By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Free National Movement deputy leader yesterday said that he was concerned about the expansion of web shops ahead of the issuance of licences, suggesting that they were being set up to be “too big to fail” and must have government tacit approval.

East Grand Bahama MP K Peter Turnquest told Tribune Business: “Quite frankly I’m concerned by the impression and precedent it sets for future enforcement action in this proposed industry and business licence functions in general. Overall many have raised eyebrows over the manner in which the industry partners have been allowed to carry on with impunity without licence or official sanction or regulations.

“Of particular concern are the very public programmes sponsored by the industry that seem to be designed to influence the general public sentiment as a way to pressure government for a favourable result, and the involvement of children through donations to schools as part of that campaign.”

During the opening of Island Luck’s Village Road location last week its CEO, Sebas Bastian, noted that the facility was lawful and registered with the Gaming Board, although he acknowledged that the company was assuming all of the risk given that licences have not yet been granted.

Mr Turnquest said: “My impression of the terms of the transitional arrangement was that government and industry would hold steady while licence applications are reviewed. It would seem these expansions are inconsistent with that position and leads to the conclusion that they are being set up to be ‘too big to fail’ and must have government tacit approval.

“With regards to the quasi banking operations, the legislation is intended to prohibit and control this unregulated activity but to date, we can assume that transfers and loan services are still being offered. Of particular note is the competitive nature of these services, which if the quoted size of the industry is to be believed, must be having an effect.

“Has the potential connection between gambling and the huge mortgage loan arrears been analysed? If households are being deprived resources because they are being gambled away, it follows that there would be less money for mortgage payments and other obligations. If this simple example follows through, then it would be reasonable to assume that the web shops are having a negative effect on the formal banking sector at present.”

Mr Turnquest said that the question of whether web shops and the commercial banks can co-exist will not arise until the industry is first able to convince the banks to accept their deposits. “If they are not able to clear that first hurdle, it follows that we will continue to have a formal regulated and informal unregulated financial service industry which will not be sustainable in the end,” said Mr Turnquest.

Last month, Mr Bastian launched OWN Bahamas, a programme created to promote economic development and designed to support the acceleration of the Bahamian economy and which offers grant funding to people lacking the capital to start a business independently.

At the time he said: “OWN wants to be that bridge between people’s goals and dreams and providing the opportunity to achieve just that. We want to basically really own this country, and the only way we can do that is if we empower young Bahamians, encourage them to think outside the box, expand their investment appetite beyond the conventional types of businesses that we see in The Bahamas like our beauty salons, car wash and 99 cent breakfast stands.”