The Irish government yesterday published the General Scheme of the Gambling Control Bill 2013 (the "Scheme"). This 90 page document, which represents the Irish government's current position on the regulation of the gambling sector, provides for the introduction of a comprehensive new unified licensing and regulatory framework for gambling in Ireland.

When enacted, the proposed legislation will also establish a dedicated gambling regulator within the Department of Justice, which has been given the title of "the Office of Gambling Control Ireland" ("OGCI").

The below is an initial overview of the Scheme. It is not intended to be a comprehensive guide to the draft legislation, but rather focuses on points of general interest.

As the Scheme is the precursor to the detailed provisions to be written into the legislation itself, there is an opportunity to provide feedback to the Department of Justice, as part of the consultation process on which the Irish Government has embarked.

A. HEADLINE POINTS

Scope and purpose of the Gambling Control Bill

  1. The new legislation will repeal the Betting Act, 1931 and the Gaming and Lotteries Act, 1956, which set out the current law on betting, gaming, lotteries and amusement arcades/gaming machines in Ireland, and introduce a comprehensive new unified licensing and regulatory framework for gambling in Ireland.
  2. The proposed legislation will also establish a dedicated gambling regulator within the Department of Justice, which has been given the title of "the Office of Gambling Control Ireland" ("OGCI").
  3. When enacted, the Gambling Control Bill will regulate gaming, betting, lotteries, bingo and gaming machines, but will exclude the activities of Horse Racing Ireland and the Irish Greyhound Board (Bord na gCon), the National Lottery, Financial Spread Betting (regulated by the Financial Regulator/Central Bank) and collections under the Street and House to House Collections Act, 1962.
  4. Notably, large scale casinos will not be permitted, and fixed-odds betting terminals ("FOBTs") will also be expressly prohibited.
  5. While the Tote is not yet included in the Scheme, it is intended to include it in due course, following further examination.
  6. Both land-based and remote gambling will be regulated under the new regime. Remote gambling is widely defined in the Scheme to include gambling via the internet, telephone, television, radio, or "any other kind of electronic or other technology for facilitating communication".
  7. The stated purposes of the legislation are fourfold:
    (i) to ensure fairness in the conduct of gambling;
    (ii) to protect vulnerable persons, including children, from the risks to their well-being arising from gambling;
    (iii) to ensure gambling is not used to facilitate or enable criminal or illegal activity; and
    (iv) to ensure consumer protection and choice.
  8. The legislation is intended to be broad-brush and to set out general principles. It is envisaged that the OGCI will develop and issue Codes of Practice and Codes of Conduct setting out detailed guidance on relevant procedures and criteria.
  9. Although the principles governing how the OGCI will calculate the fees which will be charged for processing applications for licences (and the duty to be charged for the licences themselves), will be set out in the Gambling Control Bill, the taxation of gambling activities will be addressed in separate legislation.

Introduction of a comprehensive new licensing and registration regime

  1. The Scheme of the Gambling Control Bill outlines 6 broad categories of licence:
    • Betting licences;
    • Gaming licences (this category will include lottery and bingo licences);
    • Remote gaming and betting licences;
    • Temporary licences;
    • Hybrid/cross-over licences; and
    • Personal licences.
  2. These licences will be issued by the OGCI on behalf of the Minister for Justice. Overall there will be approximately 40 different licence types within these licence categories.
  3. The starting point under the new legislation is that all gambling operators operating or supplying gambling services to Irish players will require an Irish licence. The specific category/type of licences will depend on the nature and size of the gambling operation, and in some instances, a gambling operator will require more than one licence – for example, a land-based bookmaker who also provides remote betting will require a separate licence to cover the remote betting aspect of his/her operation.
  4. While the majority of the proposed new licences will be "service licences", which will be granted to service providers authorising them to provide gambling services in accordance with the licence, 4 types of "personal licences" are proposed, which will need to obtained by certain personnel working the gambling industry.
  5. The Scheme explicitly recognises that cross-over occurs between different types of gambling – for example, it will be possible for bookmakers to obtain a licence to allow limited gaming in betting shops.
  6. Gambling support services located in Ireland will not be required to obtain a licence where the gambling being supported is not made available to Irish players. However, such support services will be required to register with the OGCI.

B. DETAILED ANALYSIS

Betting (Head 17)

  • The Scheme proposes the creation of 10 basic categories of betting licences (Category 1A to 1H licences), including specific types of licences for land-based bookmakers; land-based bookmakers who also offer some remote service; remote betting licences; on-course betting licences; betting exchanges; pool betting; and spread betting licences.
  • While the Tote is not covered in the Scheme, it is intended to include it in due course, following a further review.
  • Land-based bookmakers who also offer betting by remote means will be required to obtain an additional licence.
  • The legislation will contain an absolute prohibition on "fixed odds betting terminals" or "FOBTs". The following definition of FOBTs is proposed: "Electromechanical devices that (i) allow players to bet high stakes at a high frequency on the outcome of various games and events with fixed odds where such games and events are in virtual format and include such games as would be available in the premises of a holder of a licence in the 2R category [casino games] and where the outcome of events is pre-determined by a random number generator, generally located on a server separate to where the terminal is located".
  • The legislation will contain a number of specific offences in relation to FOBTs, and a licence may not be issued in respect of any device that is "capable of becoming" an FOBT.
  • Limited gaming maybe permitted in betting shops, although this will require a separate licence, and cash transactions will not bepermitted in cases of gaming in betting shops – payment is to be by electronic means only, i.e. there must an audit trail.

Casinos (Head 18)

  • It is proposed to cap the number of casino licences which may be in operation at any time at 40 (there are currently 34 "private members' clubs" registered for the purposes of Irish anti-money laundering legislation).
  • The OGCI will be required to establish criteria to ensure a regional spread of casinos, and will be required to publish details of the criteria which will be taken into account when determining whether a locality is appropriate for siting a casino – for example, casinos won't be allowed in close proximity to schools, health care facilities, etc.
  • Only smaller scale casinos will be permitted – a maximum number of 15 tables will be allowed, and at a minimum, a casino must have at least 3 tables.
  • In relation to gaming machines, a standard multiplier of 2 machines to each table will be applied, subject to a maximum of 25 gaming machines in a casino.
  • Appropriate planning permission will be required.
  • It is proposed that casino licences will be 10 year licences, which may be renewed. The proposed permitted hours of operation will be between 11:00 a.m. and 4:30 a.m.
  • The sale of alcohol in premises housing a casino may be permitted, but the Scheme proposes that there be full and complete separation between the area used as a casino and the area licensed for the sale and consumption of alcohol. The Scheme also specifically provides that alcohol shall not be brought into, or consumed in, the area reserved for casino gaming;
  • The following specific issues will be taken into account in the assessment of applications for casino licences:
    • Geographical distribution of licences;
    • Relative population density;
    • Ease of access to the location of the applicant's premises; and
    • Competition issues.

Lotteries (Head 19)

  • Under the Scheme, a lottery licence will not be required for certain categories of lotteries, from which the promoters derive no personal gain, and where prizes fall under certain thresholds. However, there will be a requirement to notify these types of lotteries to the OGCI in advance of them taking place. It is envisaged that the OGCI will prepare a detailed guidance note on the applicable notification requirements.
  • A lottery licence will be required where the level of prize money to be won by the player is determined by the extent to which the selected numbers match those on the player's ticket, or where the numbers required in order to win the top prize are not matched and the prize is held over until the next draw or is added to the general pool of prize money.
  • In order to obtain a lottery licence, it must be demonstrated that the licence has some charitable or philanthropic purpose.
  • There will be different types of lottery licence depending on the level of prizes – the Scheme distinguishes between lotteries with an annual prize fund of up to €120,000; those offering prize money of up to €50,000 per week or €250,000 per month; and those offering prize money exceeding €50,000 per week or €250,000 (though a maximum of €400,000 per month may be paid out in prizes).
  • At a minimum, 25% of the proceeds of ticket sales in a licensed lottery must be allocated to charitable or philanthropic causes.
  • The Scheme proposes the introduction of separate categories of licences for lotteries operating in conjunction with sales or marketing promotions and for scratch cards.

Bingo (Head 20)

  • The Scheme proposes that lotteries and bingo will be separately regulated going forward – currently, bingo is considered to be a type of lottery game, and therefore subject to the same rules applying to lotteries.
  • The following definition of "bingo" is proposed: "A game where players mark off numbers on cards or screens […] as the numbers are drawn randomly, the winner being the first to mark off all the numbers on the card or screen that are required to win, and shall include any versions of that game, by whatever name called, including playing the game by electronic means or remote communication".
  • The rule that bingo must always be for charitable or philanthropic purposes is being relaxed, but a link to local interests will be required in most instances.
  • The legislation will include caps on the amount of bingo proceeds which can be allocated to overheads, and there will be minimum percentages which can be allocated to prize money.
  • A separate category of licence will be required for licensing remote bingo.

Gaming and Amusement Arcades (Head 17 (6))

  • There will be 2 separate categories of licence for gaming arcades and amusement arcades: a "gaming arcade licence" and an "amusement arcade licence";
  • Amusement machines may be provided in a premises which is operated under a gaming arcade licence, but where an arcade contains both amusement machines and gaming machines, then a clear physical separation between the two types of machine will be required, and there should be no connecting doors or passageways;
  • Premises containing 4 amusement machines or less will not require an amusement arcade licence.

Miscellaneous / Short Term Licences (Head 16 and Schedule 1)

  • Shopping centres and catering outlets may be able to apply for licences to provide a limited number of gaming machines to customers, but these types of licence will be subject to restrictions on opening hours, the level of permitted stakes and the number and type of machines that can be provided;
  • It is also proposed to introduce a series of short term licences, including:
    • One month gaming licences for cruise ships docked in Irish waters or harbours;
    • One year licences for passenger ferries operating on routes approved by the Irish Department of Transport;
    • One-week licences for professional gaming tournaments – applicants must be admitted to an OGCI approved "whitelist" of organisers to be eligible to apply for this type of licence;
    • Licences for charity events, such as "poker nights" or "race nights", organised by local clubs or charities;
    • Licences for "mobile gaming facilities" at funfairs, circuses and entertainment troupes, and licences for "short term gaming facilities" at summer festivals.

Licence Application Procedures and Requirements

The Scheme sets out in broad detail the procedure which will apply to licence applications, but it is envisaged that more detailed guidelines will be published by the OGCI. The following points are worth noting:

  • It will be necessary to publish licence applications in one or more local or national newspapers, depending on the licence category/type.
  • The Irish police (An Garda Siochana) will be a third party to all licence applications, and will be entitled to submit comments on, or objections to, licence applications.
  • Applicants will be required to demonstrate that any premises being licensed has the appropriate planning permission, and no licence will be issued unless full and final planning permission has been secured.
  • Applicants will be required to declare whether they have any convictions. Having a conviction will not, of itself, constitute sufficient grounds for refusing an application, but may be relevant to the decision to accept an application where the circumstances of the offence may represent a risk to public safety or integrity.
  • Applicants will be required to disclose conflicts of interest.
  • As part of the licence application process, OGCI will be able to decide to hold a hearing to establish/clarify matters of fact, or to hear, examine and evaluate data of a technical or scientific nature.
  • The validity of applications will be determined by "assessors" who report on the application to the Chief Officer, or other person authorised by the Minister for Justice, who shall make the ultimate decision in relation to an application.
  • Applications will be assessed by reference to pre-established, published criteria, which will take account of:
    • Policy directives issued by the Minster;
    • The primary purposes of the legislation;
    • Any submissions by the police (An Garda Siochana) in relation to the application;
    • Any views of the planning authority;
    • Any applicable competition law requirements; and
    • Any views expressed by third parties.
  • Applicants will have a right of appeal in relation to decisions of the OGCI: appeals against a decision that an application is invalid will be addressed to the Chief Officer of the OGCI, and appeals against decisions.
  • To grant/not grant a licence (or to attach certain terms and conditions to a licence) will be made to the District Court. No further appeal will be possible, except on a point of law of exceptional public interest to the High Court.
  • Decisions in relation to applications to be published to allow third party appeals.
  • The OGCI shall have power to attach terms and conditions to licences, and the validity of a licence will depend on compliance with those terms and conditions.
  • The Scheme outlines the maximum duration of each category/type of licence (see Schedule 1), though it will be open to OGCI to grant licences for shorter periods in certain scenarios. There is no automatic renewal process – when a licence expires, a new application must be filed.
  • Schedule 1 to the Scheme also sets out details of permitted opening hours under each type of licence, where applicable.
  • The Scheme sets out principles in relation to how OGCI will calculate the fees which may be charged for processing applications for licences / registration, and for the licence / registration itself, to be approved by Minister. It is envisaged that the schedule of fees will be published.
  • OGCI may require licence holders to lodge security in an Irish bank – security may be called upon by the OGCI for the purpose of paying fines / financial penalties for breaching the legislation.

Enforcement and Compliance and International Cooperation

  • As well as dealing with licence applications, the OGCI will also act, in effect, as an "inspectorate" for all gambling regulated under the Gambling Control Bill.
  • OGCI officers will have full powers to search, seize documents, etc., and the OGCI will be able to seek Court orders directing service providers, financial institutions, advertising services, etc, not to assist unlicensed or non-compliant online gaming websites offering their services to Irish customers.
  • The legislation provides for cooperation between the OGCI and other bodies, including the Irish police (An Garda Siochana), the Revenue Commissioners, the Private Security Authority, as well as other regulators outside Ireland. Notably, it is envisaged that the OGCI may consult with its counterparts in other jurisdictions, with a view to entering into memoranda of understanding, which will allow the regulators to exchange information on licence holders, including any records in relation to a licence holders' history in the gambling industry and any previous convictions.
  • While the legislation will contain an array of offences, prosecutable before the Irish criminal courts (and punishable by substantial fines or in some cases, imprisonment), the legislation will include procedures by which the OGCI can deal with, and itself impose penalties, for less serious regulatory "infringements" (e.g. oral warnings and licence suspensions), although a mechanism will be provided for appealing any such penalties to the District Court.

Player Protection and Safeguards

The Scheme contains a number of safeguards, designed to ensure that the new regulatory regime achieves its stated protection purposes of ensuring fairness in gambling etc., as outlined above, and to ensure the bona fides and viability of licensees.

In addition to imposing a series of reporting requirements and responsible gaming obligations on gambling operators (and requiring operators to contribute to a "Social Gambling Fund" through a levy), the following proposed provisions of the legislation are worth noting:

  • In addition to the absolute prohibition of FOBTs, it will be open to the Minister to prohibit or restrict certain games, or classes of game, or a particular machine or piece of equipment, where justified by the primary purposes of the legislation, or by public policy generally. The Minister will also have powers to deal with other, as yet, "unknown devices or games", if they are harmful.
  • It will be a licence condition that all staff are properly trained. Key personnel working in the gambling industry will be required to have "personal licences".
  • A centrally controlled 'self-exclusion' system will be established.
  • The licence application procedure will include detailed checks on the financial and personal background of licence applicants.
  • There will be a requirement to certify and calibrate gambling equipment, and suppliers of equipment and services will be required to register with the OGCI.
  • It is proposed that the OGCI will be able to direct that certain machines or games can only be operated/played via "player cards". Where this requirement applies, a customer will be unable to access the game without having first obtained a "player card". In order to safeguard the interests of the customer, he/she will only be permitted to purchase one player card at a time and will be restricted to buying five player cards in one day. A similar scheme will apply for remote games.
  • The legislation will include strict requirements in relation to advertising, including restrictions on advertising before the commonly accepted "watershed" time (usually 9 pm). It will also include certain restrictions on promotions, discounts and inducements in relation to gambling services.