On 15 July 2013, Alan Shatter TD, Minister for Justice, Equality and Defence, announced government approval for the General Scheme of the Gambling Control Bill 2013 (the “Scheme”). This Scheme is a preliminary step towards legislation, which if enacted will provide a significant overhaul of the law in this area and a comprehensive new licensing and regulatory framework for gambling, both land-based and online. As it stands, the Scheme has no legal effect, but provides a good indication of the Government’s current thinking.
The existing legislation in the area is widely recognised as being out dated and ineffective in dealing with the recent developments in the industry. Currently, the Betting Act 1931 applies to land-based bookmaker shops only and the Gaming and Lotteries Act 1956 is also recognised as being archaic. If enacted, the proposed legislation would regulate most betting, gaming, bingo and lotteries in Ireland, other than limited specified exceptions, including the National Lottery and gambling under the auspices of Horse Racing Ireland or Bord na gCon (the Irish Greyhound Board).
2. A complete modernisation
The Scheme deals with both land-based services, such as bookmakers’ premises and gaming arcades, as well as gambling via “remote” services. Remote gambling is defined as gambling via the Internet, telephone, television, radio or “any other kind of electronic or other technology for facilitating communication”. This helps to bring the law up-to-date with the realities of modern gambling and betting.
The proposed new legislation would apply to all forms of gambling made available in the State. It would also apply to those companies which make gambling services available through services located in Ireland, even where these services are not available to Irish players.
3. Who will be in charge of enforcement?
The Scheme establishes the Office for Gambling Control Ireland (“OGCI”) as the regulator responsible for controlling gambling in Ireland. It would act, under the auspices of the Minister for Justice, as the licensing body for the 43 categories of licences and the two heads of registration set out in the Scheme. The OGCI would be financed by fees from licence holders and applicants and would also have powers to prepare Codes of Practice and Conduct setting out expected industry standards. It will also be required to submit an annual report on its operations to the Houses of Oireachtas and the Minister.
3.1. Investigative Hearings
The OGCI may conduct hearings to examine or evaluate technical or scientific data or matters of fact in relation to applications for licences. Such hearings would generally be private although may be held partially or wholly in public at the discretion of the Chief Officer of the OGCI where it would be in the interests of fair procedure or would enhance the integrity of the OGCI and its procedures. Commercial sensitivity and confidentiality would be taken into account in any decision to hold a public hearing.
3.2. Entry and Search Powers
In relation to enforcement, the OGCI would be given very broad powers of search and inspection. Authorised officers appointed by the OGCI may enter, inspect, examine and search any place where they have reasonable cause to believe that a gambling service is being provided.
The OGCI will also create an annual programme of scheduled inspections of premises and facilities used to provide, or used in connection with, licenced and registered gambling services. The annual programme would be based on an assessment of relevant factors, including the scale and complexity of the license service, turnover and compliance record. A report will be drawn up and issued to the relevant licence holder following an inspection setting out the findings and any action which must be taken as a result of a finding of non-compliance.
4. How do you apply for a licence?
The Scheme requires detailed information to be included in each application for a licence. This includes, amongst other things, information relating to the games or services to be provided, the equipment to be made available for use by customers, details of the number and type of equipment, the level of stakes and payments of machines, calibration certificates and proposed staffing levels. An applicant must also supply evidence that its premises are in compliance with the Planning Acts and no licence will be issued until planning permission is secured.
Further information about the applicant, such as their previous history as a holder of a betting or gaming licence, must be submitted. If the application is being made on behalf of a company, details including the company’s structure, registration and most recent audited accounts must also be provided.
Applications must then be advertised in a number of local and/or national newspapers (depending on the type of licence being applied for).Gardaí (the Irish police force) will be a third party to all applications with the power to comment on or object to any application.
An application may be rejected where the required information is not supplied, where shortcomings exist in relation to finance, tax or regulatory matters, or where other relevant information gives rise to sufficient concern about the suitability of the applicant.
Appeals against a decision to grant or not to grant a licence will be to the District Court. There will be no further right to appeal other than on a point of law of exceptional public interest to the High Court.
5. What are the implications for Private Members Clubs or Casinos?
The Scheme also deals directly with casino regulation. Whilst there has been a proliferation of private members clubs providing casino-like services to club members, the legal basis upon which these services are provided is unclear. The proposed legislation seeks to eradicate this position by specifically legislating for casinos and casino games.
It sets out a maximum limit of 40 casino licences that can be in operation at any one time in Ireland and limits the number of tables in casinos to a maximum of 15 and gaming machines to 25. The OGCI will establish criteria on the distribution of casinos geographically, nationally and regionally, to ensure reasonable access and choice for consumers. Any decision regarding a casino licence application will take into account the geographical distribution of applications, the relative population density, the ease of access to the location of the applicant and competition issues. Alcohol may be sold (with a valid liquor licence) in casino premises on the condition there is a full and complete separation between the area used as a casino and the area where the sale and consumption of alcohol is licenced. Furthermore, alcohol cannot be consumed or brought into the area reserved for gaming.
The OGCI may also make a condition of land-based casinos that persons attending may be required to enter their details in a database maintained by the licensee. The person’s identity may also be verified prior to admittance.
These provisions in practice rule out the introduction of ‘super-casinos’ in Ireland such as the proposed development at Two-Mile Borris, Co Tipperary.
6. Betting Implications
Currently, an applicant may apply for one of the ten types of betting licences at Schedule 1 (Category 1A to 1K) of the Scheme. These include licences for land based bookmakers (including those with partial remote betting), remote betting, on-course betting, betting exchanges, pool betting and spread betting.
Existing licences held by bookmakers will continue to be valid until they fall for renewal under the new legislation. At that point, they will be required to submit fresh applications in accordance with the new procedure.
The Scheme also explicitly prohibits fixed odds betting terminals (“FOBTs”). The proposed definition of FOBT is the following:
“Electromechanical devices that allow players to bet high stakes, at high frequency, on the outcome of various games and events with fixed odds, where the games are in virtual format…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 Scheme sets out offences for the supply, maintenance and repair of FOBTs. This outright ban reflects the level of Government concern as to the harmful effects of such terminals.
Under the Scheme, a “lottery” is defined as:
“(a) a game or activity for raising money,
(b) in which tickets are sold and a draw is held for certain prizes,
(c) where the draw is a process that relies on the chance selection of numbers or other symbols or marks (or combinations thereof),
(d) the level of the prize won by the ticket holder being determined by the extent to which the selected numbers, etc. match those on the player’s ticket, and
(e) where, in cases where the numbers, etc. required in order to win the top prize are not matched on any ticket or record held by a player, the top prize may, in accordance with the terms of the licence, either
- be held over until the next occasion when a draw is held, and may on that or those occasion(s) be increased, or
- some or all of it may be added to the general pool of prizes or prize-money and distributed amongst all remaining winners, provided the limits on prize funds as specified in this Act are not exceeded.”
Certain lotteries will not require licences when specific prize fund conditions are fulfilled and where the promoter does not derive personal gain from the lottery. Such lotteries however must still be notified to the OGCI and the amount retained by the promoters for overheads and the amount assigned to any other project or charity must be disclosed.
Otherwise, different categories of lottery licences will be introduced depending on the size of the prizes they offer. To qualify for the licence, a link to a charitable or philanthropic purpose must be demonstrated and a minimum of 25% of the proceeds of sales must go towards this purpose.
8. What safeguards are in place?
A final important note is the proposed creation of a fund, called the Social Fund, to promote socially responsible gambling and to assist in counteracting the ill-effects of irresponsible gambling for society, as well as for persons affected by irresponsible gambling. This shall be funded by contributions from licence holders and the level of contribution shall be fixed by the Minister for Justice as a percentage of the turnover generated.
The main ways in which this fund will be used are highlighted in the Scheme as including public education and awareness-raising programmes, the commissioning or undertaking of research, and assistance in establishing and operating treatment programmes for individuals affected by irresponsible gambling.
Due to the rapid evolution of the gaming and betting sector, one of the core imperatives for any new legislation introduced is that of sufficient flexibility to ensure measures can be taken to regulate new technical innovations and developments as they happen. The Scheme seems to provide this flexibility in several provisions by including powers to prohibit or restrict certain games or equipment if they are deemed contrary to the “primary purposes” of the legislation. These are broadly stated as being the protection of vulnerable persons and of consumer choice, the promotion of fairness in gambling and the avoidance of criminal or illegal activity.
The proposed legislation also has the clear aim of creating legal certainty and protecting consumers. Again the Scheme appears to have provided sufficient safeguards in this regard by dealing with previously unregulated areas, creating the Social Fund, placing controls on advertising, sponsorship and promotion and establishing new complaints procedures. Overall, the Scheme is a comprehensive starting point for the introduction of a new regulatory system.