BCGC: We plan to offer a 10% tax rate of GGR and a reasonable fee structure for operators

Schuetz will be taking part in three different panel sessions at next week's ICE Totally Gaming 2017 in London's ExCeL Centre:

A. 11:40 Tuesday, World Regulatory Briefing.

Panelist.

What is the Perfect Regulatory Eco-system that Promotes
Healthy Markets, Player Protections, and Integrity for the Industry?

B. 11:30 Wednesday. Diversity and Leadership in Gaming.

Speaker.

The Regulator’s View

C. 3:15 Wednesday. Tribal Gaming.

Panelist.

Tribal Gaming Goes Digital

The Bermuda Experience

Bermuda passed a Casino Act at the very end of 2014. The public policy goals were to increase investment, employment and to enhance the tourist product offered by the Island. In the next six-months it appointed five commissioners to create the Bermuda Casino Gaming Commission. That group hired Schuetz as Executive Director, and he reported for work in September of 2015.

The legislative model that Bermuda utilized was heavily influenced by the Singapore legislation that established that country’s integrated resort industry. “This was probably a reasonably bad choice, not because Singapore’s act was not a good act, but because there are very few similarities between the two countries. I therefore spent a material amount of time after I arrived in Bermuda working to develop amendments to the Bermuda Act to make it a better fit for the size, culture, and circumstances of the Island. Our Act allows up to three integrated resort casinos,” Schuetz explained to Yogonet.

What changes have been made to the Act under your leadership?

One of the changes to the Act that we made was to involve other global regulatory jurisdictions to assist us in our findings of suitability and other regulatory functions. It has always seemed inefficient to me that each jurisdiction does its own investigations. That is very business unfriendly, and a waste of both financial and human resources. Because of our proximity, and my deep respect for them as a regulatory entity, we first approached the New Jersey Division of Gaming Enforcement. We are currently working with them to develop a Memorandum of Understanding that will allow us to rely on their investigative efforts, and to use their knowledge, insight and wisdom in our efforts. This will save a great deal of time and money for the operators and manufacturers entering Bermuda. Also, because Bermuda is a British Overseas Territory (BOT), and because we also have great respect for the UK Commission, we are working to develop a similar relationship with them, and other select agencies around the world.

Another change to the Act involved making it possible for the casinos to offer sports betting.

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Bermuda would be the closest location to the Northeastern United States for full sports betting, and we feel that this will assist our operators as both a marketing tool and a revenue source.

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Plus, because we are a BOT, we will allow our operators to offer off-Island political wagers. Since such a large percentage of our market comes from North American, we believe that this we be a great source of interest to these visitors, and revenue to our operators.

A problem with a standard casino in a resort environment such as Bermuda is that there are a great many things to do during the day. We have incredible beaches, pool areas, boating, golf, and the list is almost endless. This means a short revenue window for the casino. The guests return from their activities for the day, shower and dress for dinner, have a lovely dining experience, and then around 10:30 p.m. they are ready for the casino. By around 1:00 a.m. they are ready for bed. We plan on allowing our operators to offer mobile apps ring-fenced to the resort, which means that one can sit at the beach club, the pool, at a lounge, and throughout the resort and play their favorite games. We will ensure that in those areas where children are present that the mobile devices will not work. We believe this greatly enhances the guest experience, and extends the revenue profile for the resort.

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Bermuda has the 4th highest per capita GDP in the world, and the Island is known to have a great many high-wealth and high-income residents

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Often times these people would prefer to game in private environments. To accommodate demand from this sector we will be prepared to allow our operators to provide private gaming in a salon privé.

Bermuda also plans on offering a 10% tax rate of gross gaming revenues, and a reasonable fee structure, again with a goal of developing a business-friendly environment for our operators.

The most important thing we will be offering in Bermuda will be Bermuda. Our resorts are some of the most beautiful destinations areas of the world, located approximately 600 miles off the east coast of the US and connected by direct flights from many US cities. We hope to be offering a wonderful gaming experience in these resorts in early 2018.

Looking ahead and from the regulators' perspective, what will be the biggest challenges facing the industry?

The biggest challenges before regulators today are the fact that the industry is global and the regulatory entities are jurisdictional. This is most evident in the US where each state has its own regulatory entity.

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There has to be a much greater ability to centralize the regulatory functions, and get away from a multitude of unique regulatory bodies

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Gaming creates a great many jobs and stimulates much investment, and yet we have the legacy regulatory approach that makes both of those tasks incredibly difficult. There has been progress made by such groups as the International Association of Gaming Regulators, but we all need to move faster to stay up with the industry’s growth. We are working to overcome this in Bermuda by entering into cooperative agreements with other regulatory environments that allow us to share resources.

What untapped opportunities might operators find as they take a look at the market?

The only untapped opportunity that I am interested in is Bermuda. We think that the Island presents some wonderful opportunities, and the best way to understand those opportunities is to come visit us. We will be more than happy to visit with anyone, and show him or her the great potential of this Island as an investment opportunity.

And what about the regulatory models you're exploring?

Our model is based very much on a US framework where we address the following five areas:

1. The owners, managers, vendors, and sources of finance are free of any inappropriate past or present associations and uphold high ethical standards.
2. The games offered are fair, honest and secure.
3. The operators have sound operational controls.
4. All fees and taxes are appropriately accounted for and paid.
5. Controls are in place to protect the vulnerable.

Beyond this we are also working closely with entities on the Island to ensure that we have quality-training environments available to ensure that the benefits of employment on the Island from the integrated casino resorts accrue to Bermudians.