It was just a few years ago that politicians in Bermuda realized that casino gaming could bring more tourists to the island nation. They had been watching their fellow tropical island destination resorts make amazing strides in increasing business on those tiny islands. But for an island that espouses to be an international finance center, its actions with regard to gaming is disappointing.
Certainly, Bermuda would never be able to host the massive integrated resorts like those found in the Bahamas, the Atlantis and Baha Mar, but some refined gaming in smaller, more intimate venues, would certainly add another amenity to the charming island. And while revenues in Bermuda would never reach the hundreds of millions found elsewhere, double digit millions would work just fine for the tiny island.
When Bermuda passed its law to legalize casino gaming, it wisely set up a gaming commission that was designed to be neutral and transparent, and result in the best upstanding gaming companies setting up shop on the island. It was the Bermudian equivalent of New Jersey Governor Brendan Byrne telling organized crime back in 1978 “keep your &$#*@@ hands off Atlantic City.”
But the problem with even that smaller amount of revenue is that it attracts sometimes the more greedy elements of society, whether it be “businessmen” or government officials.
In Bermuda, government officials were approached by a company called Banyan Gaming (joined in a partnership by MM&I Holdings) with a plan to sell the country’s casinos Banyan games on a cashless linked system that would solve all problems of identifying gamblers and allow the money to flow seamlessly through the system. The system would be a monopoly with no other slot machines permitted unless they opted into the Banyan process. The two companies later entered into a memorandum of understanding signed by two government officials even before casino gaming was legal in Bermuda. The problem was, it wouldn’t be the choice of the casino operators—it would have been the government’s mandate.
Some Banyan principals had surrendered their licenses in other gaming jurisdictions, and an apparent effort was made to create the impression that these officials had been separated from the company after the MM&I agreement. But still the problems continued. (See the details of the story here.)
MM&I recently told Bermuda officials that it planned to donate most of the profits to charity—a claim that mystified Bermuda regulators, particularly Chairman Alan Dunch since it hadn’t been mentioned in any filings or even in any discussions with commission officials.
Meanwhile, some politicians called for Dunch’s resignation, calling his actions “a breach of international standards” and statements “not in the best interests of the government.”
Banyan and MM&I have had numerous contacts with government officials since 2013, with the previous government, One Bermuda Alliance, reaching an agreement with MM&I outside of the regulatory framework. Those connections continue to this day with the new government, run by the Progressive Labor Party.
It’s a sordid affair with apparent quid pro quos, and it threatens the reputation Bermuda has been trying to maintain as a respected international center for finance. The curious situation was complicated by the suspicious death in June 2017 of the former tourism minister, Shawn Crockwell, who was at one time connected to MM&I.
Bermuda’s regulatory system was set up to be an independent body for this very reason. As all progressive regulators will attest, there is no place for interference from elected or appointed officials when it comes to making decisions about casino licenses or applications. Dunch is correct that the government has no authority to remove him as chairman and a continued effort to depose him will clearly damage the nation and has already cast a pall over its still nascent gaming industry.
