Tue | Aug 4, 2020

Mark Wignall | Mahoe gaming riding on luck

Published:Sunday | August 2, 2020 | 12:13 AM

In 2011, Audley Shaw, who was then the finance minister in the Jamaica Labour Party (JLP) administration just before the party was booted from government, had reportedly advised the Betting, Gaming and Lotteries Commission (BGLC) that it should consult Cabinet before any new licence in the sector was issued.

That was plainly a no-nonsense approach from Shaw, who must have known that “multiple lottery operator structures are in place nearly exclusively by default, in jurisdictions that have lacked the regulatory framework to prevent this evolution. There is no precedent, in the worldwide lottery industry, whereby a jurisdiction has regulated itself into a multiple lottery structure in the past 20 plus years.” (From a private study conducted in 2018).

In plain language, sectors such as gaming, alcohol production, and smoking are seen as the vices that are dubbed as ‘sin.’ So there must be a sin tax. With Supreme Ventures raking in billions per year, it has written into its contract that it is a big bucket of cash and the Government is always around with its vacuum cleaner.

In that understanding, policymakers ought to understand that the classic economic theory that more in the market place provides the consumer with the best deal will not necessarily hold in the gaming-licence arrangement.

So, the first big question that we are forced to ask is, at which stage did former Finance Minister Shaw retreat into a softening of his original position? Bordering that would be questioning what broke that link and what new information was passed on to the present Finance Minister, Dr Nigel Clarke, that saw the policy shift.

In fact, the head of the BGLC, Vitus Evans, told Nationwide a few days ago that Dr Clarke had made no such request to Cabinet. Certainly, it is also worth asking, why has this been so? Is the Cabinet prepared to issue a release, or will we hear from Dr Clarke?

At the time that Supreme Ventures was granted its licence, one key part of the conditions was the integrity and scope of operations of its original platform provider, GTech.

Late last week, the matter attracted the attention of no less a personality and big player in our geopolitical life than United States Ambassador to Kingston, Donald Tapia, who according to Nationwide News, has written the Government of Jamaica, expressing concerns about Mahoe Gaming.

It is my understanding that Genlot has much to do to convince those concerned that it has met the conditions of integrity and wide scope of operations. Other questions need to be asked. While I would never say that Genlot operates in the dark, why has the BGLC offered Mahoe Gaming a licence without giving Genlot the all-clear?

IMPORTANT TO MILK THE CASH COW

Another question to be asked is, how far has Mahoe Gaming engaged with Genlot? Are signed agreements in place?

As previously stated, research has shown that multiple lotteries do not guarantee maximum tax revenues to Government when the original intention of the private sector-government partnership is providing tons of cash for the Government to use in the ‘good causes’ sector of the country.

Having multiple operators forces them all to spend more on marketing themselves, which waters down total revenue. This cannibalisation has been proven to be the main driver favouring single operators.

In 2018, Supreme Ventures Group generated a huge $2.1 billion in revenues. In its payout to the Government, it provided a $800 million increase or over 12 per cent higher than in 2017. Ticket sales were $62 billion. About $43 billion-plus was paid out to other stakeholders. Those covered prizes to customers, payouts to retailers, etc.

Once that cash cow is established, why would any sane person want to disturb that? So far, no one can say with any certainty that all has not been above board. But, in this day and age, where all is suspect, especially if a weak link in a chain of events is identified, we may need to take a more forensic look.

There are some who believe that Greg Christie from the Integrity Commission has long been on an anti-business crusade. Indeed, I once believed that and still do believe that he erred at least once in a most important national matter.

And if he wants to expand his scope of operations into the private sector, especially where it intersects with Government, maybe something is staring him right in the eyes.

WHAT CAN STOP THE HOLNESS WAVE?

One of the great criticisms about the polls done leading up to the February 2016 elections is the fact that most pollsters were wrong. And that ensnared a pundit like me.

At that time, there was no single political party making itself known over the other in its public support. One had to literally mine for the information, and because of this, too many of us fell into the trap of making assumptions and deductions based on the pre-emptive strength of the incumbent, the PNP.

This time around, one doesn’t have to dig below the ground. This is strip mining, where the first cover is JLP support, and all other layers are supporting the party, too. Of bigger importance is that not one single poll has shown Andrew Holness in a second-place position to anyone in the opposition PNP. In fact, the opposite is the case.

I am not quite sure what spaceship has carried the young prime minister here, but it seems that like a rockstar, he has landed live on stage and is slowly being seen as another political name from another time before the 1980s.

Were I the PNP, I would start to begin prepping for 2026. To begin prepping for new leadership now. I believe that governance in the period from 2021 onwards will be very problematic for Andrew Holness and the JLP as an unknown renewal is demanded.

PNP, this is simply not your time now. A united PNP in 2025-2026 is more likely.

- Mark Wignall is a political and public-affairs analyst. Email feedback to columns@gleanerjm.com and mawigsr@gmail.com.