Govt facing $94m suit
CAGE CARIBBEAN, operator of video lottery terminals (VLTs), is suing the Government for a whopping $94 million.
In a high court writ filed late last month, the company is claiming Government breached its legitimate expectation with regard to the operation of VLTs.
The defendants in the matter, which is down for its first hearing on November 1, are the Comptroller of Customs (first respondent) and the Betting and Gaming Committee (second respondent).
CAGE, represented by attorneys Garth Patterson, QC, and Alana Gore, charges that it invested more than $40 million in infrastructure for the operations based on the strength of approvals granted and promises made by Government over the past five years.
The action follows an amendment to the Betting And Gaming Duties Act earlier this year which mandated slot machines and VLTs to pay the same fees for their operations.
The decision to make the adjustment had been announced by Prime Minister David Thompson last year after the Barbados Association of Slot Machine Operators complained that the VLTs were paying a lot less in fees than slot machine operators.
CAGE is asking for judicial review of several decisions made by Government, including the imposition of a 20 per cent tax.
“The imposition of the 20 per cent tax, or any other tax in excess of three per cent, was contrary to the Government’s stated policy of taxing the revenues from the operations of the Barbados Consolidated Lottery at the maximum rate of three per cent. The claimant (CAGE) had a legitimate expectation of a substantial benefit, namely, that the online lottery operated by it on behalf of the Barbados Cricket Association (BCA) would not be taxed at a rate in excess of three per cent.
“Accordingly, the imposition of a 20 per cent tax or any other tax in excess of three per cent was in breach of the claimant’s (CAGE) legitimate expectations and amounted to an abuse of power,” the writ states.
CAGE is also urging the court to quash a seizure by the Comptroller of Customs of a shipment of VLTs since July 2008.
It further asks that the same ruling be applied to the Betting and Gaming Committee which designated some or all of the VLTs as gaming machines.
In an affidavit, CAGE’s chairman Robert Washington said agreements were reached with Government granting permission for the operation of 2 500 machines, but the Comptroller of Customs had only allowed the operation of 349 VLTs.
There has also been dispute over the categorisation of the VLTs as gaming machines and subsequently paying the same taxes.
Government is being represented in the matter by the office of the Solicitor General.