Ireland’s financial woes have featured in the international press for a number of years. The Irish Government is betting on a brighter financial future with its new gambling legislation. Proposed on July 15 and likely to become law in the year ahead, the new legislation will seek to regulate land-based and online gambling, while also protecting vulnerable adults and young people. Here are some of the details:
|Dr. Max Barrett|
• Scope of new law: The new legislation will replace the current Irish law on betting, gaming and amusements and will allow for the establishment of up to 40 casinos in Ireland, subject to stringent size, location and other requirements. The legislation will accommodate current technology but will be technology neutral to allow for un-envisioned technological developments. A further significant aspect is that gambling contracts will, following the enactment of the proposed legislation, be enforceable under Irish law.
• Licensing requirements: Notably, the intention is that the legislation will apply in Ireland and also to persons providing services from abroad to Irish-resident customers. This would require online providers to obtain a licence or other authorisation from the Irish authorities if the provider has Irish-resident customers. Any person seeking a licence will be subject to police and other suitability checks.
•Taxation: The new legislation will not address taxation. However, a report published by the Irish Government in 2010 recognises that there would be little point in having a comprehensive regulatory framework that allows for gambling while also maintaining a tax regime that disincentives companies from establishing in, or selling into, Ireland. Thus a commercially sensitive tax regime can reasonably be anticipated, though it can also be expected that the Irish Government will require industry to pay for any adverse social consequences associated with increased gambling.
• Gambling Regulator:It is proposed that the new licensing and supervision regime will be policed by the Office for Gambling Control, Ireland (OGCI), in effect a gambling inspectorate with the usual licensing and supervisory powers that one would associate with such an entity. There are perhaps two main reasons for establishing the OGCI. The first is to have a “one-stop expert shop” when it comes to operating and policing the new gambling regime. The second is that gambling has the potential to lead to adverse consequences for a minority of persons and thus active state intervention by a dedicated regulator is considered appropriate. It is intended that the OGCI will be self-financing, principally from licence fees.
• Social provisions:A Social Gambling Fund to assist with treatment services (funded by a levy on operators). In addition, a new complaints procedure for consumers will be established and new arrangements to assist consumers seeking compensation from licence-holders will be put in place. Licence-holders will be required to maintain adequate financial reserves to cover customer entitlements. Although the proposed text of the legislation has yet to be presented to the Irish Parliament, it remains to be seen whether the Irish Government, having established a liberal gambling regime that should yield a healthy tax dividend, will impose a statutory obligation on itself as regards funding assistance.
• Possible weaknesses: That Ireland has elected to modernise its gambling legislation is to be welcomed. However, there may be some weaknesses in the proposed legislation. To start, much of the detailed legislation in this area will take the form of regulations adopted pursuant to the main legislation. It is to be hoped that these regulations will not be excessively bureaucratic, though there is no reason to believe that they will be.
Another potential issue is that the legislation has the twin aims of facilitating a vibrant gambling sector while at the same time protecting the vulnerable and the young. It remains to be seen whether both objectives prove attainable.
Finally, although a favorable tax regime can reasonably be anticipated, it would perhaps have been preferable if the taxation dimension had also been addressed in the proposed new gambling legislation.
Despite these possible weaknesses in the proposed legislation, Ireland has a well-deserved reputation as a hub for international commerce and there is every reason to expect that the legislation will succeed in establishing a vibrant gambling sector in Ireland while also addressing any associated societal issues arising.
• Next step: It can reasonably be anticipated that the proposed legislation will become law in late 2013 or, more likely, during 2014. The odds are good that the legislation will be a success and that gambling providers in Ireland can anticipate a profitable future.