Black Immigrant Daily News
The committee awaits a reply from Brads Gaming Group Limited to a 12-point list of allegations that was presented in a letter that accused the company of breaching the terms of the exclusive government lotteries contract granted to the company in June 2020.
by Marco Lopez
BELMOPAN, Thurs. Jan. 5, 2023
In a letter dated December 23, 2022, the chairperson of the Lotteries Committee, Narda Garcia, cautions Brad’s Gaming Group Limited, which is the holder of the exclusive license to conduct the government lotteries, that the administration might revoke its license because of what she referred to as possible breaches of contract. In the letter, Garcia, who is also the CEO in the Ministry of Finance, explained that the committee is “considering whether BGGL has failed to comply with conditions and regulations” of the contract. The letter then goes on to list twelve ways in which Brads, in its yearly operations, did not meet the terms stipulated in the contract, and it set January 16, 2023 as the deadline for Brads to submit a response to the points of contention laid out in the 5-page document. The company is being given an opportunity to disprove the allegations and provide a reason why the committee should not consider the revocation of the highly lucrative “boledo contract.”
The letter, sent to Kim Chee, the managing director of Brads, points out that the company does not sell and use tickets in the form prescribed by the Lotteries Committee. It states that the tickets do not bear a mark that was to have been lodged with the Lotteries Committee—a requirement of the contract that has not been fulfilled.
Garcia then points to another breach of the contract by Brads: the failure of the company to develop a system, in coordination with the Income Tax Department and the Lotteries Committee, for the collection, recording and reporting of sales data, as is mandated. It is not known whether the company has even been making any effort to compile, record and verify accurate sales data. The letter further suggests that Brad’s has not attempted to reach out to consult with the two listed agencies on the creation of the system.
There have also been shortfalls in other aspects of the company’s financial reporting, according to Garcia. While all licensees must submit a statement of monthly revenues to the Commissioner of Income Tax and send a copy to the Lotteries Committee, in addition to presenting a statement at the end of the financial year outlining how the government’s share of the profits was calculated, the financial reports submitted by Brads, according to Garcia, were either late or incomplete. She contends in the letter that monthly reports in some instances were sent more than a year after the specified deadline. The company allegedly submitted monthly reports for the period between March 31, 2020, and October 31, 2021, in November of 2021, according to the leaked letter.
Notably, the report that the company is required to submit, should include data on sales, commissions paid to agents, and the company’s expenses.
Additionally, according to Garcia, there is no evidence that the company contracted the services of an independent lottery expert to audit the lottery processes—something that was to have been done in consultation with the Lotteries Committee. They contend that BGGL has not even attempted to seek approval from the committee to appoint someone for the post. Garcia also highlighted the failure of the company to facilitate electronic purchase of the lottery by customers.
In June 2020, the exclusive contract, since called a “sweetheart deal” by current Prime Minister Hon. John Briceño, was signed between the then Barrow administration and Brad’s Gaming Company for a duration of 10 years. A notable exemption from a 12.5% lottery tax was granted to Brads in that contract. According to PM Briceño, this would have yielded profits of nearly 60 million dollars for the company; but that amount earned by the company, he said, represented a loss of potential revenue that would have been earned by the government, had the contract not been signed.
The company, as mentioned, will have until mid-January to respond to the allegations made by the Lotteries Committee, after which the committee will consider, likely based on the answers received, whether or not Brad’s boledo contract should be revoked—something the committee has the legislative authority to do. The company must provide reasons also why its exclusive contract should remain in place.
Three years have elapsed since the granting of what one PUP official calls a half-a-billion-dollar contract to Brad’s Gaming Group Limited—an exclusive agreement signed between the Barrow administration and the company just 4 months before the 2020 landslide victory of the PUP. The PUP had strongly opposed the granting of the contract at the time. In September 2019, the Government of Belize opened a tender for the license to administer the Government Lotteries, for the period of April 1, 2020, to March 31, 2030. After negotiations were completed with the Lotteries Tender Panel, BGGL was granted the contract once again. Bids were reportedly received from three interested parties.
The PUP, during the months leading up to the November 2020 election, went on a warpath against the Barrow administration and the Prime Minister’s son, Anwar Barrow, with allegations that seemingly pointed to his involvement in the operations (and possible partial ownership) of Brad’s Gaming Group Limited. No concrete evidence was ever provided.
Hon. Julius Espat, during an animated presentation at the House of Representatives on September 16, 2020 while he was a member of the Opposition, claimed that the majority owner of Brad’s was a company by the name of Good Lee Limited, an offshore company supposedly located in St. Lucia. Of note, just days before the PUP took office, that company was dissolved. At the time, attorney and PUP Minister Eamon Courtenay had remarked that the move would not have inhibited the investigation.
But according to Senior Counsel Dean Barrow, who now legally represents BGGL, nothing was found untoward when the Financial Intelligence Unit (FIU) dug into the records of Brads, and the company’s contract remained untouched and intact.
“Every requirement was complied with. It was taken to the House of Representatives and laid before the House before it was implemented. There is nothing wrong that the government did in awarding that contract to Brads. Brads won the contract fair and square. Our position that there was nothing wrong with that contract has been completely vindicated, because neither the FIU nor any entity in government has been able to find anything wrong.” Senior Counsel Barrow noted in a June 2022 interview.
These comments were made following Prime Minister Briceño’s House of Representatives announcement that a 12.5% tax would be imposed on Brad’s—lifting the tax exemption granted to the company while Barrow was PM. At the time, Prime Minister Briceño explained that uncollected tax amounted to about $5 million dollars for every year of the contract. PM Briceño noted that if the transfer of control of the government lottery to the private company had not taken place, the country would have earned $60 million in additional revenue.
The company, in response to that move in the House, filed an application seeking to quash SI 55 of 2022, the instrument which legislated the tax. The government retained Senior Counsel Douglas Mendez, and that legal battle has been ongoing since that time. Most recently, the Supreme Court judge presiding over the company’s application, former Justice Lisa Shoman, left the bench in Belize to take up a posting as the legal counsel for CARICOM. A new judge will take over this case, which, according to the former Prime Minister and now attorney for Brads, Dean Barrow, hinges on discrimination against his client.
“That is our case, that you didn’t consult. You had a contract with Brad’s – which gave you the government, a contract made under us, but the government is the government, which gave you all these extra revenues that no other lotteries operator has to pay,” he said.
According to a May 2022 release from BGGL, the government receives an annual license fee of $2,500,000, a $500,000 minimum share of profits, 15% of profits above $1 million, and business tax of $801,344.32.
Barrow goes on to say, “We are saying on the face of it, this is obviously discriminatory. You are already getting three, almost four million dollars, and you are saying you need to put on this 12.5 percent monthly on the gross? They’re going to drive the people out of business, and in effect what are you doing? You are taxing your own lotteries out of existence?”
During an interview, Prime Minister Briceño maintained that the tax against Brad’s operation was necessary. ”I believe that the boledo/lottery was a sweetheart deal and everybody could have predicted who [would] have gotten that contract in 2020. As we have been going through that agreement, we have noticed that the government and people of Belize are foregoing millions of dollars in taxes. It is not right for a small group of people to be able to get away with that. We are estimating that the twelve and a half percent tax, which is what everybody is paying, we would be able to collect an additional six million dollars. Imagine you, we gave up six million dollars to Brads and to other people who are connected to the former Prime Minister. The question is, why is the former Prime Minister defending this case? Why—is it that his son, Anwar Barrow, is paying so much attention to this case that he logs on to the first hearing of that case?”, Prime Minister Briceño said. As noted, the allegation that Barrow may have been a majority owner of Good Lee Limited was never substantiated.
While the arguments over whether the tax of 12.5% should remain in place are currently before the court, the Lotteries Committee’s concerns about Brad’s operation and alleged breach of its exclusive contract may very well lead to another legal battle between the two parties. At this time, both entities are tight-lipped, with BGGL and its attorney, SC Barrow, reportedly in consultation over the matter.
During an interview this week, the Leader of the Opposition, Hon. Moses “Shyne” Barrow, when asked about the government’s move to possibly revoke the lotteries license held by BGGL, deferred questions to his father, former Prime Minister Dean Barrow.
When asked if he supports nationalization of the boledo, he said, “I haven’t given it consideration.”
We attempted to contact CEO Garcia at her office in Belmopan, but she was not in, and our calls to the number we received for the Belize City office went directly to voice mail.