the transfer of the right to operate a racetrack (governed by the JRCA only) from CTL to SVL? The BGLA already provides for a tote licence to be given to the horse racing promoter. But, it also provides for the grant of bookmaker permits and lottery licences. My sources tell me there's a plan afoot to allow the promoting company to hold not only a pool betting (tote) licence but also a bookmaker's permit.

'Are You' Shaw, IS THIS TRUE? Is SVL demanding that, not only should it be the sole promoter of horse racing AND a bookmaker (Just Bet), but the entity it uses to acquire CTL should hold BOTH a promoter's licence AND a bookmaker's permit? If yes, are you acceding to these demands? How would this affect licensed bookmakers who've been the industry's lifeblood for decades; who've single-handedly popularised the sport to the benefit of Jamaica's revenues AND to the promoting company's benefit at a time when the promoter could only sell bets at the track?

Is this the creeping, calculated commencement of a scheme to eliminate all bookmaking competition by charging competitor bookmakers exorbitant 'rights fees', while the promoter's bookie and SVL's bookies get preferential treatment?

Minister Shaw, please immediately tell Jamaica whether you have agreed to sacrifice current bookies on the altar of Government's compulsion to divest the CTL albatross to SVL despite the availability of a competing bidder who didn't demand anything like that? Do these amendment bills place any new restrictions on existing bookies' activities?

"Among the terms of the divestment transaction is the long-term lease of 30 years of Caymanas Park.

Shaw said the Government also gave approval for ALL-ISLAND EXCLUSIVITY IN RESPECT OF HORSE RACING [my emphasis] to be granted to the preferred bidder for a period of 15 years."

 

GAMBLING MONOPOLY

 

Well, kiss my Clara Gungus Natty! This is obviously mealy-mouthed obfuscation for the gift of a complete gambling monopoly to SVL. Why is 'islandwide' exclusivity needed? Does this benefit Jamaica, or only SVL? What exactly does "all-island exclusivity in respect of horse racing" mean? Can nobody else invest in a racetrack, no matter how far away, or obtain a bookmaker's permit? Don't be fooled by the 15-year limit. After the howls die down (approximately nine days), the way will be clear in 15 years to quietly renew.

But the worst, most disgusting, disgraceful, dismissive, disingenuous plan exposed by the Gleaner report came later.

"He later revealed that a signing between the Government and Supreme Ventures is scheduled for November 18. According to Shaw, the passage of the bill would clear the way for redundancy payments to the workers of Caymanas Park prior to Christmas and the formal takeover of the entity by January 5, 2017. 'If the signing is going to be delayed, then the redundancy payment to the workers will also be set back,' he added."

'Scrise! I promise 'Are You' Shaw that, given their 'druthers, CTL workers would prefer his/her permanent job for Christmas, not some transient "redundancy payments". Translated from political gobbledygook into English, Shaw really said: "If the signing is going to be delayed, then the fiscal space government anticipated for Christmas, so we could give out extra bullo work will also be set back."

The problem going forward with a diverse gambling industry in a small country is we have too many cooks (regulators) certain to spoil the broth. Advanced nations attack gambling's known proclivities by limiting regulation to one authority with professionally manned departments for each industry segment. Political appointments are limited to an executive chairman and two external directors with skill sets in accounting and security.

If ever a situation inspired a reminder of the fine art of the limerick, this is it.

There was a young lady named Sally

who enjoyed the occasional dally.

She sat on the lap

of a well-endowed chap

and said, "Well, that's right up my alley!"

Peace and love.

- Gordon Robinson is an attorney-at-law. Email feedback to columns