12 Sep The Regulation of the Casino Industry in Trinidad and Tobago
The continued shift in perceived societal and moral norms since the dawn of the 21st century has seen many activities that were previously legislated as illegal, become decriminalized, or legalized. Traditionally, the gambling industry has had a stigma of immorality, criminality and vice attached, that was perpetuated by sensational gangster movies such as The Godfather and Casino. However, as society has evolved, there has also been a shift in the perception of gambling, evolving into one of entertainment and fun. This societal shift, coupled with the need to properly monitor activities that are highly susceptible to money laundering or terrorism financing, has spurred more concerted efforts to regulate the gambling industry.
Under the current legislative framework in Trinidad and Tobago (‘T&T’), it remains illegal for persons to use their premises for gambling, with the exception of the following premises:
- Private homes;
- Premises that are permitted under the Liquor Licences Act, Chap. 84:01 to host amusement games; and
- Members’ clubs under the Registration Clubs Act, Chap. 21:01 (the ‘RCA’).
Having regard to the prevailing legislative position, there are currently no legal casinos operating in T&T. However, this does not mean that casino-like activities have not been operating within the jurisdiction; rather, they have been operating as members’ clubs registered under the RCA. T&T has made numerous attempts to properly regulate the “casino” industry in the past and on the 12th July, 2021, these attempts culminated with the passing of the Gambling (Gaming and Betting) Control Bill, 2021 (the ‘2021 Gambling Legislation’).
Although the 2021 Gambling Legislation has been passed, it has not yet entered into force as it is awaiting proclamation by the President. The legislation is intended to revamp the casino industry by introducing several changes which include:
- The introduction of a licensing regime for gaming and betting establishments;
- Greater compliance and notification requirements;
- The creation of a commission, the Gambling (Gaming and Betting) Control Commission (the ‘Commission’);
- A new tax regime; and
- The establishment of the Rehabilitation Fund and Development Fund.
Under the intended licensing regime, persons owning or operating a gaming establishment, manufacturing gaming equipment, selling, importing, supplying and distributing gaming machines and gambling software, providing betting facilities, and utilising premises for betting, are required to apply for and obtain a licence in order to carry out the activities. There are several categories of licences under whose scope a person’s operations may fall within, including:
- Gaming Operator’s Licence – For the operation of a gaming establishment;
- Betting Operator’s Licence – For the operation of a betting shop;
- Bookmaker’s Licence – To conduct betting activities;
- Promoter’s Licence – To stage live racing and pool betting activities;
- Premises Licence – For the conducting of activities at stipulated premises;
- Personal Licence – With respect to key employees; and
- Any other licence that may be deemed necessary.
The fines for engaging in activity without a licence are quite high and range from a fine of $250,000.00 and imprisonment for 3 years, up to $10,000,000.00 and imprisonment for 10 years, based on the offence committed.
An application for a licence is required to be made in accordance with the 2021 Gambling Legislation which requires completion of the prescribed application form, a completed AML/CFT/PF risk assessment questionnaire, and the payment of a fee. Furthermore, the applicant for a licence including an owner or operator, a director, beneficial owner, shareholder, trustee, manager and key employee, are required to be considered a “fit and proper” person for the purposes of the legislation. This test is satisfied by proving that the persons are of good character, competent, honest, financially sound, reputable, reliable and discharge and is likely to discharge their responsibilities fairly.
The new legislation also contains a transitional clause in which persons who currently own or operate a gaming establishment under the Liquor Licences Act or RCA, are required to notify the Commission, within 3 months of the legislation coming into force, of the existence and operation of the establishment, and to provide documents in support. Until a licence the Commission has made a decision on the application for a licence, an applicant cannot operate a gaming establishment, unless such an establishment was already in operation pursuant the Liquor Licences Act or RCA.
Under the 2021 Gambling Legislation, licensees will be required to put in place a system of controls and accounting procedures including:
- Accounting procedures and practices, relating to procedures for the collection, security, storage and transfer of funds;
- To have financial statements audited by a specified auditor registered with the Institute of Chartered Accountants of Trinidad and Tobago;
- To keep books and records at the premises and for no less than 7 years after the completion a transaction;
- To have closed-circuit television footage of the interior and exterior of the premises for 14 days or any other period as specified by the Commission;
- Human resource policies and practices;
- Procedures for collecting, disbursing, storing, recording and cashing gambling instruments, determining, recording and paying winnings, and for recording all financial transactions, for the inspection, maintenance and security of all gaming equipment;
- Arrangements and procedures for safety and security;
- Procedures for discovering and preventing fraudulent or other corrupt practices; and
- Procedures for preventing money laundering and terrorist financing.
Schedule 3 of the legislation contains even more specific particulars regarding what the system controls and accounting systems must comply with, including the contents of the system, bank accounts and other accounts required to be kept, statements of accounts, books and records, and the submission of reports.
Licensees also have several notification requirements in which they are required to inform the Commission of any changes to its Board of Directors, key employees or officers, auditors, beneficial owners, management, control and even a change of shareholdings of 5% or more, or any other change in circumstances of the licensee or the premises, within 14 days of the change.
These requirements are in addition to compliance with relevant AML/CFT requirements including under the Proceeds of Crime Act, Chap. 11:27 the Anti-Terrorism Act, Chap. 12:07 and the Economic Sanctions Act, Chap. 81:01.
The 2021 Gambling Legislation will also see the creation of the Commission to regulate and control gambling within the jurisdiction including that of licensees, inspecting premises where licensed activities are conducted, impounding or seizing gaming machines, documents and records for examination and inspection, resolving disputes between licensees and consumers and providing information to other regulatory, supervisory and governmental agencies. The Commission also has the power to review licences and the manner in which licensees carry on their business, and to suspend or revoke a licence in certain situations.
Under the RCA, members’ clubs are subject to a tax regime which required gaming taxes to be paid to the Board of Inland Revenue and in which their rights were regulated by the Income Tax Act, Chap. 75:01. On the other hand, under the 2021 Gambling Legislation, licensees will be required to pay taxes to the Commission instead. The new legislation is silent however, on the administrative processes for the collection of the tax and the rights of licensees from a tax perspective. This will be particularly important having regard to how high the taxes are, in which the amount that will be levied will double in quantum under the new legislation.
The 2021 Gambling Legislation also provides for the creation of two (2) funds, the Rehabilitation Fund, and the Development Fund. These funds will be administered by an appointment committee who will be tasked with considering applications for funding and disbursing sums from the respective funds.
The Rehabilitation Fund is intended to assist NGO’s and other groups assisting vulnerable people and their families who suffer from gambling additions and other issues stemming from gambling, as well as to assist with programmes for public education, research, training, rehabilitation and intervention regarding gambling associated problems.
The Development Fund on the other hand will be used to assist persons in areas of sport, social and community work, arts, and culture.
While the 2021 Gambling Legislation has not yet entered into force, a concerted effort is being made to introduce the legislation within the near future. In fact, Parts I, II and X of the new legislation, which relate to the creation, constitution, functions, duties and powers of the Commission, have already been proclaimed by the President and is anticipated to assist with getting the legislation operational from an institutional perspective, before the substantive requirements are brought into law. Now is therefore the ideal time for persons who engage in casino-like activities to familiarize themselves with the regulations and requirements under the new legislation, to ensure compliance and a seamless transition of their operations.
Disclaimer: This Document Provides General Guidance Only And Nothing In This Document Constitutes Legal Advice. Should You Require Specific Assistance, Please Contact Your Attorney-At-Law.
This blog post was authored by Miguel Vasquez, associate in the Firm’s Taxation and Dispute and Risk Management groups. For more information, contact Miguel at MiguelV@trinidadlaw.com.