All bets are on
GAMBLING in Ireland is a typical hotchpotch of the regulated, unregulated and over-regulated. The legislation that governs the area is the 1956 Gaming and Lotteries Act which aside from some revisions in 2004, remains largely untouched.
Online betting is a free-for-all, while licences are required for arcades and bookmakers. Casinos are theoretically illegal.
In Britain, the Gambling Commission (GC) was set up to regulate the industry, keep out crime and ensure that business is carried out openly and fairly. The GC also provides independent advice to the government and has conducted a number of high-level studies into the nature and extent of problem gambling, including the British Gambling Prevalence Study. All online British gambling ventures also have to be licenced with the GC. Meanwhile, on the other side of the Atlantic, the extent of gambling-related problems in the US led the Clinton administration to establish the National Gambling Impact Study Commission which reported on several aspects of US gambling. Here, there is nothing like the Gambling Commission.
Furthermore, there are no officials in the Department of Justice or in the Department of Arts, Sports and Tourism who oversee gambling in this country. There are also no restrictions on advertising gambling, no government policy on promotion, and betting is not liable to VAT. Excise duty is paid, however, on bets entered into at a betting office. The rate of duty was 10% up to July 1999 and then reduced to 5% by former Finance Minister Charlie McCreevy. It was further reduced to 2% from May 2002 and then 1% from July 2006.
Bets on horse and greyhound racing at the track are exempt from this duty — a move made by the Government to counterbalance their failure to tax the online sector. All tax breaks given to the horse and greyhound racing industries in this country have been based on the proviso that they are an integral part of Irish culture and vital to retaining our world status in horse breeding.
UCD professor of public health, Dr Patrick Wall, likes to contrast the British stance with strong state support here for the horse and greyhound racing industries and the gradual reduction in betting taxes over recent years.
“Is there a big gambling problem out there? We don’t know because we haven’t looked. Are we going to actually start dealing with this problem in 10 years’ time when it’s massive or should we have something like the Gambling Commission that they have in the UK?” Dr Wall asked.
In the late ’90s, an interdepartmental group was appointed to review the Gaming and Lotteries Act and it published its finding in 2000. One of its recommendations was the establishment of a statutory gambling authority, charged with regulation. The report also said the 1956 act was “not appropriate to current needs” but when the Dáil dissolved, the report went with it. Another report was commissioned by former justice minister Michael McDowell in 2006 after he set up a committee, headed by barrister, Michael McGrath, to look at the sector’s irregularity. The European Commission began a study of gambling laws across member states and it was published in 2006. This report called for greater regulation but last November EU Commissioner with responsibility for the internal market, Charlie McCreevy, unequivocally ruled out any possibility of EU regulation of the gambling industry within his term of office.
The Gaming and Leisure Association of Ireland (GALA) was set up by 14 private members’ clubs to lobby ministers and TDs to regulate responsible gambling after questions were raised in the Dáil by Mr McDowell about their “scope for money laundering”.
David Hall of GALA describes casinos as the “black sheep of the Irish betting industry”, arguing they are being unfairly tarred with suggestions of money laundering.
“To some people in this country, going to the bookies is like going to Mass. It’s part of being Irish. Yet, if somebody wants to, they can go into any betting shop in the country and lodge money into their betting account and then sometime later withdraw it as a cheque? Why are we being targeted?” says Mr Hall. None of his member clubs serve alcohol and they have their own voluntary code of practice in place. Punters, for instance, he says, are excluded if they exhibit signs of a “problem”.
Clinical director of the Rutland Centre, Dr Stephen Rowen, is also a fan of regulation: “There isn’t a hint of national concern about gambling. The vast majority of people can control it but there are that internationally recognised 1%-2% who develop mental health problems and face potential ruin. Maybe it’s because gambling doesn’t kill like drink driving or lead to HIV or high crime rates like drug abuse? I don’t know.
“It’s well worth examining if we could regulate online but we would need international treaties or else everything will just move abroad... We also need to regulate casinos as there are people from questionable backgrounds out there operating them. We don’t want mafia types gaining control.”
Most of the casino sector want regulation as international players who want to move into the Irish market won’t invest until there is legislative clarity.
“We have a crazy situation here. The 1956 act makes it extremely clear that any kind of machine or gaming instrument which gives rewards constitutes gambling. It is made extremely clear that gaming is illegal save for under section 13.1, where the local authorities can allow it. This means that in this country, you could get prosecuted for playing a trivia whiz game for money,” says John Roche of the IATA (Irish Arcade Traders’ Association).
One of the biggest gripes of his organisation is how other forms of gambling, and particularly online gaming, can operate without any checks, while gaming arcades are “crippled”, with gaming forbidden in up to 40% of the country. They want a level playing pitch and not to “be regulated in a different way to bookmakers” at the very least. After years of lobbying ministers, some, albeit small, change is under way, with the Miscellaneous Bill 2007 planning to increase the maximum stake in arcades from 50c and payout to €30.
“Before elderly people would come down and play a few machines on pension day, but not since 1986 when the National Lottery began. Everything also changed dramatically with online. You could spend €10,000 on them if you had the credit cards and you won’t have to pay tax. If you spend €3 with us, you will.”
Paddy Power of Paddy Power Bookers throws his eyes up to heaven at the constant referrals to the strides being made by online gambling. It may be the “sexy” area, he said, but it still only constitutes 2% of the overall Irish betting market, with the National Lottery being played weekly by 44% of punters.
“We are dealing with a small number of people when it comes to online gambling. The betting industry in Ireland has contributed more than €180 million (raised from direct betting taxes) over the past four years to the horse and greyhound racing industries. Part of these funds is already applied to the regulation of the industry and to the preservation of the integrity of the industry,” he says.
“The growth in online betting has led to more choice, more accessibility, more convenience, more competition, more control.”
Amid talk about the tourism and economic potential of regulating the casino sector, one episode in Irish history is never far from their mind. US company, Ogden Leisure was intent on establishing a €476m casino, hotel and conference centre at the Phoenix Park in the ’90s. However, it saw its plans decimated when an 20,000 locals objected to the plans and then the Government pulled the plug on licensing the project in 1997 — in advance of the general election.
“There’s a style and sophistication to a real casino. Regulation allows you to improve on the quality of product through enforced staff training and cleanliness. An over-21 age limit is also to be recommended. Owners would need tax clearance and no criminal records. The Phoenix Park debate put the industry back years in this country. And we must move on before it’s too late. Enabling the expansion of casinos in Ireland under a proper legislative framework could be great for tourism and would put an end to the shabby, unprofessional set-ups which give the sector a bad name,” says JJ Woods, owner of the upmarket Silks Casino on Earlsfort Terrace in Dublin.
Mr Woods spent dozens of years in Britain and has set up casinos across Europe and Africa as a casino consultant. On the subject of compulsive gambling, he says: “We don’t want somebody coming in here three times a week. It’s not good for us or them. I will warn people in my club that they are never going to keep on beating me if they are coming in that regularly. The odds are against them. Simple.”
He warns, however, that planned regulation cannot be excessive so as to be impossible to do business. He points to the “mess” made of deregulation in Britain where the government invited in big gambling investors, cleaned up the sector through regularisation, and then hiked up gaming tax.
“Inaction has not been good for this country. We could have got some of the biggest international investors in. Casinos could be a tourist product just like golf courses and race courses, but I wonder if the Government has the balls to really go for that.”
The word now coming from the Department of Justice is that the McGrath report on the gambling sector is due to be published shortly. However, Mr Woods and Mr Hall could be disappointed, as it appears it will long-finger the recommendation of large casino projects until after their economic and social impact is studied. It also will look to charge higher taxes to fund better regulation of the whole sector — casinos, arcades, all gambling.
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