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‘More taxes bad for gaming’

Stakeholders warn of closures, job losses
Thursday, September 29, 2016

Additional taxes on the gaming industry could mean a loss of jobs and businesses shutting down, said Russell Bahadoorsingh, president of the Amusement and Gaming Association. 

He told the Business Guardian: “Any increases in taxes means that operators will shut down. This will impact on the amount of bars in operation, the amount of employees who will be not working. Once these operators shut down and the machines shut down—which is 80 per cent of revenue for any bar—it will have an impact on employment.”

Bahadoorsingh said officials of association, which represents bar owners, amusement and gaming operators, have been in contact with the Government about the drafting of the legislation but there has been no pre-budget talks.

“We reached out to the team from the Minister of Finance to find out if they could give us any clarity but so far we have not gotten any response. I have no idea what direction the minister will go in,” he said.

At present, operators of gaming machines pay an annual tax at $2,000 per machine.

“That is on the high end in an industry that is being dominated by casinos and the National Lotteries Control Board (NLCB),” said Bahadoorsingh, “We expressed that in the last meeting with them.”

There are approximately 3,000 gaming machines operating in the country. Bahadoorsingh said they are popular because people are looking for inexpensive fun and entertainment.

“It may sound like a lot but it is not a high profit, high earning industry. The casinos might earn more than us but, for us, it is just an added bonus to the bar operator,” he said.

“We are stipulated by the law as our maximum payouts are $5,000. Someone goes to have a beer, they might spend $20 or $40. It is designed mainly for amusement, mainly for people who go to a bar and want some fun. You can not put in $5,000 and earn $200,000. It does not work that way.”

New laws to regulate gaming

In 2013, then Finance Minister Larry Howai called for regulation of the industry to reduce social harms and money laundering and increase tax revenue. 

In March this year, Finance Minister Colm Imbert announced that the Government would be moving full speed ahead to increases taxes on the gaming industry, which he estimates to attract $7 billion to $10 billion in revenue. 

According to Imbert, however, the quality of information on this is circumscribed by a lack of legislative reporting mechanisms. 

Bahadoorsingh said the last thing the Government said concerning their industry is that they would reach out to them for consultations. 

“Minister Imbert had said they will bring the legislation back to Parliament as is, just as the previous government had it. So far, we have seen nothing of the sort. All we are hearing is increased taxes,” he said.

Bahadoorsingh concedes that the new legislation will structure the industry in terms of what an operator or bar owner can do, adding: “It will legitimise our operations fully. It will give us the ability to expand, to go to the bank and have loan facilities and other things we did not have before. 

“However, taxing us at a higher rate will put us out of business. We have been asking for talks on G-Tech and their operations in T&T. They are set to launch a similar type of operation in conjunction with what they already have with NLCB. This has been rumoured to totally wipe us out. They are eliminating the small man and there will be a big multinational coming to dominate the market. That is our concern and we actually protested outside of Parliament for that.”

He said the gaming industry is more than just gambling as it provides manufacturing and other skilled jobs.

“We produce everything locally here. We manufacture all our machine cabinets here in T&T. Each operator has his individual operator he goes to. My company, Multi Tech Amusement, employs 33 people. We actually do outsourcing of our cabinets. Indirectly there is a lot of income generated for people,” he said.

Whatever is announced tomorrow, Bahadoorsingh said the association plans to meet with the Ministry of Finance officials post-budget.

“We would have loved to meet with them before. We met with them for consultation on the legislation but that was earlier this year. We were happy with the legislation but it is the increase in taxes that concern us as we will be directly impacted,” he said.

In an open letter to the Finance Minister, the Union of Members Clubs and Lottery Workers—representatives of workers in the industry—said their members are anxious to understand the Government’s position in terms of legislation and tax regime. 

“We have, over the period, communicated with the ministry our concerns and fears. It is in this light that we once again write to your esteemed office to indicate that we sincerely hope that the gaming industry will not face an increase in taxation,” the group stated in the letter signed by assistant general secretary Joshua Johnson. 

“Taxes in the gaming industry have gone up 2,400 per cent, a staggering 20 fold in just nine years. No other industry or product faced similar punitive taxes measures. Already those clubs that pay their taxes are tottering in the recession. Most have concessions from their landlords in order to stay in business. Staff have been kept but any increase in taxes will definitely result in unemployment.”

Johnson said union members are of the opinion that taxes should not be tampered with. 

“There are, however, several establishments that are not paying taxes and we are willing to work with the Government to identify these places so the collection of taxes from the industry will be effective and efficient.”


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