FTC applies for financial penalties to be levied on Supreme Ventures

Competition regulator the Fair Trading Commission (FTC) has asked the Supreme Court to impose financial penalties on gaming company Supreme Ventures Limited (SVL) and a subsidiary for allegedly abusing their dominant position in the lottery market.

It's the latest move by the regulator against the company which it concluded, in a controversial 2022 report, "engaged in abusive conduct which restricts the expansion of competitors and the entry of potential competitors in a manner that has had or is having the effect of lessening competition substantially in the market”. 

SVL and Prime Sports (Jamaica) Limited challenged the report but the Supreme Court upheld the findings in a ruling in May 2023.

They are appealing that decision. 

On March 4, 2024, the FTC filed a claim in the Commercial Division of the Supreme Court seeking several declarations against the SVL and Prime Sports. 

A hearing of the claim was held on Monday but the matter was adjourned to October 24. 

Last week, SVL applied for it to be removed from the FTC's claim while Prime Sports has sought to have the matter halted until the appeal against the 2023 court ruling is decided. 

The regulator wants the court to declare that Supreme Ventures and Prime Sports, individually or as interconnected entities, occupy a dominant position in the lottery market and that their conduct "has the effect of restricting the entry of potential competitors."

That declaration would also respond to FTC's assertion that SVL and Prime Sports have imposed "unfair purchase or selling prices or other uncompetitive practices, and/or limiting the production of services to the prejudice of consumers and/or making the conclusion of agreements subject to acceptance by other parties of supplementary obligations which by their nature, or according to commercial usage, have no connection with the subject of such agreements, thereby lessening competition substantially in the lottery market".  

The FTC is also seeking a declaration that the two companies "have contravened the obligations or prohibitions" under the part three of the Fair Competition Act.

That section deals with the control of uncompetitive practice. 

Regarding the financial penalties, the commission wants the court to grant an order for the two companies to pay to the Government "a pecuniary penalty not exceeding $5 million for each breach of the provisions of law.” 

The watchdog also wants an order to restrain SVL and Prime Sports or any of its agents "from continuing to engage in any conduct that is in breach of the Fair Competition Act." 

FTC's executive director David Miller filed an affidavit to support the commission's requests. 

The FTC is being represented by Emile Leiba and Samantha Grant of the law firm DunnCox, while SVL and Prime Sports are represented by Hylton Powell. 

The FTC's 2022 investigation report highlighted two major challenges with the conduct of SVL and its subsidiary arising from the efforts of Mahoe Gaming Enterprises and Goodwill Gaming Enterprises to enter the lottery market. 

"The first was that there was on the part of Supreme Ventures a significant change in approved pay-outs prior to and subsequently to the entry of other lottery operators into the market, i.e. Mahoe and Goodwill in February 2021. The second was significant changes in terms and conditions under which retailers were engaged," the Supreme Court judgment outlined. 

In their defence, SVL and Prime Sports argued the FTC "did not allow them to be heard or to comment on the draft report before arriving at its conclusions, issuing and publishing a final report". 

They also contended that some of the findings in the report "are contrary to and or are not supported by evidence". 

The companies also complained that they were not provided an opportunity to respond to the part of the investigation dealing with the 50:1 odds pricing strategy. 

But the court was not convinced that the issues raised were fatal to the FTC's report. 

"I find that no statutory duty was breached in not allowing the appellants to be heard before the report was prepared and similarly no legitimate expectation created and therefore procedural justice was not breached," Justice Stephane Haisley-Jackson. 

The court also noted that the companies were advised of aspects of the investigation and provided responses to questions submitted by the FTC, although there were no formal hearings.

- Jovan Johnson

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