SVL losing 'billions' to illegal Cash Pot sellers

Supreme Ventures's (SVL) cash cow remains a target for illegal traders seeking to tap into what is now a J$17 billion market, but the gaming company said Tuesday that it has no sure way to quantify just how much business it loses to black market operators.

The Betting Gaming and Lotteries Commission (BGLC) meantime has announced success in its prosecution of illicit Cash Pot sales, but in recognition of the challenge, at least one of the convicts was a repeat offender.

"We are aware of the crackdown on illegal Cash Pot activities, however, it is difficult to precisely estimate the losses," said SVL President and Chief Executive Officer Brian George.

"We have in the past estimated the losses of gross sales in the billions, based on feedback from agents," he said.

The BGLC reported on March 23 that Annotto Bay resident Curselda Young was fined J$55,000 or one year in prison after a second conviction on charges of possessing and selling illegal lottery tickets on March 15.

On March 18, a joint BLGC-police raid netted two others who were to face the court on March 29. And, the gaming regulator said that since January 16 it has arrested 30 persons in Portland for unlawful gaming.

Persons charged can either settle without facing a trial for sums up to J$375,000 - referred to as a "fixed penalty" within the law; or go to court and be fined up to J$2 million or serve time of up to two years, depending on the circumstances of the case.

SVL last year earned J$16.8 billion in Cash Pot sales, or J$1.4 billion per month - a slight gain on the monthly J$1.38 billion earned in 2009. Overall, Cash Pot sales contributed 66 per cent to group revenue last year, a slight dip from 68 per cent in 2009.

SVL says BLGC appears to be having success in curtailing the black market sales.

Black market sales down

"Based on the success of the BGLC, we believe it is down, however, in these difficult economic times we recognise the temptation for this activity by the small operators," George told Wednesday Business via email.

"We also recognise that the expanded use of cellphones and potentially the use of intra-island money transfers have provided the platform for significant players to extend their illegal reach," he said.

"This has the greatest potential for growth and it is the area that we understand that the BGLC is focusing their activities," explained George.

Supreme Ventures reported total sales of J$25.4 billion at the close of its financial year at December 2010, or about a billion dollars more than the comparative 12-month period of 2009 (J$28.2 billion in the 14-month period reported as SVL revised its financial year from October to December).

But net profit fell to J$421 million from an estimated J$643 million in the 12-month period in 2009 (J$751 million in the 14-month period reported).

George is optimistic that the company's performance will be better this period.

"First of all we do not expect a repeat of the jackpot losses in 2011 that we experienced in 2010," he said.

"Second, we are confident that the impact of the new games along with the aggressive promotion of the existing games will restore us to growth, and finally, we are in advanced discussions with our major suppliers to reduce cost which along with other cost-saving measures should significantly improve our profit performance in 2011."

sabrina.gordon@gleanerjm.com