Heavy regulation, perception of a lack of independence for gaming authorities and failure by Government to open-up the banking sector enough have put the future of Bermuda hosting casinos in doubt, a leading business source has said.

The comments come in the wake of a US firm dramatically pulling out of a planned gambling hub at the Hamilton Princess & Beach Club at the cost of an estimated 100 new jobs.

The well placed source said Government’s relationship with the Bermuda Gaming Commission was putting off US investors and banks becoming involved in setting up casinos on the island.

Century Casinos cited the “current legislative framework” as a reason it had suddenly abandoned the Hamilton Princess casino project after eight years involvement, as revealed by The Royal Gazette this week

The source said banks on the island were unwilling to handle gaming proceeds as they could not secure a correspondent foreign bank and the regulatory regime raised doubts about whether profits could be made.

The source said: “There is a problem with the regulatory environment as Century Casinos alluded to.

“The US banks want gaming to be independent, and the BGC looks anything but.

“A major disincentive is that Bermuda gaming regulation just does not look independent.

“Regulations on how you would run a casino here all appear geared to those that would operate in a much larger jurisdiction, like California or Nevada, and for much bigger casinos than the teeny-tiny ones given licences here.”

However, a Government spokeswoman insisted that the BGC was independent, adding: “Any suggestion of influence over the commission is patently false.”

The business source added: “Even if a bank was willing to be involved, it is not clear they could make money.

“Of the four main licensed banks, none of them are currently willing or able to process gaming volumes.

“There is no willing correspondent bank at the moment - no correspondent bank is willing to touch Bermuda gaming money.

“This has been dragging on for a number of years now. Nothing has changed in this area since 2017.”

With the collapse of the project drawing international attention, Craig Cannonier, One Bermuda Alliance tourism spokesman, has called on David Burt to hold urgent talks with licensees, banks and regulators to deal with the situation.

Following the decision by Century Casinos to walk away from the project, Mr Cannonier said the island has a “big problem” establishing a job generating gaming industry unless the Government acts to assure investors.

Mr Cannonier told The Royal Gazette: “The Government is saying it is up to the licence holders to get things done, but how can they is if banks are unwilling to take proceeds from gaming?

“It is up to Government to satisfy that mandate by the bank - you can’t blame the licensee.

“I do know that at present proceeds of gaming cannot be accepted by banks.”

He said: “All the parties, led by the Government, as well as the banks, licensees, affiliates and regulators, need to sit down and sort this out. The Government needs to reconcile this issue with negotiations.

“Century pulled out because they did not see the situation being resolved.

“If they say they don’t see a resolution in the foreseeable future, then we have a big problem.

“The Government can get rid of commissioners.”

Geoff Scott, chief executive officer of the Bermuda Bankers Association, said some financial institutions on the island had been involved in the development of potential gaming hubs.

Mr Scott told The Royal Gazette: “Bermuda Bankers Association members have been working for many years with various potential casino licensees and operators.

“Banking industry participants support a well-regulated and socially responsible approach to the gambling industry.”

The Government spokeswoman said: “The gaming commission operates independently, administering the provisions of the relevant legislation and those persons appointed to the commission, by law, are required to have specified expertise and experience in various fields.

“The commission advises the minister responsible for gaming, and in some cases, the minister must act in accordance with that advice.

“In other limited instances, the minister must consult with the commission on certain matters.

“There is no provision either in law or in practice that suggests any role for the Government in the operation of the commission.

“Any suggestion of influence over the commission is patently false.”

The Hamilton Princess & Beach Club hotel said it had also ceased searching for a new operator until the Bermuda Gaming Commission is able to provide a “viable path forward.”

In 2017, backers of the Princess casino predicted that it could create up to 100 jobs.

The collapse of the project is a blow for the Government, which made casinos one of its four key areas of economic stimulus.

Despite being given a licence, there is also still no date for the opening a casino at the St Regis.

Progress in getting the industry up and running has been beset by delays since legislation was passed nine years ago allowing for a maximum of four casinos on the island.

The Premier predicted that the island’s first casino would open by the end of 2021.

Gaming has come under the remit of several ministers. Jamahl Simmons first held the brief as Minister of Economic Development and Tourism, followed by Curtis Dickinson, the former Minister of Finance, who took over responsibility in November 2018.

In 2020, Mr Burt took gaming on as minister responsible for economic development in Bermuda, a portfolio now held by Jason Hayward.

Charmaine Smith, BGC chief executive, said: “The commission has nothing further to add to these circumstances.“

• UPDATE: This story has been updated to include a comment from the Bermuda Gaming Commission.