Tithe an Oireachtais
An Comhchoiste um Dhlí agus Ceart, Cosaint agus
Comhionannas
Tuarascáil maidir le héisteachtaí i ndáil le Scéim an Bhille um
Rialú Cearrbhachais
Samhain 2013
___________________________
Houses of the Oireachtas
Joint Committee on Justice, Defence and Equality
Report on hearings in relation to the Scheme of the
Gambling Control Bill
November 2013
Table of contents
1. Introduction 2. Conclusions
3. Key Themes in the submissions
Appendix A – Transcripts 2nd and 9th October 2013 Appendix B – Submissions
1. Introduction
Following the publication of the General Scheme of the Gambling Control Bill, the Joint Committee on Justice, Defence and Equality (hereafter the „Joint Committee‟) was invited to review and consider the General Scheme, and report back to the Minister with any observations arising from a consultation process.
Accordingly, the Joint Committee invited written submissions from interested groups or individuals in relation to the Heads of the Bill. It was specified that submissions should deal with each Head individually and suggest amendments as necessary including the rationale for each. The Committee received 29 submissions and held public hearings on 2nd and 9th October 2013.
This Report summarises issues relating to the General Scheme which have been brought to the attention of the Joint Committee. In particular, the Report attempts to summarise and set in context some of the points made in stakeholder submissions and subsequent presentations to the Joint Committee at public hearings.
It should be borne in mind that, the Heads of the Bill have no legal effect and what is published is only the General Scheme of Heads of a Bill which will require further work before they will be published.
On behalf of myself and the members of the Committee, I wish to thank all those who participated in this process either by way of written submission and/oral presentation to the Committee.
David Stanton TD
Chairman
2. Conclusions
The conclusions, which are informed by an analysis of secondary sources, stakeholders‟ submissions and Committee hearings are now listed in the order in which they appear in the body of the report.
Conclusion 1
Clarity is required on the proposed licencing regime. A wider consultative approach may be necessary comprising industry experts and the general public prior to the Minister introducing formal Codes or Orders, particularly considering some proposed changes in licensing.
Consideration needs to be given to a requirement to have in place, as part of the licencing regime, a system to monitor funds in on-line accounts, deposits and unclaimed winnings.
Conclusion 2
The issue of enabling charitable self-funding through lotteries requires attention considering recent developments in the area (in particular, the phasing out of the Charitable Lotteries Fund). Maintaining the cap on the amount charities can raise through lotteries (as proposed in Head 19) in this regard may merit closer scrutiny.
Conclusion 3
A more in-depth assessment of the advantages/disadvantages of adopting an independent regulatory regime may merit consideration, in particular the role of the Minister, the Department of Justice and Equality and the proposed Office for Gambling Control, Ireland (OGCI).
Conclusion 4
Careful analysis is required to avoid potentially regressive definitions and interpretations which may negatively impact the industry.
Conclusion 5
As raised by a number of stakeholders, greater specificity on the social gambling fund may be necessary, as follows:
The purposes of the fund, in the first instance, should be to help prevent and alleviate gambling addiction through public education/social awareness and rehabilitation;
where possible, any surplus in the fund should also be used in a broader community context;
The contribution to be made to the fund should be based on an operator‟s turnover from the previous year and should be payable at the time of the licence
Conclusion 6
The structure of the self-exclusion register, particularly in relation to the obligation on operators to liaise with the regulator and monitor at-risk players, needs to be formalised to maximise its effectiveness. Consideration should also be given to identifying best practices with regard to what supports are provided to those who self-exclude and whether a national/EU standard could be utilised.
Conclusion 7
Further consideration needs to be given to the limitations, under the General Scheme, on Ministerial powers regarding exemptions including for inter alia large-scale
developments (e.g. resort casinos).
Conclusion 8
The treatment of any form of gambling involving „virtual events‟ (such as virtual Roulette, Racing and Poker Machines etc.) merits closer scrutiny in future iterations of the General Scheme and the Committee proposes serious consideration be given to an outright ban of this form of gambling.
3. Key themes in the submissions
A selection of the key themes which emerged during analysis of the submissions is presented below. This Report does not address every issue raised by each stakeholder or address each Head of the Bill individually. Submissions are instead addressed thematically.
3.1 Licensing arrangements
The respective roles of different actors in relation to licensing arrangements, i.e. the Minister and the Office for Gambling Control Ireland (OGCI) emerged as an issue in a number of the submissions. One of the key aspects of these proposals appears to be the functions of the Minister in this regard. In its submission, Betfair raised a query over the interpretation of Ministerial „policy directions‟ in relation to the awarding of licenses as specified in Head 5 (3) (i). The need for clarity on the respective roles of the Minister and the OGCI was highlighted as was the importance of transparency and fairness in the process of awarding a licence. The regulation of the OGCI and the issue of regulatory independence are discussed further in this Report in section 3.4.
The Irish Bookmakers Association (IBA) also queried whether the Minister would be required to consider the views of the proposed advisory committee (Head 76) on responsible gaming (which will assist the OGCI in its work) in relation to policy decisions by the Minister. The advisory committee is detailed in Box 2, below.
Box 2: Head 76 – Advisory Committee
(1) The OGCI shall establish an advisory committee on responsible gambling. (2) IT shall consist of a nominee of the Minister for Social Protection, the
voluntary/community sector, a representative from the HSE and two representatives from licence holders.
(3) The committee shall be appointed by the chief officer, OGCI
(4) It shall be chaired by the chief officer or by another chief officer of the OGCI nominated by the chief officer.
(5) Each appointment shall be for a maximum of three years and may be renewed. (6) The committee shall be supported by secretarial resources from OGCI and it shall
meet at least three times annually.
(7) Its function is to review policies and practices in place under this Part, to prepare commentary on those policies and practices, t monitor developments in this area and to highlight and bring to bear those elements likely to assist licence holders discharge their obligations.
Part 3 of the General Scheme refers specifically to the subject of licenses (Heads 15 to 53) which would be issued by the new OCGI on behalf of the Minister, subject to certain conditions. The Heads in this Part of the Bill specify details in relation to different categories of licenses (43 are proposed, under 4 general categories: betting, gaming, mixed remote and temporary). Further detail on licencing categories in particular is provided in the General Scheme under Schedule 1: Licences that may be issued (Heads 15, 17).
Reference was made in the submissions to proposed changes in the current licensing regime and its impact on operators. The Licenced Gaming Association of Ireland (LGAI) stated that under the Gambling and Lotteries Act, 1956 operators cannot receive a gaming license unless amusement facilities are also provided in the same premises. Gaming licences are then issued on an annual basis, by the Office of the Revenue Commissioners under strict operational criteria. The Irish Amusements Trade Association (IATA) submitted in its presentation to the Joint Committee on 9 October, that the Gambling and Lotteries Act,
1956 and the Finance Act, 1992 dealing with the issue of amusements in particular, “directly
contradict each other” in their treatment of amusement licensing.
The LGAI also stated that, under current legislation on gaming licences, amusement machines must be operated in distinct, age-restricted areas. Head 17 of the General Scheme states that where category 2A (Gaming halls/arcades) and 2B (Amusement halls/arcades) licences are operational in the same location (as required for a current Gaming licence), physical separation must now occur and “there cannot be any connecting passages or doorways (even if locked) between the two facilities”. The LGAI contends in its submission that “the proposed regime as set out in Head 17 is unworkable.” The Irish Amusement Trades Association (IATA) similarly stated that this provision is “completely impractical, particularly for the small arcade” and that this will “completely destroy the traditional seaside arcade.”
In relation to Head 15: Licenses, by category, that may issue under this Act, the LGAI, referring to „security of tenure‟, requested that recognition be given to current operators when granting licences based on their existing licenses and investment in the industry particularly in relation to a transition to the new regime. The Gaming and Leisure Association of Ireland (GLAI) and the Irish Amusement Trades Association (IATA) also stated this view in their submissions.
Betfair highlighted the „nominated/qualifying officer‟ element of the licencing process (Head 25 (4) (ii) and (8)) in their submission and recommended a simplification of this process. Betfair proposes sector-specific rather than per operator licences as the current proposals could prove “bureaucratic” in practice. As proposed, there are 43 licence categories. Further detail on this is provided in Schedule 2: Numbers of Qualifying Officers Required as Licence
The Remote Gambling Association (RGA) underlined the importance of undertaking public consultation exercises before the Minister introduces any Codes or Orders. This point was also raised by the Irish Bookmakers Association and Paddy Power.
The question of where exactly the regulator is positioned, i.e. within the Department of Justice and Equality, is also related to licensing arrangements and was raised by some of the submissions in this context. This issue is discussed in section 3.4 of this Report.
3.1.1 Unlicensed operators/machines
In response to Head 17: Specific matters affecting particular activities and licences, the Gaming and Leisure Association of Ireland (GLAI) submitted that it believes there are 20,000 unlicensed gaming machines in operation in Ireland, across a number of unlicensed venues. The Licenced Gaming Association of Ireland (LGAI) estimates there are 19,189 unlicensed machines in the State and supplied the following breakdown in its submission (see Table 3, below).
Table 3: Estimation of gaming machines by LGAI members (LGAI Submission) Country/Area Machines
Dublin/Wicklow 7,000
Galway/Cork/Donegal 10,500
Other countries 7,350
Total Licenced and Unlicensed 24,850
Licenced (2012) 5,661
Total Unlicensed 19,189
The LGAI stated further, in its presentation to the Joint Committee on 9 October, that a possible cause of this level of unlicensed machines is the conflicting regulatory regimes currently in operation. According to the LGAI, „gaming‟ licences must adhere to strict operational criteria including mandatory inspections and reporting whereas „amusement‟ licences require only a tax clearance certificate and involve no mandatory inspection of the property. The Irish Amusement Trades Association (IATA) similarly submitted that the regulatory regime is at fault, citing the level of unlicensed machines currently in operation. As a solution, the LGAI proposes “two amusement licences” (rather than one, as proposed in the General Scheme) and a “strong gaming licence” with the LGAI representative stating: “a lot will be achieved with very clear and simple definitions of these licences.” Further discussion on definitions and interpretations is featured in section 3.5 of this Report.
In its submission, the Licensed Gaming Association of Ireland (LGAI) also recommended the establishment of a regulatory “taskforce” prior to the introduction of a Gambling Control Act
in the form of an Interim Gaming Regulation Authority in order to tackle existing issues in the industry. The proposed focus for this Authority would be in addressing the issue of the substantial number of unlicensed operators and in particular, unlicensed gaming machines in the State.
Conclusion 1
Clarity is required on the proposed licencing regime. A wider consultative approach may be necessary comprising industry experts and the general public prior to the Minister introducing formal Codes or Orders, particularly considering some proposed changes in licensing.
Consideration needs to be given to a requirement to have in place, as part of the licencing regime, a system to monitor funds in on-line accounts, deposits and unclaimed winnings.
3.2 Charitable Lotteries
The Rehab Group was highly critical in its submission of the proposed maximum limits (or cap) on charitable funding detailed in Head 19 (Part C), in particular due to the winding down of the Charitable Lotteries Fund (see Box 3, below).
Box 3: The Charitable Lotteries Fund
The Charitable Lotteries Fund (often referred to as the Charitable Lotteries Compensation Fund) was established in 1997 to supplement the lost revenue of private charitable lotteries whose products competed directly with the National Lottery (itself established in 1987). The funding is derived from the National Lottery surplus. The funding allocation for 2011 and 2012 was €6 million.
The Minister for Justice and Equality, Alan Shatter, responding to a parliamentary question [4431/13]1 in January 2013, stated that private charities received the following funding allocations for 2011/2012:
Table 4: The Charitable Lotteries Fund Allocation (2011-2012)
Charity 2011 (€) 2012 (€)
REHAB Lotteries 3,905,661.42 3,923,659.43
Gael Linn 436,262.33 454,274.93
Asthma Society of Ireland 364,236.16 371,277.42
Irish Cancer Society 209,728.93 189,774.86
Polio Fellowship of Ireland 209,728.93 189,774.86
The Hanly Centre 169,393.23 176,194.59
Irish Lung Foundation Limited 109,212.02 101,458.34
1
West of Ireland Alzheimer Foundation 104,135.45 95,624.29
Ataxia Ireland 69,427.13 94,449.01
Drogheda Community Services Trust 94,298.22 78,107.81
St Kierans Community Centre 76,512.53 66,759.33
ISPCC 64,633.59 64,560.25
Irish M.E. Trust 61,900.03 63,795.57
Longford Cathedral Circle 39,552.21 39,943.77
Associated Charities Trust 25,905.21 27,067.76
Mulranny Day Centre Housing Co. Ltd. 18,885.88 19,578.59
Lyreacrompane Community Development Ltd 18,182.60 18,295.34
Sliabh-Ardagh Rural Development 12,401.26 13,378.73
Cappoquin Community Development Co. Ltd 9,942.85 12,025.13
Total 5,999,999.98 6,000,000.01
The Minister has initiated a gradual wind down of the fund commencing this year, citing Departmental budget constraints. The total proposed allocation for 2013 is €4 million. Subsequent years are as follows: €2 million (2014), €1 million (2015) and nil (2016).
It was suggested by the Rehab Group that the proposed cap would result in the “complete elimination of charities from the lottery marketplace, because of the preferential and discriminatory position afforded to the National Lottery”. The Rehab Group noted:
“In the absence of a fair and reasonable charitable lottery compensation fund, we urge the Committee to recommend that the cap on prize funds be removed entirely, to ensure fair competition and to prevent abuse of dominance in the marketplace by the National Lottery.”
In its presentation to the Joint Committee on 9 October, The Rehab Group stated that a number of measures in the Bill create “fundamental concerns about the impact on the not-for profit sector in Ireland excluding it from an area of activity which has been key to the growth of that sector”. Particular reference was made to the treatment of bingos (section 3.10 of this Report) and the cap on charitable scratch-card prize fund limits.
Conclusion 2
The issue of enabling charitable self-funding through lotteries requires attention considering recent developments in the area (in particular, the phasing out of the Charitable Lotteries Fund). Maintaining the cap on the amount charities can raise through lotteries (as proposed in Head 19) in this regard may merit closer scrutiny.
3.3 Service licenses and registration with the OGCI
Betfair raised the questions of which entities need to be registered with the national regulator, the OGCI (Head 16 refers) and which organisations would need to apply for a service license (Head 24 refers). Regarding registration with the OGCI, it queried whether,
for example, a firm‟s external auditor or platform service providers would be required to register. In its view, there needs to be greater clarity on these issues in the future. RLMS Sales queried the situation in relation to a supplier of equipment or machines registering with the OGCI. The Remote Gambling Association (RGA) also queried the proposed approach (requiring service suppliers to register with the OGCI) which it views as “very broad”. This view is shared by the Irish Bookmakers Association (IBA) who sought clarity in relation to who will be required to register under Head 16.
In contrast, the Gaming and Leisure Association of Ireland (GLAI) stated the following in relation to Head 16: Registration required in certain cases:
“Recommendation: We agree that registration of those persons / entities supplying equipment, machines, services, software packages and storage to licensed operators is appropriate and in accordance with best practice”.
International Game Technology (IGT) called for further clarity regarding the service licence category with regard to the remote gaming licensing category.
3.4 Regulation by the OGCI
In Head 6 of the General Scheme, the Minister can designate certain officers to discharge on his behalf, certain responsibilities, functions, powers and duties of the Minister. Where the Minister has exercised these powers he will organise, or cause to be organised, into a structured unit of his Department those officers designated under this Head with the unit to be named the Office for Gambling Control Ireland (OGCI). The OGCI will issue all licences and carry out inspections.
Discussion in the submissions
Several submissions raised the issue of where the regulator is to be situated, i.e. that it will be positioned within the Department of Justice and Equality. In this context, concerns were raised about the independence of the regulator and divergence from best regulatory practice. Some submissions expressed an opinion that the proposed position of the regulator as a unit within the Department would be best reconsidered.
Specifically, Betfair recommended that establishing the OGCI as a statutory body with legal independence enshrined in law be considered. The Gaming and Leisure Association of Ireland (GLAI) recommended the establishment of an independent regulatory body “removed from the sphere of political influence”. It further noted that:
“An independent regulatory authority is required, not only to enhance the reputation of the industry and to afford the consumer greater protection, but also to attract online operators to locate in Ireland, potentially creating in excess of 5,000 jobs within a short timeframe of this legislation being enacted”.
The same submission also suggested that as with Head 5, that “an independent regulator rather than a particular Minister should have the power to „designate certain of his/her officers to discharge on behalf of the Regulator certain responsibilities, functions, powers, and duties of the regulator under this act‟”.
The Rehab Group concurred with this view, stating its “grave concerns” over the current proposal, noting:
“Instead of the establishment of an office, located within the Minister‟s Department, to oversee a small number of gambling and lottery activities, we propose the establishment of a specific regulatory authority, with an independent board which is fully transparent and beyond political influence, charged with overseeing the operation of all gambling and lottery activities in Ireland.”
Paddy Power welcomed the proposal to establish the OGCI in Part 2 of the Scheme but stated the following:
“While we note that the OGCI will be located within the Department of Justice and Equality, it is important that it will be in a position to operate, and be seen to operate, independently in keeping with best regulatory practice. The inter-relating and overlapping roles of the Minister and the OGCI could perhaps be further refined in the future iterations of the Scheme”.
Paddy Power suggested that the scope of Codes should not be narrowly construed (as they state they are in Head 10) so that the OGCI can quickly respond to market developments without having to seek Ministerial orders or changes to primary legislation. Another issue is the level of expertise of staff within the OGCI. It was suggested that this could be augmented by close liaison with regulators in other jurisdictions until such time as the OCGI staff develop their skills (Remote Gambling Association – RGA).
International regulatory models
The issue of mechanisms by which gaming is regulated was discussed in the 2008 Report of the Oireachtas Casino Committee, Regulating Gaming in Ireland,2 in which the authors provided an overview of international gaming regulatory practice. This report included a classification of regulators in European countries which is reproduced below for illustrative purposes. It should, however, be noted that the matrix in the Casino Committee‟s report is itself based on a 2005 study commissioned by the Netherlands Gaming Control Board and thus, is some years old at this stage.
In exploring the diversity of organisational structures within regulatory systems adopted in Europe, the authors designed a matrix classifying regulators according to their
2
Available online at:
http://www.justice.ie/en/JELR/Casino%20%28Eng%29%20for%20Web.pdf/Files/Casino%20%28Eng %29%20for%20Web.pdf
positioning/independence vis-à-vis government ministry and relative powers. A high degree of independence illustrated on the matrix means the regulatory authority is an independent administrative organisation.
In a jurisdiction that is grouped among those with a low degree of independence the regulation is carried out by a department of a ministry or an inspectorate. Intermediate forms across the spectrum are regulatory bodies that operate independently, but whose policies and guiding principle can be influenced by the relevant ministries.
Table 5: Classification of regulators according to positioning and powers, 2005
Source: Report of the Casino Committee (2008) Regulating Gaming in Ireland. Available at
http://www.justice.ie/en/JELR/Casino%20(Eng)%20for%20Web.pdf/Files/Casino%20(Eng)%20for%20 Web.pdf
The Regulating Gaming in Ireland report (on page 30) also identifies the following main benefits of having an independent regulator as follows:
a) The maintenance of a clear distinction in the allocation of responsibilities i.e. responsibilities for policy development, market supervision etc.;
b) The maintenance of a clear distinction of purpose i.e. who is responsible for policy and who is responsible for the supervision of the market;
c) The prevention of potential conflicts of interest;
d) The administration of a transparent system of authority;
e) The development of a flexible, „best-in-practice‟ organisational structure of governance;
f) Minimal political influence from the Ministry provides organisational constancy for the regulator;
g) An independent regulator has a much better chance of creating a highly effective „centre of excellence‟ type organisation with the requisite social, economic, legal and technical expertise available to respond immediately to what is a highly dynamic gaming market.
The Irish Bookmakers Association recommended that the Bill provide for a statutory basis for consultation between the OGCI and key stakeholders in the regulation of the gambling industry. Similarly, the Remote Gambling Association recommended that a constructive dialogue be sustained between the government, the regulator and stakeholders to take full account of relevant expertise and experience in this process.
Conclusion 3
A more in-depth assessment of the advantages/disadvantages of adopting an independent regulatory regime may merit consideration, in particular the role of the Minister, the Department of Justice and Equality and the proposed Office for Gambling Control, Ireland (OGCI).
3.5 Definitions and interpretations
Several definitions and interpretations are set out in Head 1 of the General Scheme including betting and gambling. A number of submissions raised issues in relation to the definitions provided in the General Scheme from the point of view of a need for further clarity and in some cases proposed amendments.
The Irish Amusement Trades Association (IATA) raised a number of issues in relation to the definitions of inter alia, “amusement hall / amusement arcade” and “amusement machines”. The IATA stated that the definition featured in Head 1 of the General Scheme (replicated below in Box 4) “poses a major problem for our members” insofar as it is more defined than under current legislation and has the potential to cause planning difficulties. Regarding amusement machines, the IATA believes a specific award/value should be specified rather than rely on use of the term „use of credits‟ and that this specification should
be applicable in respect of low-stake low-payout establishments such as public houses or restaurants.
Box 4: Definition of Amusements Hall/Amusement Arcade/Amusement Machine
“Amusement Hall/Amusement Arcade”
Any covered area having amusement machines only, and which is only to young persons as well as adults.
“Amusement Machine”
i. A mechanical, electrical or electronic machine or device, operated by the insertion of a player card, a coin, a token, a credit or debit card of by the use of credits,
ii. Being a machine that is intended exclusively for amusement purposes,
iii. Where, if the player obtains anything representing money, goods or any other benefit other than the opportunity to continue to use the machine, it is of nugatory value.
The Licenced Gaming Association of Ireland (LGAI) also raised a concern over the appropriateness of these definitions, stating that they believe them to be “contradictory” and that legislation should reflect the distinction between an “amusement machine” and an “amusement with prize machine”. As discussed in section 3.1, it is the view of the LGAI that two amusement licences be issued to tackle, inter alia, the issue of unlicensed gaming machines.
The Irish Showmen‟s Guild (ISG) raised a concern over the definition of “gaming” which it feels does not take account of changing technology in particular through the treatment of traditional fairground Prize Stall games. Defining „funfair‟ as “a fair consisting wholly or principally of the provision of amusements” (Head 1) and “gambling” as to include “(v) amusements” conflicts with the “no „young persons‟ as employees or players” (Head 70) despite the distinction that gaming is not the main activity. The ISG stated that this would disallow players under 18, the principle audience. Betfair questioned the definition used for “spread betting” which it believes to be inaccurate.
The Gaming and Leisure Association of Ireland (GLAI) drew attention to the lack of a definition for “turnover”. Bet Beware commented on the definition of “bet” and in the context of “betting” in the General Scheme (replicated below in Box 5) raised the issue of virtual events which if feels should be prohibited. Bet Beware also referred to the importance of stating that “event to be decided” in the future be part of the definition of a “Bet”.
Box 5: Definition of Bet/Betting
means to make a wager, and cognate words shall be construed accordingly.
“Betting”
means making or accepting a bet (including when made or accepted through a betting service or a betting exchange) on
i. The outcome of a race, competition or other event or process, including virtual events, ii. The likelihood of anything occurring or not occurring, or
iii. Whether anything is or is not true And includes pool betting.
Bet Beware, the IATA and Bord na gCon suggested that references to virtual events should be removed. Bet Beware stated that there are “serious doubts” over the integrity and fairness of virtual events, predominately in the form of virtual horse or cycle races, regarding the possibility of bias in favour of the operator/house. The IATA stated that virtual events should be considered as „gaming‟ and not „betting‟ as proposed under the General Scheme. FOBTs are discussed in greater detail in section 3.9 of this Report.
Bet Beware also commented on the definitions in relation to casino games, fixed odds betting terminals (FOBTs) and licensed bookmakers. The Irish Bookmakers Association (IBA) and a number of other submissions called for greater clarity generally in relation to Head 1.
Conclusion 4
Careful analysis is required to avoid regressive definitions which may impact the industry.
3.6 Social gambling fund
Part 7 (Heads 77-81) of the General Scheme contains proposals to establish a social fund, which will be administered by the OGCI. This will be funded by contributions from service license holders and will have joint purposes as follows:
1. To promote socially responsible gambling and
2. To assist in counter-acting the ill-effects for society, as well as for persons and their families, of irresponsible gambling.
This general proposal was welcomed by the Irish Amusement Trades Association (IATA) and Betfair although the latter suggested there needs to be clarity about how the fund will operate and the level of contributions required. It cited the operational structure of the „Responsible Gambling Trust‟, a leading charity in the UK committed to minimising
gambling-related harm, as a model to consider.3 The gambling industry voluntarily funds the Responsible Gambling Trust which is made up of experts with a background in helping people with addiction, the gambling industry or Government.
RLMS Sales also sought clarification around the level of the contribution.
Other submissions were of a similar nature in that they broadly welcomed the establishment of the fund but urged clarity and that there be fairness in the approach across all gambling activities.
The Remote Gambling Association (RGA) argued that contributions to the fund should be based on gross profits rather than a percentage of turn-over as is currently stated in the General Scheme (Head 77(3)). It believes that this would be a more equitable approach. The Gaming and Leisure Association of Ireland (GLAI) sought clarification of the term “turn-over”. The Irish Bookmakers Association (IBA) also commented on the use of turn-over for calculating contributions to the fund. It believes this method of calculation to be unsuitable and unfair, “as it will hit high turnover, low margin businesses harder than others”. In its view, it will not accurately reflect a licensee's ability to contribute to the fund, or volume of customers they may have and it therefore recommend that a fixed fee, based on the level of gross profits generated by the business be considered. The IATA echoed this point and questioned the practicalities of the turnover based levy.
Paddy Power also expressed its concern at the proposal to apply the contribution to the social fund based on turnover (Head 80) “given the intense international competition for online gambling and the narrow margins which generally apply for gambling products”. It suggested exploring alternatives included the system for example in the UK where operators contribute voluntarily to the Responsible Gambling Trust on a flat rate based on scale (number of licences) which would reflect more fairly the scope and therefore profits of the operator and business as a whole.
This proposal was, thus, generally welcomed albeit accompanied by calls for the levy to be imposed on an equitable basis across all gambling service providers and queries over the basis on which contributions would be determined. The prospect of utilising Fund surpluses for non-gambling, community purposes was queried during presentations to the Joint Committee on 2 October. Paddy Power stated that the use of the fund, as with the method of funding, is entirely a Government decision but utilising the fund in that manner is not “classically done” in Europe.
Bet Beware cautioned that the OGCI should control all aspects of the fund.
3
Conclusion 5
As raised by a number of stakeholders, greater specificity on the social gambling fund may be necessary, as follows:
The purposes of the fund, in the first instance, should be to help prevent and alleviate gambling addiction through public education/social awareness and rehabilitation;
where possible, any surplus in the fund should also be used in a broader community context;
The contribution to be made to the fund should be based on an operator‟s turnover from the previous year and should be payable at the time of the licence
application.
3.7 Self-exclusion register
Proposals for a self-exclusion register are set out in Head 71 of the General Scheme. This would be a voluntary process whereby a person with a gambling concern can have themselves excluded from specific gambling venues, or from accessing gambling products provided by particular providers. Such registers are used in other jurisdictions in an attempt to prevent those with a gambling problem from gambling further. The OGCI will hold a register of all persons who have entered into self-exclusion arrangements with license holders. Some elements of the gambling sector in Ireland already offer customers their own self-exclusion facilities.4
Note: Operators are not currently permitted under existing EU Data Protection rules to share
personal data between each other. The Remote Gambling Association (RGA) suggested however that a regulator (or a body appointed by the regulator), such as the proposed OGCI would be permitted under law to collect personal information from operators and share accordingly once individuals choose to self-exclude, This was confirmed by the Data Protection Commissioner Billy Hawkes during questioning at the Joint Committee, on 9 October.
Betfair supports the introduction of a self-exclusion register within a regulated gambling market in Ireland. It did, however, suggest that the register would be most effective if it were shared with all licensed operators and it is made a licensing condition that operators cannot accept new customers whose names are on the register. This would prevent an individual who has self-excluded from one operator from opening an account with another operator while their name remains on the self-exclusion register. A centralised database under the
4
See for example http://glai.ie/downloads/policy/GLAI_Self_Exlusion.pdf and
remit of the OGCI was also supported by the Gaming and Leisure Association of Ireland (GLAI) and the Remote Gambling Association (RGA). Paddy Power is supportive of the measure but have concerns as to how it might be applied in a retail context.
The Danish self-exclusion register (known as ROFUS) was cited as a relevant example.5 Olympic Entertainment Group welcomed the proposal and offered the example of Estonia as another to consider.
Some submissions made suggestions regarding improvements to the system of self-exclusion:
1. Customers should also have the option of being able to exclude by particular products (RGA submission).
2. Clarify that the register is solely for Irish residents rather than all customers of a licensed company (RGA submission).
3. Allow a customer to self-exclude by e-mail or by telephone call to a company‟s customer services department subject to them providing the normal information to confirm their identities (RGA submission).
4. Alter the minimum self-exclusion period for online gambling (to six months) (RGA submission).
5. Include a provision to enable licensed operators to engage with „concerned family members‟ about their loved ones in the event that they are contacted (GLAI submission).
Some of these points were echoed by The Rank Group PLC who noted that, in their experience, it is advantageous to allow customers to exclude themselves from specific products as well as from gambling entirely with a minimum self-exclusion term of six months. The Irish Bookmakers Association stated its support for the proposed introduction of self -exclusion requirements, but had concerns about the method proposed. It recommended, rather, that a more effective solution would be for each licence holder to maintain their own database, and to provide details of same in the audits they will be required to conduct.
5
The register of self-excluded persons (ROFUS) is a register of all individuals in Denmark who voluntarily have chosen to exclude themselves temporarily or permanently from online gambling in Denmark. The Danish Gambling Authority administrates ROFUS and is responsible for maintaining and updating the register. For more information see the website of the Danish Gambling Authority at
Macau Sporting Club, in its submission, deemed the measures in part 6 of the General Scheme to be fair and reasonable but stressed the need for further clarity. RLMS Sales questioned how the OGCI would maintain the register of all self-excluded persons in practice.
Conclusion 6
The structure of the self-exclusion register, particularly in relation to the obligation on operators to liaise with the regulator and monitor at-risk players, needs to be
formalised to maximise its effectiveness. Consideration should also be given to identifying best practices with regard to what supports are provided to those who self-exclude and whether a national/EU standard could be utilised.
3.8 Casinos
The General Scheme addresses the issue of casinos and related matters in Part 3. Head 18 specifically deals with casinos and casino games. This head provides for, inter alia, the number of land based casino licenses6 that will be determined by the Minister (a maximum of 40), the maximum (15) / minimum permitted number of tables/ machines and the conditions under which a liquor license may be granted. The OGCI may specify further conditions on licensed operations, as specified in Part C (6)-(7). The Gaming and Leisure Association of Ireland made extensive comments on Head 18, noting their concerns about what they characterised as the appearance of political interference in relation to the absence of an “independent regulatory body” (as detailed further in section 3.4 of this Report), including the following points:
Provide significantly more clarity on the timeline that will be made available to operators to secure planning permission in advance of their obligation to lodge a valid casino licence application.
In order to enable smaller casinos to be commercially viable, casino gaming should be subject to a gaming tax on a sliding scale, not VAT.
The „multiplier‟ regarding the number of gaming machines permitted in a licenced casino should be increased from 2 to 5.
Applying provisions restricting the consumption of alcohol to bar areas to other gambling service providers rather than just to casinos.
The Regulator should make it a condition of a 2R license that the operator verifies the identity of each person attending the venue by obliging customers to provide
6 Category 2R – land based casino.
Category 2O – remote casino service.
approved identity documents. The maintenance of a membership entry system is essential to facilitating a self-exclusion facility and will also assist with monitoring the frequency of player visits in the event that intervention is required.
The gaming company International Game Technology (IGT)7 stated that capping the number of gaming machines at 25 per licenced (licence category 2R) location will have no positive social benefit and will only serve to minimise the revenues generated for all of the stakeholders.
Olympic Entertainment Group (OEG) cautioned that the proposal to set a maximum number of gaming machines by reference to a multiplier of being not greater than 2 per table and not exceeding 25 departs from “the proven European casino best practice”. Its submission asserts that European casinos‟ experience shows that, depending on the market size, 5-7 gaming machines per operated gaming table ensures good balance between customer, operator and regulatory body interests. This would mean a maximum theoretical casino size of 15 gaming tables and 105 gaming machines. In addition, it maintains that the proposed limits on the number of tables and gaming machines permitted are also not in line with European casinos best practice with most EU states not limiting the number of gaming machines in a given location.
The Rank Group PLC also had a number of comments in relation to maximum/minimum permitted numbers of tables / machines. It raised questions in relation to the proposed machine to table ratio (2:1), the cap on gaming machines (which in casinos would be restricted to 25) and the objectives of the proposed restrictions on liquor licencing for casinos. Macau Sporting Club also cited the machine/tables ratio of 2:1 and that this proved financially unviable in the UK. In addition, it queried the separation between the area used as a casino and the area used for liquor (in relation to Part D – Liquor license). OEG also questioned this issue citing the example of the UK, where “no negative impact was recorded”.
The Irish Bookmakers Association (IBA) noting that the proposed duration of a "category 2R" licence for casinos is 10 years, called for “some equivalence between the length of licences for casinos and other land-based retail gambling premises, including retail bookmaking offices” in its submission. Conversely, the Gaming and Leisure Association of Ireland called for a lengthening of the casino licence to 15 years, from 10 “as profit margins for casino operators are far lower than many assume…so to enable operators to secure a return on the initial investment required to establish a casino.”
7
IGT is a global gaming company specializing in the design, development, manufacture, and marketing of casino games, gaming equipment and systems technology for land-based, interactive and social gaming markets.
3.8.1 Resort casinos
Under Head 18: Matters specific to casinos and casino games (Part B - casino games) casino games are permitted subject to certain licensing criteria. The submission by O‟Connell Mahon on behalf of Richard Quirke stated that the restrictions on the size and scale of a casino stated in Part C (maximum/minimum permitted numbers of
tables/machines) “effectively legislates against resort casinos”. Particular reference was
made to the proposed Two-Mile Borris development in County Tipperary which incorporates a large scale resort casino.
Conclusion 7
Further consideration needs to be given to the limitations, under the General Scheme, on Ministerial powers regarding exemptions including for inter alia large-scale
developments (e.g. resort casinos).
3.9 Ban on fixed odds betting terminals (FOBTs)
The legislation being prepared will include a full ban on fixed odds betting terminals (FOBT). Under Head 49 (7) (b) (i), “no licence may be issued under this Act in respect of any device that is or is capable of being or becoming a FOBT” (fixed odds betting terminal). This ban is said to reflect “the level of concern felt by the Government at the very harmful effects of these terminals”.8 A review of gaming machines and prizes is currently underway in the UK although some sources expect the British government to freeze stakes on fixed odds machines when they announce the outcome of the review.9
The ban on FOBT in Head 49 (7) is supported by Bet Beware, which opposes all forms of FOBT type activity, in its submission to the Joint Committee:
“Paragraph 7 deals with Fixed Odds Betting Terminals [FOBT‟S]. Bet Beware believes, as stated earlier, that it is important to legislate for the prohibition of all FOBT type activity even when transmitted into a shop on a television screen from a remote location”.
Aiséirí (the Cahir addiction treatment centre) also advocated the prohibition of FOBTs due to “their capacity to produce problem gamblers due mostly to the short turnaround of the results
88
Department of Justice and Equality (2013) Minister Shatter publishes General Scheme of the Gambling Control Bill 2013. 15 July 2013.
9
BBC website (2013) Maria Miller set to freeze stakes on fixed odds machines. 23 August 2013. Available at http://www.bbc.co.uk/news/uk-politics-23768435
Information on the consultation is available at
https://www.gov.uk/government/consultations/consultation-on-proposals-for-changes-to-maximum-stake-and-prize-limits-for-category-b-c-and-d-gaming-machines
of the bet placed, and the large denomination notes accepted etc”.
Bet Beware, the IATA and Bord na gCon suggested that references to virtual events should be removed. Bet Beware stated that there are “serious doubts” over the integrity and fairness of virtual events, predominately in the form of virtual horse or cycle races, regarding the possibility of bias in favour of the operator/house. The IATA stated that virtual events should be considered as „gaming‟ and not „betting‟ as proposed as “the result is always predetermined” and bets are not taking place on a “future event”. The IATA contends that this definition places them closer to FOBTs which are prohibited under the General Scheme.
Conclusion 8
The treatment of any form of gambling involving „virtual events‟ (such as virtual Roulette, Racing and Poker Machines etc.) merits closer scrutiny in future iterations of the General Scheme and the Committee proposes serious consideration be given to an outright ban of this form of gambling.
3.10 Bingo
The definition of “gambling” in the General Scheme includes “participating in a bingo”. Head 20 of the General Scheme provides for categories of bingo licences. It clarifies the position of charities and other organisations in this respect:
“(2)
(i) For the avoidance of doubt, this Act shall cover bingo whether held for primarily charitable or philanthropic causes, or otherwise.
(ii) A registered charity may apply for and, subject to this Act, may be granted a licence under paragraph 3(i), (ii), (iii) or (iv).
(iii) A non-profit sports or recreational club, facility, organisation or enterprise may apply for and, subject to this Act, may be granted a licence under paragraph 3(i) or (ii)”.
The Remote Gambling Association (RGA) suggested that the description of bingo given is designed to cover traditional bingo in a land-based venue and it does also adequately capture the same sort of product when it is provided online. In its opinion, the OGCI could regulate this form of bingo to the same high standards as any other and it would be unfortunate if the prescriptive definition of bingo under Head 20 inadvertently served to rule it out. It also highlighted the differing licence periods for online products (remote bingo will require an annual licence) and land-based products (mostly two year licenses).
The Irish Bookmakers Association (IBA) called for greater clarity on bingo licenses for remote bingo, including what level of prizes may be paid out and who can apply.
In its submission, Bord na gCon stated its belief that it is “in a very strong position to apply for licenses to operate bingo around the Country” given its stadias‟ locations and facilities. The submission of the National Association for the Deaf (trading as DearHear), a registered charity, focused primarily on the issue of bingo licenses, explained that DearHear held a number of bingo licenses between 1987 and 2011 from which it derived much income. In 2012, their commercial bingo promoter notified them that, in anticipation of the philanthropic requirement soon being abolished, he was no longer going to operate the contract. The charity, highlighting their resulting loss of income, expressed their fears that the Gambling Control Bill 2013 “now proposes to legitimise this”. Its submission, which makes a number of detailed points about bingo and charities, warns about the effect of the proposed legislation on a principal source of income for charities and states:
“it is submitted that the proposal to „relax‟ the rule that bingo must always be for charitable or philanthropic purposes goes far too far, and perhaps even to the point of constitutional change, in the draft legislation”.
The Bingo Association of Ireland also raised a number of issues in relation to bingo, including:
It will be proposing the appropriate level of action with a code of conduct and a code of practice for its members; drafted in line with international best practice for social responsibility. Funding for same shall be provided by the operators. This is proposed in lieu of an imposed cross-industry levy.
It expects the current exemption from VAT to remain in place.
In its view, licensing costs should take account of smaller profitability and margins of bingo versus casino (and other forms of gambling) as bingo is estimated to receive just 2% of gross gambling spend in Ireland.
The Bingo Association would like to see more definitive grades of bingo operations such as community/charity bingo (small stakes and prizes) to professional operations with substantial investment in dedicated premises, facilities and services (higher stakes and prizes) and various levels in between for different size venues, locales and temporary events.
3.11 Hours of business
Hours of business was raised by many submissions with certain concerns raised about the effect on the viability of smaller businesses, the position vis-à-vis online operators and the requirement to close for two days a year.
Specific comments include the Irish Amusement Trades Association (IATA) assertion that the proposed hours for gaming arcades and amusement arcades (Schedule 1) are too restrictive particularly in the case of city based businesses which currently operate 24 hours. Their recommendation is that each application should be decided by the OGCI based on the applicable demand for the service in a given area. This view was reiterated by the Licenced Gaming Association of Ireland (LGAI). The LGAI also submitted that the proposed opening times for a Category 2A Licence (Gaming hall/ arcade) and the opening for a Category 2B Licence (Amusement hall/arcade) are too restrictive and does not take into due consideration competition from similar machines available through online operators 24/7. The Gaming and Leisure Association of Ireland (GLAI) suggested that the restriction on opening hours for casinos would have no social benefits as all forms of betting and gaming are available online 24 hours a day. They recommend that land based casinos should be able to operate 24/7.
The Irish Bookmakers Association (IBA), noting that Head 53 provides for licensees to close their business on Christmas Day and Good Friday, suggested clarity is required in relation to whether this restriction will apply only to land-based gambling premises, or also to the provision of remote forms of gambling.
For online operators, the issue of potential closure on Christmas Day and Good Friday was questioned during stakeholder presentations to the Joint Committee on 2 October. The GLAI and Paddy Power stated that attempts to restrict online use (if that is the intent) based on resident territory “is not completely effective.” Paddy Power stated that “it is very difficult to police the internet and extremely difficult to try shut it down for particular periods of time….in practice, it‟s quite hard to operate.” On this issue, the Licensed Gaming Association of Ireland (LGAI) submitted that gaming / amusement arcades remain open as they currently do on Good Friday.
Bet Beware stressed that the licensing arrangements as proposed would extend operational hours (07.00-22.00) for land-based bookmakers and as such recommends a „two-tier‟ licence scheme be implemented to accommodate those who wish to trade at current levels and those who wish to trade for longer through an „extended hours‟ fee.
3.12 Advertising, promotion and sponsorship
Advertising (Head 72), promotion (Head 73) and sponsorship (Head 74) are of particular concern to stakeholders. The Gambling and Leisure Association of Ireland stated that “rules applying to advertising and gambling should apply to all sectors equally”. Paddy Power
stated some particular reservations with the principles governing advertising and gambling in particular (Head 72 (3)) which they contend to be subjective. In response, they stated:
“…we believe this is something that would be better dealt with a Code of Practice developed by the OGCI or the Advertising Standards Authority for Ireland instead of being includes in a Ministerial Order or indeed in primary legislation.”
On the issue of promotion (Head 73), Paddy Power referred to promotional restrictions, in particular where information classed as „promotion‟, inter alia, cannot be made available for a period exceeding 12 hours prior to an event (for a remote/online operator) or on the event day itself (for land based operators).
The Irish Bookmakers Association also questioned the 12 hour limit for remote operators. More generally, the Remote Gambling Association (RGA) recommends early engagement between the OGCI and its licensees “to consider how best to apply the new advertising regime in a way that is both practical and effective.”
With regard to Head 73, the Licencing Gaming Association of Ireland is supportive of the proposed format, outlining that its members are „totally‟ opposed to direct marketing of gambling events by way of direct communication to individuals. On these issues, Bet Beware has stated its view that the concept of „happy hours‟ where prevalent must be discontinued and the message „Betting Could Damage Your Pocket‟ be included on all promotional material, as with tobacco products currently.
Regarding sponsorship, the RGA recommends that the sponsorship rules ((Head 74) should not seek to deny funding to professional sports in particular.
3.13 Safeguards/staff training
Part 6 (Heads 66-76) deals with operational safeguards which operators as licence holders are obliged to provide to customers.
Under Head 50: Attaching Terms and Conditions to a service licence, operators are required to provide adequate staff training. Specificity on this is provided under Head 66 (c) which states that the “licence holder shall identify the measures, including staff awareness and training programmes, to be implemented to address the potential risk or risks” at regular intervals.
Several submissions dealt with the necessity under the General Scheme for training of staff in terms of recognising problem gambling and at-risk customers. Aiséirí (the Cahir, Tipperary
based addiction treatment centre) in particular welcomes this in its submission. As Aiséirí suggests:
“This alone may help in the reduction of pathological gamblers as we recognise that a small cohort of the gaming/betting industry‟s customers, contribute a disproportionate amount of their profits.”
APPENDIX A – TRANSCRIPTS APPENDIX B - SUBMISSIONS [Published in separate document]
