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Developments in Irish gambling regulation – a lot at stake?

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Ireland

Ireland will soon see substantial changes in how gambling is regulated.  As indicated in our previous article (see here), these changes could have wide-ranging impacts for gambling operators and participants alike.   
 
Current situation
 
Gambling in Ireland is currently regulated by different pieces of legislation such as the Gaming and Lotteries Act 1956 (as amended), the Betting Acts 1931 to 2015 and the Totalisator Act 1929, among others.  However, the Government has for some time been working on modernising the regulation of gambling, through an Inter-Departmental Working Group on Future Licensing and Regulation of Gambling which published a report to Government in March 2019, culminating in the publication of a General Scheme for the Gambling Regulation Bill (the "Bill") (the "General Scheme").
 
Draft new legislation
 
In October 2021, the Government published the General Scheme. Comprised of some 142 heads (or draft sections), the General Scheme contains six parts.  The Government's Summer 2022 legislative programme lists the Bill as part of its priority legislation.  The Bill has passed pre-legislative scrutiny.
 
If enacted according to the Heads, the Bill will create significant changes in how gambling is regulated.  In particular, it will bring about the following changes:
 
  • Establish a new Gambling Regulatory Authority of Ireland  
This new statutory body (the "Authority") will have seven members appointed by the Minister, one of whom will act as Chairperson. It will also have a chief executive officer, also to be appointed by the Minister.
 
The Authority will have sole responsibility for regulating the provision of "gambling services".This term is defined widely, and covers several activities which are likely to fall within the meaning of "gambling" as it is ordinarily understood.Under the definition, it includes both "betting services" (i.e., services for the placing, making, receiving or acceptance of wagers on events – defined to include sporting events and also "virtual events" (which term is not defined) – and may include a "betting exchange") and "gaming services" (i.e., services required for or comprising a component of gaming, defined as "playing for a stake, monetary prize, progression in a game or other form of reward").
 
  • Provide for a licensing regime in respect of gambling activities  
As part of its regulatory activities, the Authority will license gambling services and activities.Licences envisaged under the General Scheme include business-to-consumer licences; business-to-business licences; and charitable/philanthropic cause licences.All such licences will be issued, and may be varied, by the Authority on application by prospective licence-holders.Decisions in respect of licence applications will be appealable to the Gambling Regulatory Appeal Board, which will also be established under the Bill.However, notably, the National Lottery – which is subject to separate regulation by the Regulator of the National Lottery – would not, under the General Scheme, fall under the scope of the Authority.
 
The Authority's remit will also cover the advertising and sponsorship activities of gambling services; developing safeguards to protect individuals from harms of problem gambling and the effective protection of users; and acting as competent authority for anti-money laundering/counter-terrorist financing in respect of providers of gambling services.
 
Licensees (other than holders of charitable/ philanthropic cause licences) will also be required to contribute to a "Social Impact Fund", administered by the Authority, which would seek to counter-act the ill-effects of problem gambling.Contributions will be based on factors such as the licence holders' turnover and the size of their operations, and failure to contribute (or withdrawal of contribution) will attract penalties including potentially a fine or revocation of a licence.
 
  • Provide the Authority with enforcement powers  
In addition to its licensing activities, the Authority will also be given wide-ranging powers of enforcement.These include the power to apply to Court for an order to prevent or block access to remote or online services; and the power to carry out tests or audits on providers of gambling services in an undisclosed manner (i.e., without advance notification).
 
One of the most significant powers will be the power to impose "administrative financial sanctions" of up to EUR 20 million on an individual or, in the case of non-individuals such as corporate entities, up to EUR 20 million or 10% of relevant turnover (whichever is the greater). The imposition of such sanctions is subject to confirmation by the High Court.
 
Next Steps
 
According to the Department of Justice's "Justice Plan 2022", the Department aims to publish the Bill in the second quarter of 2022, with enactment targeted by the end of the year.  At the same time, before year-end, the Department hopes to finalise the responsibilities for the chief executive and Chairperson of the Authority, with its activities commencing in 2023. 
 
Comment
 
The Bill, once enacted, is likely to have a major impact on businesses and will also enhance consumer protection in this area.  The Bill is notable in that it seeks to regulate not only the core area of the gambling services provided, but also the advertising and sponsorship activities of such service providers. 
 
Of interest also is the ability for the regulator to impose administrative financial sanctions.  This mirrors similar powers given to other regulators, including the enhanced enforcement powers proposed to be given to the Competition and Consumer Protection Commission under the Competition (Amendment) Bill 2022, and would also align with the powers given to the Central Bank under Part IIIC of the Central Bank Act 1942 (as amended).
 
Finally, a close eye should be kept on how the legislation varies as it makes its way through the legislative process.  Interestingly, some industry operators have recently called for the operator of the National Lottery to come under the remit of the Authority.  It will be interesting to see if this – and any other changes – are made between now and the Bill's enactment.

Written by: Barry Fagan and Eoin O Cuilleanain

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