A businessman who hit the headlines over a rejected cashless gaming deal claims Bermuda has “forfeited an estimated $250 million” in tax revenue over the past decade owing to its failure to launch a casino industry.

John Tartaglia, owner of MM&I Technology Group, told The Royal Gazette: “These opportunity losses do not include the lost stimulation to the Bermuda economy and to job creation.”

Mr Tartaglia’s private technology firm partnered with American company Banyan Gaming more than a decade ago to develop a cashless gaming system for any casinos that might open in Bermuda.

They pitched the technology to the Cabinet and, in 2013, a memorandum of understanding between MM&I and the Government was signed by Shawn Crockwell and Mark Pettingill, then tourism minister and attorney-general, respectively. It put the company in line potentially to net tens of millions of dollars a year if it was awarded a contract.

However, the Bermuda Gaming Commission advised the MOU be terminated because a predecessor company of Banyan’s had been forced to surrender its gaming licences in two states in the US and had been delinquent in its financial reporting. Banyan’s references were found to be “less than glowing”, according to the commission’s lawyer.

Despite that background, David Burt, when he was Opposition leader, described one of the principals of Banyan as a “very esteemed” expert at a public panel discussion on problem gaming.

Mr Tartaglia, a former Bermuda Police Service detective who has not worked in the casino industry, shared a six-page statement with the Gazette on May 24 in response to the recent disclosure by the Cabinet Office of records about the MOU.

He said cash-based systems in casinos were “susceptible to money launderers” and the cashless system developed by MM&I and Banyan mitigated the risks by forcing players to identify themselves and by tracking all their transactions.

Bermuda has struggled to launch its long-promised casino industry and, in autumn 2021, Mr Burt, the Premier and finance minister, said success in developing the sector was “dependent on the willingness and support of correspondent banks to allow for the movement of funds in and out of Bermuda”.

Mr Tartaglia said the concerns of local banks were alleviated after seeing a presentation by MM&I. He mentioned by name Butterfield Bank, where he once worked.

So far, no bank on the island has agreed to handle the proceeds of casino gambling, although Mr Burt has stated that only cashless gaming would be allowed in Bermuda.

Mr Tartaglia wrote: “Because the Bermuda Gaming Commission and the Bermuda Government have not been able to solve the correspondent bank requirements, Bermuda has forfeited an estimated $¼ billion — yes, $250 million — in taxation revenue in the period 2014 to 2024.”

He said the figure was based on revenue estimated in the Government’s 2010 green paper on gaming and “empirical data estimates from other [like] gaming jurisdictions [that] MM&I’s business partners and others operated in”.

Mr Tartaglia said MM&I “foresaw the imminent introduction of the gaming/casino industry in Bermuda” in 2012 and “invested in the development of a ... central gaming control network” with anti-money laundering and know-your-customer built into the system.

He said the full Cabinet under the One Bermuda Alliance administration was impressed with the “initial concept design”, and it then approved the MOU.

Key to the discussions was that the Government “would not pay for anything” and MM&I would underwrite “any and all financial gaming losses”.

Mr Tartaglia said the company expected start-up and implementation costs of between $12 million and $15 million, based on more than 450 gaming machines across the island and software licences.

The company would then get 40 per cent of gross gaming revenue from electronic gaming, with the same share going to the casino operators, and 20 per cent going to the Government in gaming tax.

Mr Tartaglia estimated the Government would have received at least $2 million a month in gaming tax, suggesting MM&I stood to make $4 million a month from the deal.

He added: “All gaming risk was being borne by MM&I, not the Government, not the casinos.”

Butterfield Bank declined to comment.

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