Opinion: Ireland's Gambling Future

Ireland is partly staking its future on new gambling legislation. On 15 July, a Government Minister announced a complete overhaul of Ireland’s antiquated gambling laws. The proposed legislation is intended to facilitate land-based and online gambling. It will make gambling contracts enforceable before the Irish courts. It will also seek to protect vulnerable and young people from the ill-effects of gambling.

Online Gambling

The proposed legislation will replace Ireland’s current betting, gaming and amusement laws. Significantly it will facilitate online gambling in a ‘technology-neutral’ manner so that new technologies should not require further legislation before they can be implemented. Of particular interest to online-gambling providers is that the proposed legislation will require anyone providing gambling services to customers in Ireland to obtain a licence from a new Irish gambling regulator, the Office for Gambling Control, Ireland (OGCI). Prospective licence-holders will be subject to police and other checks.

New Gambling Regulator

Not a lot is yet known as to how the OGCI will be constituted or operated. It will sit within the executive and function in effect as a gambling inspectorate with the usual powers accorded a regulator. There appear to be two reasons behind its establishment. First, to provide a one-stop expert regulator for the gambling industry. Second, to ensure vigorous regulation of an area of commerce that can have adverse consequences for the few. It is intended that the OGCI will be self-financing, largely through licensing fees and other charges imposed on industry players.

Tax

Curiously perhaps, the proposed gambling legislation will not make provision as regards taxation. However, in a 2010 Report, the Irish Department of Justice and Law Reform acknowledged that ‘There would appear to be little point in developing and maintaining a comprehensive regulatory framework for gambling if through its taxation policy a State puts companies at a disincentive from establishing themselves in or selling into the market.’ In short, a favourable Irish tax regime can reasonably be anticipated.

Social Protection

In announcing the proposed legislation, the Minister highlighted its social dimension. He referred, among other matters, to the introduction of age restrictions, controls on advertising promotions and sponsorship, the establishment of a new Social Gambling Fund to assist with treatment services, a new complaints procedure for consumers, and new arrangements to assist consumers seeking compensation from licence-holders. Licensees will be required to maintain adequate financial reserves to cover customer entitlements. As the proposed legislation seeks to facilitate a dynamic Irish gambling sector and so provide a tax harvest for the Irish Government, it remains to be seen whether the Irish Government will subject itself to a statutory obligation as regards funding social provision for those adversely affected by gambling.

Possible Weaknesses

Any reform of Ireland’s dated gambling regime is to be welcomed, not least so that gambling is at last recognised by statute as a legitimate form of entertainment and not a form of vice. Even so, there may be some weaknesses in the proposed legislation. For example, it makes no provision as regards taxation. Its laudable dual objectives of fostering gambling, yet fully protecting the vulnerable, will be challenging to realise in practice. Moreover, there is the potential for the regime to become excessively bureaucratic, albeit no reason at this time for believing that it will. Despite these possible criticisms, Ireland already enjoys a deserved reputation as a hub for international commerce and, notwithstanding past failings in the financial services sector, a continuing history of striking the right balance between business needs and social protection.

From Proposal to Law

Following the announcement of 15 July, it is anticipated that the proposed legislation may be tabled before the Irish Parliament later this year and become law in late-2013, though a betting man would favour a 2014 date. Whenever enacted, the proposed legislation should establish a well-regulated regime that offers potentially lucrative opportunities for gambling providers seeking to offer their services to Irish-based customers and/or to offer their services from within Ireland to other jurisdictions. If the Irish authorities strike the right balance in their approach to taxing the gambling sector, then it is ‘odds on’ that Ireland will become a successful, well-regulated international gambling hub in the decades to come.

Dr Max Barrett is a practising Irish solicitor. Any views in this article are personal. Any comments may be e-mailed to drmaxbarrett@gmail.com.