Gambling industry raises 'concerns' over new regulations, watchdog says

Firms concerned about how much licence would cost, among other issues, Gambling Regulatory Authority of Ireland

Given it will be the first time they will be heavily regulated as in other jurisdictions, it is little surprise the majority of responses to a recent public consultation on the new gambling regulations came from those in the gambling industry themselves.

Ireland’s new gambling regulations will be referred to Europe before they can formally come into effect, but already the industry has raised “concerns” over the provisions, the gambling regulator has said.

The Gambling Regulatory Authority of Ireland has to notify the regulations to the European Commission’s TRIS process as required by law.

While such notifications mean a standstill period of three months to allow other member states to comment on the regulations, this can be extended if other countries want to submit detailed opinions on it.

The regular said it was confident its licensing framework for gambling entities was grounded “in robust evidence, public interest considerations and the statutory obligations” it must serve.

Long-sought for by advocates, Ireland’s new gambling laws see the regulator tasked with protecting the public from gambling harm, while acting as the watchdog for the industry in Ireland.

Research it has commissioned has shown the issue with problem gambling in Ireland is much worse than previously thought, and has also shown links between childhood experiences of gambling and problems in adulthood.

As part of its regulatory efforts, it will issue licences for gambling operators to legally operate in this jurisdiction.

This will bring them under the regulator’s purview, with heavy penalties for breaching the rules. Furthermore, gambling regulators will have to pay a fee to get a licence, which will only last a specific duration.

For example, under the regulator’s proposals, a “remote betting licence” for an operator which made €200m or more in revenue would be €400,000. An “in-person” betting licence would cost far less, while still based on turnover.

Given it will be the first time they will be heavily regulated as in other jurisdictions, it is little surprise the majority of responses to a recent public consultation on the new gambling regulations came from those in the gambling industry themselves.

The regulator commissioned an external body to prepare a report on the feedback it received on these and has since published it.

Of the 27 responses to the public consultation, 13 were from gambling firms, five were from industry “suppliers”, three were from industry “consultants”, and three were from a representative body.

A statement from the regulator diplomatically described the feedback it received.

“[We note] that while constructive feedback was provided across the proposed provisions, the majority of submissions, particularly from industry operators, expressed either supportive or pragmatic views on the proposals, including constructive suggestions for enhancement, rather than fundamental objections,” it said.

The independent report said 12 of the submissions expressed concern at how much the licence would cost. A further nine expressed concern at how their turnover would be calculated, while eight hit out at the “perceived unfairness” of the fee calculation system.

The report also detailed the “most common concerns”. This included:

• The application of a turnover model for calculating the total cost of a licence is unfair as it does not take into account the differentiation in margins earned through different operator and game types — it penalises low margin businesses;
• The application fee is prohibitively expensive for small operators vs large operators (that pose a greater risk to the market);
• The application fee for a remote licence is far higher than that charged in Britain, and in certain other European jurisdictions. 

The report noted specific concerns about the viability of small local operators as well as how basing fees on turnover could “threaten the sustainability of specialised betting offerings in the Irish market”.

It also delved into concerns about the “potential compliance cost and overall regulatory costs” firms with face despite the “strong support" for the measures. In other words, concerns abound about how much adhering to its obligations will all cost.

“Many operators and their representative bodies ask for close engagement with the industry as standards are being developed, to enable industry players prepare and build their systems and capability accordingly,” the report said.

Even in welcoming the industry’s “constructive feedback”, the gambling regulator hit back in parts of its response.

“Where concerns were raised, these often stemmed from misunderstandings or divergent interpretations of terms within the act, such as ‘turnover’.” it said.

“The GRAI commits to address the misunderstanding of terms/definitions through guidance documents in the future.” 

It also said the fees it would be setting were “not directly comparable with the UK”, in the face of criticism from some companies, and this was due to the differences in how the regulator is structured and its responsibilities.

“Market size variations, differences in taxation policies and sectors that are regulated by regulators in other jurisdictions also mean that the cross-jurisdiction comparisons are not comparing like-for-like,” it said.

All of this, however, remains a precursor to the actual work getting under way. Consultation, the regulator said, would remain ongoing as it implements its licensing framework to bring the companies under its regime. 

In the UK, the Gambling Commission has in the past dished out hefty multi-million pound fines for breaches of its rules. The regulator here will have similar powers to mete out such penalties.

Given it now has to notify its regulations to Europe, it will still be some time before we see that in action.