Casino sues Government

Much like the debate which clouded the operations of one of his first major enterprises, Black Entertainment Television (BET) and its impact on inner city black youth, Bob Johnson is finding it hard to shirk off criticisms of his Video Lottery Terminals (VLTs) venture, which has been in operation now for more than five years. However, with a thrust by the company to make the VLTs accessible throughout the Caribbean and Latin America, Johnson’s CAGE LLC (operators) has opened up a new can of worms, as to the moral values of gambling and it effects on poor third world countries of Latin America and the Caribbean. Google the name Caribbean Cage and a number of positive and obvious public relations and publicity articles come up, hinting that someone computer savvy is at work behind the company’s PR desk creating a silver lining through search engine optimization. However a deeper search, would reveal that the company has generated some negative criticism about their operations as well.

The debate, which preceded the entry of Caribbean Cage into Saint Lucia was brief, engulfed mainly in political rhetoric which did not pick up much steam. However, a case filed recently by a local attorney on behalf of Treasure Bay Casino against the Government citing a violation of the National Lotteries act and gaming act by allowing the entry of VLT here, should reopen the debate. With another law suit on his hand to deal with, there will be more than just the “good boy” vs “bad boy” action movie for the Attorney General to gamble on.

On their website Caribbean cage LLC describes themselves as “the Premiere gaming Route operator in the Caribbean and Latin America Region.” The company’s focus is on the installation, operation and management of video lottery terminals, linked gaming systems and game content in both venues and distributive systems (Routes) throughout the Caribbean and Latin America. Caribbean CAGE LLC presently operates in Barbados, Puerto Rico, Turks and Caicos, St Kitts and now Saint Lucia. The company is a division of The RLJ Companies, and was co founded by Bob Washington and Bob Johnson former CEO and founder of BET.

A Video Lottery Terminal is a gaming machine that allows gamblers to bet on the outcome of a video game. The VLT is connected to a computerized system that determines the outcome of each bet. Although the outcome of each wager is random, VLT operators are able to program in advance the total amount and number of payouts that its central computer system will allow.

A few weeks ago the STAR spoke with Alison Mathurin, Chairman of the National Lotteries Authority first about the role of the NLA and the entrance of Cage and VLTs into Saint Lucia. According to Mathurin, the NLA was set up to regulate games of chance on the island, be it lotteries, raffles, bingos or promotions set up by groups, organizations or large private sector companies.

“Anything of that nature they must first seek approval from the NLA, so that we can ensure that the public is not treated unfairly,” Mathurin told the STAR, adding that a small percentage is charged on the promotions which would go towards youth and sports development. However, while there is an “act” to deal with this regularization, Mathurin revealed that a number of large companies, including a telecommunication company, a furniture house and a supermarket have constantly violated that law. The penalty for such a breach is EC$10,000 and or a jail sentence for the directors of such companies. “But even when they are flagrantly disregarding the law and even when we write to them, we still try not to go to the extreme even though we have the option, to prosecute anyone,” Mathurin says. “But in truth and in fact they are depriving us of much needed funds, which could go towards our youth and sports development programs,” he added.

About the entry of the Caribbean Cage and the VLTs, Mathurin explained to the STAR that when the new NLA board came on some time ago, they recognized that they were limited in what they got and could do from funds realized by the existing company running lottery games here. “What we found, was that there was an existing management agreement that was set up between the company that runs these games, that is CBN (a Canadian) company. Originally the lotteries was run locally and managed locally, but the last administration ran into problems when the proceeds were tied directly into payments with Beausejour cricket grounds. Apparently the former administration did not want to show it on their books as a debt and so used that means to pay for it,” Mathurin explains. “Somehow or the other, the local lottery was having problems paying the loan, so CBN came in and guaranteed the loan, through their bank in Canada with an annual payment of EC$3.5 million (there is 19 years remaining on the repayments for the Beausejour cricket stadium).  And so all revenue generated from the sale of lottery tickets had to go to paying that loan,” he also revealed.

What CBN agreed to, the STAR learnt, was that they would give the NLA some sort of “good cause subvention” of EC$20,000 monthly so that donations could be made for various youth and sports, programs and causes. “With the number of letters and request we get every month from sports groups and organizations to assist with local activities and overseas travel, there is not a whole lot you can do with EC$20,000 dollars, so we had to find a way to come up with increasing our revenue stream,” Mathurin says. Part of the problem was that the NLA could not seduce another lottery company into operating here since CBN had an exclusive license with the Government.

“So when “Cage” came on board with a proposal to put in the VLT my initial reaction to that after I read up on some of the ills of VLTs was that I was not interested,” Maturin told the STAR. Cage initially approached the Government who then turned the matter over to the NLA. “Personally I was very strongly against it at the time. I felt like, look this thing, the ills may have been so great that possibly outweigh the good, but I recognized that we really needed money and I tell you seriously it was a battle. I think it was not until we went to Barbados and we saw the way it was set up we said if it is going to be set up like this then there is nothing wrong with that,” the NLA Chairman stated. “We do recognize that one or two people may become addicted, you have a lot of people addicted to alcohol but we still sell alcohol, but I think the good will outweigh the bad, and it is something I want to live with as having made the right decision to allow these VLTs into the island,” Mathurin advanced. “I do not think you will get too many people that will disagree when you say that if you can get a lot of these youngsters into clubs and organizations then they have a good opportunity to change their fate. Yes a small number may potentially become addicted but we can do far more good with the income generated from the VLTs for youth and sports projects and building things like multipurpose courts,” he went on to say.

The ten year agreement reached between Cage and the Government, through the National Lotteries Authority is for the establishment and management of up to one thousand machines across the island in bars, restaurants and hotels. However the initial visibility areas here appear to be bars and rum shops frequented by low-income earners. The company guarantees the NLA EC$250,000 a month and when the revenue exceeds a certain amount, the authority gets an additional percentage. The authority says it has access to monitor the games and the revenue generated via a computer system at its office. According to Mathurin they will also work alongside Cage to ensure that facilities where the VLT’s are stationed are properly monitored.

“Our concern is the children and operators under no circumstances should allow children into these operations,” Maturin stated emphatically. “You do not hear an outcry of alcohol being sold near schools, but the VLT is set up in a bar why should we be so worried about it when children are not supposed to be in bars?” he argues.

I posed the question to Alison Mathurin about the effective monitoring, given the nature of this country not to enforce many laws particularly those pertaining to minors and given the NLA own record of not enforcing their own law against violators. “Let me tell you, I take this thing very seriously and we will do all we can to monitor this thing. And let me say that I do not think that the agents that operate these shops will risk losing their license and the money they make from these machines,” Mathurin expressed.

The NLA says that there are plans to develop public campaigns to sensitize the public on addictions in gambling and to promote “safe gambling.” “We will not compromise. It is my own opinion that if adults engage in something that is not illegal then it is their business. For me personally I do not believe in legislating for adults what they should or shouldn’t do as long as they are not breaking the law. I believe that children though need to be protected and for me we have to have an uncompromising approach to this situation as it relates to children,” Mathurin emphasized.

That aside one now have to ask how much did the NLA avail themselves of information regarding its own laws with regards to gaming on the island, existing licenses including those with CBN and Treasure Bay casino. And were they so advised by the island’s AG that everything was air-tight before closing the door on the Cage deal? More on the Treasure Bay law suit against the Government and the NLA in the weekend STAR.