Failed efforts by the Bermuda Gaming Commission to solve the banking issues that have held up the launch of a casino industry are described in newly released annual reports.

David Burt, the Premier, finally tabled the publicly funded regulator’s reports for 2020 to 2023 in the House of Assembly last Friday, after falling behind in sharing them with taxpayers.

They shed some light on how the commission has tried to get banks to handle casino transactions — a necessity for the sector to get up and running — but even the most recent report, for 2022-23, is out of date.

It describes how amendments were made to the Gaming Act in early 2023 to make the commission’s governance structure similar to the Bermuda Monetary Authority, as this was expected to ease the “facilitation of financial transactions for casino gaming (patron deposits to play, operator profits from gaming, patron winnings)”.

It did not have the desired effect and, according to the senator Arianna Hodgson, the Junior Minister of Finance, more legislative changes are now needed.

She told the Upper House last month that amendments would be made to the Banks and Deposits Companies Act to allow banks to undertake transactions with businesses registered by the BGC.

Ms Hodgson said the Cabinet was told that one of the reasons local banks could not serve casinos was that the risk-reward ratio “did not warrant the submission of an application” to their correspondent bank in the United States.

Clarien’s correspondent bank is Wells Fargo and Butterfield’s is BNY Mellon.

Ms Hodgson said extra costs from the high-risk nature of the business required more staff to oversee statutory requirements, including anti-money-laundering requirements, and banks advised that there was “not enough revenue or potential revenue to discuss the relevant items with the correspondent banks”.

The BGC’s 2022-23 report does not mention the risk-reward ratio in relation to banks.

Instead, it discloses how in 2022 “industry feedback” from potential casino operators focused on Bermuda’s regulatory framework being “very prescriptive and inflexible” and "too rigid and heavy for the scale of both the Bermuda market and the size of the casinos that will be regulated“.

That, along with “banking industry information” about a need to alter the wording in the Gaming Act 2014 to refer to the Minister of Finance, rather than the minister responsible for gaming, led to the tabling of legislative amendments passed by lawmakers in March 2023.

Those changes gave the commission the discretion to “consider waiving certain prescribed regulatory obligations upon application/request by a licensee, accompanied with a rationale for the change”.

The annual report states: “What does this mean for Bermuda being open for business?

“This means that there is flexibility in the statutory framework to permit bespoke procedures for operations which meet the statutory standards or protections, but which also permit controls to be tailored to the size, scale and scope of their operations.

“This moves the needle in facilitating operators to work towards being ready for opening by developing the required internal controls document, one crucial legal necessity.”

The reluctance of banks to get involved with casino gaming is seen as the key reason why the long-promised sector has stalled, despite the Government making it one of four key pillars of its Economic Recovery Plan. A more recent Economic Development Strategy no longer prioritises casinos.

The BGC’s 2022-23 annual report notes: “The matter of the banking [of] the proceeds of land-based casino gaming and the facilitation of gaming transactions remained outstanding for the jurisdiction over the course of this fiscal year.”

It echoes chairwoman Cheryl-Ann Mapp’s introduction to the 2021-22 annual report, in which she wrote: “One matter in which the commission has been lending support is in the securing of correspondent banking facilities for the banking of and transacting of funds related to casino gaming … facilities were not secured this fiscal year.”

The 2021-22 report describes how relevant parties were given a “significant volume of information” about the commission in order for the BGC to be “of assistance in the finalisation of a solution”.

Similarly, in 2020-21, the BGC "provided legislative and regulatory information to a number of parties with the view that the information could add a helpful dimension to the dialogue“ but at the ”end of this fiscal year, the matter remained unresolved“.

The previous year, the commission hired consultant Rose Investment Ltd to help with the banking issue, at a cost of $175,000.

Almost a decade after the BGC was launched, not a single casino has opened. The commission granted a licence to the St Regis in St George’s in October 2022 but the hotel has not opened its planned casino.

A US gaming company developing a casino at the Hamilton Princess & Beach Club pulled out last year.

The Government planned to make casinos exclusively cashless but changed its stance in 2021, with Mr Burt saying it would be up to operators to decide whether to allow cash.

The BGC annual report for 2021-22 reveals that about halfway through the fiscal year, having published technical standards for electronic gaming equipment, the commission “was advised that the use of cash in casino gaming was under significant consideration and that electronic gaming equipment provisioned for the acceptance of cash was being contemplated”.

Mr Burt did not respond directly to questions about casinos and banking.

A spokeswoman said the Government remained “confident that the addition of gaming will assist in diversifying both Bermuda’s economy and tourism product”.

She pointed to the commission, which has cost taxpayers more than $16 million to date, having recently been “streamlined considerably” with a reduction in its operations.

“The commission’s remit involves more than casinos and the commission has been charged with a mandate to examine and explore other revenue sources, while still preparing for the eventual introduction of casinos to Bermuda.”

The spokeswoman insisted that there was “no issue with Bermuda’s gaming regime, which was confirmed with discussions with correspondent banks”.