A 2001 V.I. law naming two specific companies authorized as "master service providers" for online gambling will be rescinded, and the two companies will compete with all comers for a pool of master service provider licenses, if a bill approved in committee Tuesday becomes law.
Master service providers build the Internet infrastructure, the servers and so forth, to host any number of online gambling companies.
The bill proposed by Sen. Nereida "Nellie" Rivera-O’Reilly would also make it a felony to tamper with online gaming so that the game does not pay out as described. It creates a $20,000 annual fee for master service providers to be devoted to compulsive gambling education and treatment and reallocates the revenue it already receives, dividing it between the Casino Control Commission and its Division of Gaming Enforcement.
As written, the bill would allow up to five master service provider licenses, with another three reserved for hotels. Hotels would be licensed as master service providers, contracting directly with online gambling company to provide services like online poker, but not hosting other gaming companies. [Bill 30-0333]
O’Reilly said the intent of the bill is to create greater transparency and a more level playing field for companies hoping to compete in this area. "I believe the previous legislation created a monopoly and superseded the Casino Control Commission," she said.
Casino Control Commission Chairwoman Violet Ann Golden testified that the commission supports the bill. While existing law named two companies as master service providers, it also gave the Casino Control Commission authority over issuing master service provider licenses, Golden said.
Sen. Clifford Graham asked if eliminating the vested right to the license could be challenged in court.
Golden said it could, but added that the license "comes with privilege not right." In so far as the law conveyed a property right, it was invalid, because "the Supreme Court has ruled against conveying property rights to companies in statute," Golden said.
She recommended the number of licenses be reduced to three.
Todd Newman, an attorney for St. Croix Internet Group, one of the two companies named in the current statute, and Michael Tobin, chief executive officer of Continent 8, the successor company to the other named company, both testified against the bill, arguing that the change would signal "uncertainty" and scare away investors. "The world must be assured the rules will not be changed halfway through the game," Tobin said.
Voting to send the bill out of committee for further consideration were O’Reilly, Sens. Terrence "Positive" Nelson and Clifford Graham. Sen. Myron Jackson voted no. Sens. Donald Cole and Clarence Payne were absent.
The committee also approved a bill from Sen. Sammuel Sanes to reprogram $200,000 of funding for the Durant Tower construction in Frederiksted and devote $150,000 to upgrade the La Reine Fish Market and $50,000 to renovate the Estate Profit Recreation Center. [Bill 30-0343]
According to testimony from Public Works Commissioner Darryl Smalls, there is already $650,000 in bond funding to rebuild the La Reine Fish Market, but bids came in well above that figure, so this new $150,000 will joint the existing money and pay for the entire project.
An amendment from Sanes increased the funding for La Reine to $175,000, decreasing the funding for work in Estate Profit to $25,000. Voting to approve the bill as amended were Buckley, Nelson, O’Reilly and Graham. Cole, Jackson and Payne were absent.