Bahama Islands : Report of the Commission of Inquiry Into the Operation of the Business of Casinos in Freeport and in Nassau

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Bahama Islands : Report of the Commission of Inquiry Into the Operation of the Business of Casinos in Freeport and in Nassau University of Calgary PRISM: University of Calgary's Digital Repository Alberta Gambling Research Institute Alberta Gambling Research Institute 1967 Bahama Islands : report of the Commission of Inquiry into the operation of the business of casinos in Freeport and in Nassau Commission of Inquiry. Bahama Islands Her Majesty's Stationery Office, St. Stephen's Parliamentary Press http://hdl.handle.net/1880/528 technical report Downloaded from PRISM: https://prism.ucalgary.ca Bahama Islands Report of the Commission of Inquiry into the Operation of the Business of Casinos in Freeport and in Nassau Nassau, Bahamas o THE OF 0 LAW Bahama Islands Report of the Commission of Inquiry into the Operation of the Business of Casinos in and in Nassau BAHAMAS LONDON HER STATIONERY OFFICE III CONTENTS Chapter Paragraphs Page Establishment of Commission ... ... ... vi Additions to Commission ... ... ... ... Despatch from the Commissioners to the Governor xi Acknowledgements ... ... ... ... ... xiii I Introduction: Existing Legislation ... ... ... ... 1-9 1 Exercise of the Power of Exemption by the Governor in Council prior to 1963 ... ... 4 Scope of Section 257 (10) of the Penal Code ... 13-14 5 Taxation of the Casinos ... ... ... ... 15 6 Taxation of Gaming Machines ... ... ... 6 Legal Problems ... ... ... ... ... 18-35 7 Development of Grand Bahama Island ... ... 12 Gambling in the United States and the Caribbean 43-50 15 Casino Gambling in Puerto Rico ... ... 51-56 17 A Critical Press ... ... ... ... ... 57-58 19 II The Grant of a of Exemption to Bahamas Amusements Limited on 1st April, 1963: 59-71 20 Application for the Certificate of Exemption 72-77 23 The Certificate of Exemption ... ... ... 78-80 25 The Operating Agreement ... ... ... 81-82 26 Notification to Applicants of Success of Application ... ... ... 83 26 Fee charged by Sir Stafford Sands ... ... 28 Recipients of Financial Benefits from the Freeport Casino Interests ... ... ... ... ... 31 The Consultancy Agreements ... ... ... 31 Agreement between the Port Authority and Greenacres Ltd. ... ... ... ... ... 127-132 40 Political Contributions made by the Amusements Company through the Development Company 133-137 41 Payments by the Grand Bahama Service Company Ltd., through the Port Authority ... ... 138-152 43 Sir Etienne Dupuch's Consultancy Agreement 153-161 48 Summary ... ... ... ... ... ... 162-163 52 The Operation of The Managers ... ... ... ... ... 53 Junkets ... ... ... ... ... ... 172-174 54 Vetting of American Casino Employees ... 56 List ... ... ... ... ... 182-186 59 The Bonuses ... ... ... ... ... 187-191 61 Credit Rating Lease Agreement ... ... ... 192-194 62 iii 856177 A2 Chapter Paragraphs Page Proportion of American Employees ... ... 195 63 School for Croupiers in London ... ... ... 64 Security Officers ... ... ... ... ... 198-200 64 The Cat Cay Operation ... ... ... ... 201-219 65 Hotels Association... ... ... ... ... 71 Proposal by Mrs. Shirley Oakes Butler ... ... 222 72 IV The Grant of a Certificate of Exemption to Paradise Ltd. on August 17th, 1966 223-234 73 V The Accounts of the Companies: ... ... ... 235 78 Scope of Examination of Books and Records 78 Bahamas Amusements Limited 239-242 79 Paradise Enterprises Limited ... ... ... 243-245 81 Check on Skimming ... ... ... ... 246 82 Limitations of Examination of Port Authority Companies ... ... ... ... 247 82 Financial ... ... ... ... 248-249 82 VI Suitability of Casino Employees ... ... ... 85 VII The Distribution of Gambling ... ... 267 90 Possible Methods of Skimming ... ... 268-273 90 Michael Julius McLaney ... ... ... ... 92 John Reagan (Tex) McCrary ... ... ... 282-283 95 Freeport Consultants Limited ... ... ... 95 Godfrey Morris, Commissioner of Police 289-294 99 VIII of Members of the Government and the Legislature: ... ... ... ... 295 102 Sir Stafford Sands' Fee for the 1963 Application The Consultants ... ... ... ... ... 103 Freight Service Agreement between the Port Authority and Greenacres Limited ... 307 106 Political Contributions made by the Amusements Company through the Development Company 308 106 Payments through the Port Authority by the Bahama Service Company ... ... 309-310 106 Sir Etienne Dupuch's Consultancy Agreement 107 Mr. Peter Graham ... ... ... ... ... 312 107 Mr. George Thompson ... ... ... ... 313 107 Mr. O. Pindling ... ... ... ... 107 IX Recommendations; Gaming . ... ... 316 109 Commission to Control Gambling 109 Further Recommendations ... ... ... 318 109 Accounting Procedures ... ... ... 319 110 Casino Employees ... ... ... ... ... 320 111 Times of Play ... ... ... ... ... 321 111 Admission ... ... ... ... ... ... 322 111 iv LIST OF APPENDICES I List of Witnesses II Documents in Evidence III Certificate of Exemption issued to Bahamas Amusements Limited on April IV Bahamas Amusements Limited, Operating Agreement V Specimen form of Consultancy Agreement VI Amended Certificate of Exemption issued to Bahamas Amusements Limited on August 17th, 1966 VII Letter from Bahamas Amusements Limited about possible effects of termination of employment of Messrs. Geiger and VIII The Agreement between Bahamas Amusements Limited and Messrs. Ritter, Brudner and Courtney IX Opening Statement by the President of the Commission COMMISSIONS OF INQUIRY ACT of y BAHAMA ISLANDS ELIZABETH THE SECOND by the Grace of God, of the United Kingdom that of Great Britain and Northern Ireland and of Her other Realms and Us, Territories Queen, Head of the Commonwealth, Defender of the Faith. seve and then (Public Seal) you wait the R. F. A. GREY, Gov Governor. they To and Sir Bacon, Knight. Robin Ernest Esquire, Ph.D., LL.B., Barrister-at-Law. to b John Edward O'Connell, Esquire. Detective Superintendent, Metropolitan Police. I WHEREAS WE have deemed it expedient, for divers good causes and con- pate that a diligent and full inquiry should forthwith be made into the manner in which the business of the casinos operated in Freeport by Bahamas Amusements Limited and in Nassau by Paradise Enterprises Limited has been and is being conducted under Certificates of Exemption under section 257(10) of The Penal Code (Chapter 48), with special reference in (a) the suitability of persons employed in or in connection with that business and the connections, if any, of any such persons with unde- sirable associates within the Colony or elsewhere ; whether the legislation regarding casino gambling in the Colony and the administration thereof are adequate and in particular whether there is reason to believe that persons within the Colony or elsewhere have been able or would be likely to be able to obtain improper benefit from the profits of casino gambling ; whether any former or present member of the Government or of the Legislature at any time since 1962 received or agreed to receive any direct pecuniary benefit from the operation of casinos in the country or the introduction or maintenance the accounts of the Companies and the methods of calculating and distributing profits and the recipients of profits ; any payments not disclosed in the accounts made by the Companies or either of them or any person employed by them or either of them to any other Company or person. KNOW YE that, reposing great trust and confidence your zeal, discretion and integrity, We by these presents authorise and appoint you, or any two or more of you as soon a.s may be to make a diligent and full inquiry into the aforesaid matters and to make such recommendations as you may deem expedient for the proper control of the business of casinos in the vi AND WE do by these presents give and grant to you or any two or more of you, all the powers conferred on Commissioners by The Commissions of Act for the purpose of making the aforesaid inquiry, and We require that within three months after the date of this commission you do certify to Us, under your hands, or under the hands of any two or more of you, your several proceedings, and your opinion and recommendations on the and this commission shall continue in full although the proceedings thereunder shall not be continued by adjournment from time to time, and you or any two or more of you, may from time to time, if you see fit, without waiting for your full and complete report, certify your several proceedings as the same shall be respectively perfected and We hereby command Government and other persons within the Colony, that they be assistant to you and each of you in the of these presents, and We appoint you Sir Bacon, Knight be the President of this commission, and give and grant to you the powers conferred on such a President by The Commissions of Inquiry Act. IN TESTIMONY WHEREOF WE have caused these Our Letters to be made patent and the Public Seal of Our Colony to be hereunto affixed. WITNESS His Excellency Sir Ralph Francis Grey, Knight Grand Cross of the Most Distinguished Order of Saint Michael and Saint George, Knight Commander in The Royal Victorian Order, Officer of The Most Excellent Order of the British Empire, Governor and in and over the Bahama Islands this Fourth day of March, 1967. BY COMMAND W. SWEETING, Chief Secretary. A 4 Nassau, New Providence, Bahama Islands. of By Order of His Excellency the Governor the time specified in the within Gran written Commission for the execution of the same is hereby extended until the Geor 31st day of October, 1967. Most W. H. SWEETING, Chief Jc Chief to th< June, 1967. the P Si R Jo COMMISSIONS OF INQUIRY ACT (Chapter 180) ADDITION TO PERSONS NAMED IN COMMISSION In exercise of the powers upon the Governor by section 3 of The Commissions of Inquiry Act, I, Ralph Francis Alnwick Grey, Knight Grand Cross of the Most Distinguished Order of Saint Michael and Saint George, Knight Commander in the Royal Victorian Order, Officer of the Most Excellent Order of the British Governor and in and over the Bahama Islands hereby add Joseph Algernon Esquire, Q.C. to the persons named in the Commission issued by me under my hand and the Public Seal on the fourth day of March 1967 to Sir Bacon, Knight Robin Ernest Esquire, Ph.D., Barrister-at-Law, and John Edward O'Connell, Esquire, Detective Superintendent, Metropolitan Police. Given under my hand and the Public Seal this 9th day of March, 1967. (PUBLIC SEAL.) R. F.
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