JACKSON... tables amendments to Betting Gaming and Lotteries Act

THE Government yesterday proposed big increases in penalties for illegal bookmaking, a move that apparently gained urgency in the face of a sharp drop in betting on lotteries and warnings that a government tax on winnings was driving people to street-side numbers games.

Under the amendments to the Betting Gaming and Lotteries Act, tabled in Parliament by junior finance minister, Fitz Jackson, illegal bookmaking and betting can attract a fine of up to half-a-million dollars and illegal bookmakers sent to jail for as long as 18 months.

DAVIES... imposed a 15 per cent tax on lottery winnings in September

Existing fines are as low as $25,000.

The Betting Gaming and Lotteries Commission (BGLC) has long proposed substantial increases in penalties for breaches of the gaming laws, but the finance minister, Dr Omar Davies, has recently come under pressure to push them through after his imposition of a 15 per cent tax on lottery winnings backfired.

SAMUDA... Gov't could pull in up to $500 m a year from the sector in taxes

At the time, the finance minister backed off of a plan to impose a similar tax on winnings from horse-racing.

The tax, imposed in September, was part of the finance minister's package of measures to raise an estimated $14 billion to help slash a public sector deficit of more than seven per cent. He projected the measure to draw an additional $220 million from the two lottery firms -- Supreme Ventures and Jamaica Lottery Company -- this fiscal year.

SHAW... taxation has failed the industry

Instead, betting on lotteries have tumbled, with telling negative impact on Davies' tax expectation from the sector.

Within the first two weeks of the imposition of the tax on winnings, sales by Supreme Ventures, the bigger of the two companies, dipped by 38 per cent -- from an average daily sale of $43 million to $26.1 million.

The decline was three percentage points deeper than what was projected by one of its principals Paul Hoo.

Hoo in August had warned that the tax would inevitably lead to the rise in illegal betting and had given an undertaking to put up $500 million against future taxes from a multi-billion investment in a gaming facility his company intended to make, if the Government backed off of the lottery tax. Davies rejected the offer.

"Taxation has failed the industry," the shadow finance minister, Audley Shaw said yesterday as he criticised the Government for its miscalculation of the impact of the tax measure. "What is required is an expansion of the industry."

In fact, gambling sources say that if a 50 per cent decline in revenues now being experienced continued, the Government could lose up to $250 million in a range of taxes from the company -- from what it pays on profits, to a levy taken by the BGLC and its contribution to the government CHASE fund, which finances good causes.

Supreme Ventures, with estimated sales last year of $10 billion, in September announced an agreement to acquire the lottery company, whose sales run at about $2 billion, in a move to consolidate the market.

Supreme Ventures is believed to be still in negotiations with government over the tax as well as pushing for a tighter policing of illegal betting.

In fact, in recent months the authorities have raided several illegal gaming operations and taken people to court.

These moves, and the stiffer penalties unveiled by Jackson yesterday, has won support from Karl Samuda, the Opposition's spokesman on industry and commerce.

He proposed that the authorities increase their monitoring of the industry by using intelligence and technology, but stressed that ultimately it was important that the industry be "facilitated to expand".

Samuda estimated that in the right environment the Government could pull in up to $500 million a year from the sector in taxes.

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