Should we strive for more independence or more control to ensure a successful gaming industry?

Social media has been set alight by the proposed Casino Gaming Amendment Act, a fire stoked between those who fear political interference and those who believe the government has a right to set the direction for gaming on the island. When it comes to gaming governance there is wide variance between strict independence such as New Jersey’s which offers a bi-partisan fixed term, reasoned dismissal approach and that of Singapore which allows for significant Ministerial intervention.  Which is the best fit for Bermuda given our environment, political history and desire for a successful gaming industry?

The opposition has thrown down the gauntlet speaking to those who fear our history of issues becoming stymied by political interference and scandal, defending their version of independence. By contrast, the government speaks to their significant mandate from those who desire them guiding the course of policy.  Was the original law independent or lax enough?  Is the proposed change one that risks enabling political interference and eliminating the independence of the gaming commission?  Is the proposed change one which will bring us in alignment with other jurisdictions allowing the government more control over appointments and policy implementation?

The existing Casino Gaming Act, implemented by the now opposition provided provisions for varying initial fixed term appointments by the Minister of the day.

Limited provisions were added for the removal of a member on the basis of bankruptcy or criminal offenses.  Otherwise, members were appointed and cannot be removed.  The premise appears to have been to provide rotating fixed terms of 3 years for commission members to provide continuity across changes in governments.  Many have decried the lack of “independence” in these original appointments as justification for changing legislation to allow for a change in the guard now.  Did the original legislation go far enough in ensuring independence in the commission and the appointment of its commissioners?

The amendment itself, as published by Bernews, provides provisions for the Minister to remove members from the commission at will as well as give directions on policy.  This represents a substantial departure from the OBA’s original intent.

Minister Simmons argues that the current commissioner has failed in his duties and should be replaced.  It is his assertion that this is the right of a new government to replace commissioners as they see fit.  He suggests this is fairly standard practice internationally and cites Singapore as an example.

“The Casino Gaming Amendment 2017 I tabled brings Bermuda in alignment with other jurisdictions including Singapore regarding Casino Gaming Governance.” bernews.com/2017/11/casino…

What does the Singapore’s Casino Control Act say?

Constitution of Authority

7.

—(1)  The Authority shall consist of the following members:

(a) a Chairman; and

(b) such other members, not being less than 4 or more than 16, as the Minister may, from time to time, determine.

(2)  The Schedule shall have effect with respect to the Authority, its members and its proceedings.


Directions by Minister

11.  The Minister may, after consultation with the Authority or otherwise, give to the Authority such directions, not inconsistent with the provisions of this Act, as to the performance and exercise by the Authority of its functions, duties and powers under this Act as the Minister may consider necessary, and the Authority shall give effect to all such directions.

Thus, indeed Mr. Simmons is correct in suggesting that Singapore does allow the membership of the authority to be chosen by the Minister.  It also matches the proposed legislation in that it enables the Minister to give policy directions to the body itself.

However, various individuals on social media have decried Singapore as a poor example of a strong democracy and not one we should emulate.  According to the wikipedia article on Singapore, it is not held in the highest regard for democratic freedom.

Although the elections are clean, there is no independent electoral authority and the government has strong influence on the media. Freedom House ranks Singapore as “partly free” in its Freedom in the World report,[87] and The Economist ranks Singapore as a “flawed democracy”, the second best rank of four, in its “Democracy Index“.[88][89] 

However, it also notes that ‘Singapore “consistently rated among the least corrupt countries in the world by Transparency International.[97].  That Singapore’s unique combination of a strong almost authoritarian government with an emphasis on meritocracy and good governance is known as the “Singapore model”, and is regarded as a key factor behind Singapore’s political stability, economic growth, and harmonious social order.’

 In 2011, the World Justice Project‘s Rule of Law Index ranked Singapore among the top countries surveyed with regard to “order and security”, “absence of corruption”, and “effective criminal justice”. However, the country received a much lower ranking for “freedom of speech” and “freedom of assembly“.[100] All public gatherings of five or more people require police permits, and protests may legally be held only at the Speakers’ Corner.[101]

Any who believe in the right of the people to demonstrate, march, protest and call out the government as happened during the last administration, would likely be perturbed by the restrictions Singapore places on freedom of speech, freedom of assembly and protest.

Some have argued that by giving the Minister control over who is on the commission as well as the ability to dictate policy that the commission is by no definition independent.  A commentary posted in a newsletter by Global Gaming Business’, a leading publication that focuses on the international gaming industry, had dire warnings for the proposed legislation.  It suggested the legislation “strips the commission of any independence since the members would be removed if they didn’t follow the directions of the government”

In no respected gaming jurisdiction can the government remove a duly appointed member of a gaming commission without proof of wrongdoing.

 

[I]f the government controls what the commission will or will not approve, this is the definition of corruption. A commission that is dependent upon the government for its jobs and funding will simply be a rubber stamp for any deal negotiated by the government along with any strings that are attached to such a deal.

 

Perhaps some officials in Bermuda should contact the regulatory boards in New Jersey, Nevada, the United Kingdom or any reputable gaming jurisdiction. Find out what the procedure is in those regions to remove a sitting commissioner. It’s not easy.

Mr. Simmon’s suggests he does have reasoning and decries Commission Chairman Alan Dunch as having been ineffective and having had an attitude towards the new government. 

“[Mr. Dunch’s] attitude may perhaps be further seen in the recent non-participation in the National Anti-Money Laundering Committee’s National Risk Analysis, failure to provide the requested presentation for the related workshops and failure to provide the analysis and conclusions of the working group that the commission was chairing.”

So what are the regulations surrounding appointing and removing gaming commission members in New Jersey, Nevada and the United Kingdom?

New Jersey has one of the strongest protections of independence with their commission having established fixed terms, bi partisan balance of appointments and removal only by cause.

The Casino Control Commission consists of three members appointed by the Governor of New Jersey with advice and consent of the New Jersey Senate. The number of commissioners was reduced from five on January 17, 2012.[8]

Commissioners serve staggered, five-year terms and can only be removed for cause. By law, no more than two commissioners can be of the same political party, a requirement that is intended to ensure political balance on the panel.

What of the UK? The law provides control to the Secretary of State (Minister) to appoint and remove commissioners as they see fit.

The Gambling Commission shall consist of a chairman and other commissioners appointed by the Secretary of State.

(3)If the Secretary of State thinks that a commissioner is unable, unfit or unwilling to perform his functions, the Secretary of State may dismiss the commissioner.

However, I was unable to find any examples where a commissioner was removed from the Commission by a Secretary of State.

Nevada is less clear, there were no specific provisions that could be found in acts regarding the appointment and removal of regulators.  The only references to the removal of a members was found was in a 2007 Reno based NewsReview.com article when the incoming governor made a stroke of midnight switch of appointees.  The article goes on to note “Casino regulators serve fixed four-year terms to protect them from changes in administrations, governors have not always respected that process” and provides a couple examples.

After the 1982 election, governor-elect Richard Bryan asked Richard Bunker to step down as Gaming Control Board chair, and Bunker complied.

 

“I had indicated that I would like to appoint my own person, and he readily agreed to that,” Bryan said last week.

 

After the 1966 election, governor-elect Paul Laxalt publicly requested Nevada Gaming Commission chair Milton Keefer and commission member James Hotchkiss to step down. They weren’t wild about the idea—Laxalt had attacked them both during the campaign—but within weeks they both resigned.

The governor in 2007 admitted that the law provides for a fixed term and suggested there is no obligation on the part of a member to step down and thus the reason for his the midnight switch to change the appointment before it took effect.  He suggested he “would feel more comfortable having his own person” on the board.  To which the article notes “the whole purpose of the law is for governors not to have their “own” people in these sensitive posts, since the statute insulates appointees from political removal and regulators’ terms often overlap those of governors”

The governor argued that he only wanted to replace the Chair and not the other members, noting a hands-off policy beyond the reappointment.

 “I took the view that essentially the governor ought to have a hands-off policy with respect to the day-to-day operation, but I certainly wanted to be briefed, and was briefed, for example, when we intervened at the Stardust and other properties … during my term.”

 

In a more locally oriented comparison of independence, we could look at the Tourism Authority Act with regard to appointment of the Chairman and members.  Certainly it should serve as an example of the opposition’s idea of independence given that it was set up to be independent of political interference.

So in the case of the Bermuda Tourism Authority, the Chairman is appointed for a fixed term though can be removed with specific cause.

What is perhaps the most interesting point to note is that among all of the jurisdictions mentioned, the only one which provided a provision for a Minister to “give directions to the Commission as to the policy” was Singapore.  None of the other jurisdictions reviewed appeared to have any such provision to allow for a Minister to dictate policy itself.

Overall, the consensus appears to be mixed with the strongest provisions for independence of commissions being New Jersey’s which allows for bi-partisan staggered appointments and removal only with specific cause.  Singapore provides the most flexibility and provisions for Ministerial direction, though it lacks credibility towards independent governance which is accommodated by their low levels of historical corruption.

This leads us to wonder, what are the best provisions for the future of our island to ensure the success and welfare of our fledgling gaming industry?  If independence is a goal, why was the original act not modeled after New Jersey’s system to provide for bi-partisan balance of appointments, fixed terms and reasoned removal?  If independence is not a goal, why have a commission at all?  Are we satisfied enough with our track record on historical corruption on both sides of the isle that we can successfully emulate the Singapore model?  Does the proposed amendment provide an environment where our industry will flourish?  Does our existing law do so?  Perhaps we should go back to the drawing board?

 

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