Gaming industry hardly subject to controls: Casinos owe millions to treasury

POSTED: 08/26/14 7:05 PM

St. Maarten – Casinos owe the treasury approximately 11 million guilders ($6.15 million) in arrears for casino controller fees. The Wit-Committee writes this in Doing the Right Things Right, its report about Integrity in Public Administration.

The committee notes that there is a problem with collecting these fees. “Reportedly the ordinance is incorrect and there are several civil procedures ongoing in court. “It is unclear why the concession fees are not increased, so that the controllers-compensation can be abolished without diminishing the total revenue,” the report states.

The report furthermore notes that casinos do not pay turnover tax and profit tax but they do pay other taxes like the income tax for personnel according to the receiver. “There are no controls, so it is unclear whether people are also (partially) being paid black.”

Casinos that only have slot machines pay a concession fee of 10,000 guilders (almost $5,600) per month. Casinos that have table games pay 50,000 guilders (almost $28,000) per month. While these fees are being collected according to the receiver, the report notes that it is unclear on which basis these fees have been established.

The tax inspectorate conducts “hardly to no controls” at the casinos, the report states. “This is due to capacity problems (other companies are hardly ever controlled either), but it must be clear that this way there is no insight at all into what is happening in terms of fiscal and criminal relevant cases.”

The Wit-Committee furthermore found that the ties between casino controllers and casinos are too close for comfort. Only recently, the government put a stop to the practice whereby casinos that wanted longer opening hours, paid the controllers cash for their extra time. “It cannot be so that the subject of a control pays the controller directly. The Minister of Economic Affairs has realized this and made sure that the casinos now pay the government. The controllers receive overtime compensation for the extra hours, just like other civil servants.”

The committee found it “remarkable” that when the tax inspectorate by way of the receiver acts against a casino that violates the rules, “the receiver is confronted with a storm of criticism from politicians. Such cheap rhetoric, expressed in and outside of Parliament, does not show the attitude of integrity that may be expected from a responsible representative of the people.”

Another sore point is the elusive Gaming Control Board. Successive governments have consistently failed to establish this supervisor for the gaming industry. The Wit-Committee regrets that “in spite of many promises” this board still has not seen the light of day. “It is absolutely unclear why the establishment is being delayed time and again. The responsible minister has however said in a conversation with the committee that the establishment of the Gaming Control Board is currently in an advanced stage and that this institution will be established shortly,” the report states.

The Wit-Committee recommends to the government to hurry up with the Gaming Control Board and to make sure that it is operational within the next twelve months.

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