By Cliff Williams, ContributorTHIS year continues to be the most interesting in the history of the gaming industry and the operations have been grabbing headlines consistently especially after the revelation that between legal and unlicensed players, in excess of $20 billion is being generated in sales.
Illegal operators could be responsible for up to a third of this figure and even a higher percentages can be realised, as some of the numbers games offered by the two legally constituted lottery companies are easily pirated.
PARALLEL OPERATIONS
Unfortunately for this type of business, it is completely exposed to piracy as the results of each draw must be made public at scheduled times and this lends itself to easy establishment of parallel operations.
In carrying out these illegal operations, the perpetrators have become highly efficient and consequently very competitive as they offer better odds, credit, settle with the winners almost instantly and are proactive in the pursuit of business by going almost door to door.
It is also very important to also understand that with insignificant overhead costs, their field agents earn higher percentages in commission than those of the licensed operators.
The real problem for the legal operators is government machinery for the regulation of operators and enforcement of the country's Gaming Laws is inadequate to address the problem effectively. A past chairman of the Betting Gaming & Lotteries Commission confirmed this recently in a radio interview.
ILLEGAL GAMING
Truth be told, government cannot establish machinery to deal effectively with illegal gaming if a large percentage of the betting public insists it finds doing business with unlicensed operators a more attractive proposition.
It therefore means much stiffer sanctions are going to have to be levied against punters found guilty of patronising illegal operations as well as the organisers of unlicensed gambling entities.
The purveyors of illegal gambling are not risk averse but the average punter may find the penalties sufficiently onerous to be a chilling enough deterrent.
What I think the legal operators, the lottery companies, bookmakers and live racing promoters Caymanas Track Limited need to do is get involved in a public education campaign to appeal to gamblers' better judgment.
These entities fund substantial advertising budgets and it is a relatively simple matter to adjust their marketing strategies to include such a programme.
The recent re-introduction of taxes on lottery winnings could see more serious competition coming to challenge the legal operators in the marketplace as unlicensed operators will almost certainly be offering more attractive inducements to the players of the numbers games.
TAX ON LOTTERY WINNINGS
Incidentally, there was a 25 per cent tax on lottery winnings, which was later rescinded by the Minister of Finance, but the tax is now being re-introduced at 15 per cent.
For my part, I simply cannot understand why the government is choosing to levy taxes on winnings when there is ample evidence that a Gross Profit Tax regime, similar to that in Great Britain, would be far more productive and actually helps legal operators to compete successfully with the unlicensed ones.
I cannot believe the Minister of Finance has not heard of this, or is it that he thinks if it is instituted here there will be a different outcome?
Already, the lottery companies are reporting a sales reduction of 25 per cent this week and it is hoped that this is temporary as the players get used to the idea of less winnings.
There can be no question that the timing of the taxation, given the inability of government's regulatory and enforcement machinery to cope with the explosion of illegal gaming operations, is at least questionable and certainly seems to be unwise at this time.
