The gambling industry is booming and its lobbyists argue that the legislation of casinos and betting terminals would mean a bonanza for the State's coffers. In the first of a four-part series, we ask whether we may be embarking on a dangerous and unpredictable game
IN THESE TIMES of economic gloom and doom, let's welcome a little good news now and again, such as the opening of Ireland's 50th casino or the record spending by Irish punters at the Cheltenham Festival (more than €50 million in a week). Or how about another bumper year for the National Lottery? Or the handsome growth in licences awarded for amusement arcades and machines? While the rest of the economy appears to be going down the tubes, the gambling boom simply continues to gather pace. On average, Irish people are estimated to bet about €5 billion a year - that's €14 million a day or €10,000 a minute.
Gambling, now far from its roots down shady backstreets, has gone mainstream. Online betting portfolios are almost de rigueur for self-respecting young males these days, and Texas Hold 'Em events are sprouting throughout the land.
Never mind that casinos aren't actually legal, that no one can remember when the bookies last lost at Cheltenham, that the odds of winning the National Lottery are longer than an elephant's memory and that amusement-arcade games such as slot machines are supposedly banned in more than 50 per cent of the country.
As the tide turns against two other hugely popular addictions, smoking and drinking, gambling faces an altogether rosier future, with less legal restriction and a smaller tax burden than ever before.
The Government gives more money to horse racing than the current funding for all other sports supported by the Sports Council, a subsidy amounting to €38 for everyone who attended a race meeting in 2005. It has slashed the excise duty on betting four times in seven years and no VAT applies. The National Lottery, owned by An Post, enjoys a stranglehold on the lottery sector, which may not be entirely unrelated to the fact that the money it raises for good causes shores up the gaps in Government funding.
The scene is riddled with contradictions. Gaming machines are banned in most of Dublin, but you can win up to €3,000 on touchscreen roulette in some clubs in the city. Under-18s are banned from most forms of gambling but can bet freely on the Tote. The Government actively discourages some forms of gambling yet promotes others, such as horse racing, greyhound racing and the National Lottery.
Rampant profits and massive expansion in recent years have by no means sated the appetite of the gambling industry. Now formally unleashed from the doghouse in which it was tethered for years by a primmer society, Irish gambling wants to use its newfound respectability (now even Dermot Desmond owns a gaming and card club) to expand further and wider into society.
The industry's agenda includes the legalisation of casinos, the promotion of gambling as a tourism product to while away those rainy days down by the sea, longer opening hours for bookmakers and the provision of FOBTs (fixed-odds betting terminals) - described by Pat Rabbitte as the "crack cocaine of gambling" - in every betting shop, casino and maybe pub in the country.
Up until recently, liberalisation was a nettle politicians were slow to grasp. The case for updating the 1956 Gaming and Lotteries Act is unarguable - as Deirdre Kilroy, a partner with law firm LK Shields, says, the Act is a "blunt instrument" that never anticipated computers or online gambling. But, fearful of a public backlash, the politicians have done nothing because that would also involve regulating the burgeoning casino sector, modernising the way amusement arcades are run and tackling online gambling. Memories are still scarred by the botched plan to build a super-casino on the old Phoenix Park racecourse, a scheme torpedoed by massive public opposition in west Dublin.
Successive ministers for justice have sat on a report that recommends the legalisation of casinos, but there is now a sense of change in the air. With Exchequer revenues down, the search is on for new sources of income. Legalising casinos and FOBTs would mean a bonanza for the State coffers, or so the industry claims. As Kilroy points out, overseas operators are often put off by the lack of clarity in our legislation, but if Ireland was to become an international hub for the gaming industry, a huge number of jobs could be created. The lobbying on FOBTs in particular is reaching fever pitch. The new Taoiseach is perceived to be a man who "understands" the betting industry and the money it could raise for a hard-pressed Exchequer.
But if change does come, it will happen in a vacuum. As Liam Delaney, a lecturer at UCD's Geary Institute, points out, "nada" research has been carried out into the effects of gambling on the individual and society. The issue has seldom featured in political debate, a fact which prompts Delaney to remark: "Everyone has moved to the 'what should be done?' before they have even estimated the 'what's the extent?' of gambling."
NO ONE CAN point with accuracy to the harm done by gambling because no studies have been done on the subject in this country. Horse racing has been popular for centuries and betting shops were legalised 80 years ago, but no one has seen fit to study the possible negative effects of gambling. All we can do is look at international studies and extrapolate.
These indicate that about 1-2 per cent of the population has a weakness for compulsive gambling, though Delaney suggests the Irish figure could be higher because of our cultural influences. The figure might seem small, but it would still amount to at least 40,000 Irish people with an addiction to gambling.
The lack of hard information extends to the size of the gambling market. It is not known for sure how much money Irish people gamble every day. We have dependable figures for the National Lottery, racecourse/Tote betting and off-course betting, but the sums gambled online and by phone, in casinos and in amusement arcades are anyone's guess. It's a nightmare for the taxman and an opportunity for the money-launderer, and if there's one thing everyone agrees upon, it's that the amounts involved are growing constantly.
Market analysts Merrion Landsbanki reckon Irish punters lose €1 billion a year, and place Ireland 10th in Europe for the size of its gambling market. The company puts the rapid growth of the market down to favourable tax changes, a growing population, the expansion of online betting and "a growing cultural acceptance of gambling from the Irish population".
This is good news for the industry, but less so for the Irish punter. The average Irish adult loses almost €300 a year on gambling, the third highest figure in Europe behind Finland and Sweden.
Small wonder, then, that we have proportionately more betting shops than almost anywhere else (1,110 in the Republic, or almost twice as many per head of population as the UK) or that the number of casinos operating has increased from eight in 2002 to more than 50 today (not bad for a business that is, more than likely, illegal).
It may be that we ain't seen nothing yet. The big global gaming companies have been eyeing up Ireland for years, waiting for the right moment to make their entry.
"I've had some of the biggest industry figures calling me up, seriously wealthy people who've said, 'We're definitely doing a casino in Ireland, but not till the ink is dry on the legislation'," says JJ Woods, an Irishman who brought casinos to Russia after the fall of communism.
Woods has already set up a number of gaming clubs in his own right or on behalf of others, but he knows these are small beer compared to what might happen if casinos are legalised. Enthusiastically, he runs through the possibilities: casinos targeted at women and couples, resort-style casinos, a combination of golf and gambling, and so on. But should Ireland be opening up the gambling market even further, just as it is placing more and more restrictions on two other addictive pastimes, drinking and smoking?
Patricia Casey, professor of psychiatry at UCD, questions whether it is necessary to legalise casinos and worries about the effect of bringing a highly visible and glamorous form of gambling into mainstream Irish culture.
"A little bit of gambling is okay," she says. "It's always been around. Horse racing is as much about cheering a horse on as betting on it, but casinos are purely about gambling and will hit the small, vulnerable minority first. There'll be grief, I would say."
Because of concerns such as these, some in the casino business are in favour of regulation.
"Regulation is a good thing. Anyone who is scared of it doesn't have the best interests of everyone at heart," says Thomas Alcorn, an international casino consultant who has run the rule over Ireland on behalf of wealthy clients.
Alcorn contrasts the "squeaky-clean" operations in which he has been involved in countries such as the UK or South Africa (where casinos are actively monitored by regulatory authorities, the police and the taxman) with lax jurisdictions where such controls are absent - he mentions Kenya.
"You do have dodgy characters in this business in some countries," he says. "There are guys I wouldn't shake hands with in case I lost a finger. It's an industry that does attract unsavoury characters and that's why you need regulatory bodies."
For Alcorn, running a gambling business is about the long term. "We don't want to take your last 50 bucks and send you home penniless to your wife and children, because then you can't come back."
He claims to have chased people out of casinos for gambling too much.
David Hall, chairman of the Gaming and Leisure Association of Ireland, lists the measures his club has introduced to stop problem gambling. These include the keeping of computerised records, the recording of transactions higher than €1,000, a self-exclusion policy for customers who are gambling excessively and a limit of one use of a credit card per visit.
It's true that the atmosphere in Dublin's Fitzwilliam Club on an average Saturday night appears relaxed by the standards of the city outside. Players range in age from twentysomethings to pensioners and, with no alcohol served, tea and minerals are the refreshments of choice.
There are no windows or clocks in the main hall, a converted church, and the last poker game won't finish until 7am. One Chinese man is putting down €500 a time on a game of pure chance, but most players are in for considerably smaller stakes. Both staff and players are heavily supervised, but the atmosphere is peaceable.
Yet Alcorn hasn't been impressed generally by his visits to Irish casinos and amusement arcades. He is critical of the lack of controls at the entrances to some businesses and the poor standard of training of staff. In some arcades, he was shocked to find children playing slot machines, while in others he saw gaming machines which other countries had refused to license because their payback could not be proven.
"I wouldn't put a cent into those machines until they had been 100 per cent checked by a government body," he says.
THE UK'S DECISION not to approve a series of super-casinos represents a business opportunity for Ireland, according to Alcorn's wife, Joan.
"By opening resort-style casinos open to all the family, you'd get a lot of business from Britain," she says. "You have a beautiful country for tourism, but you don't have the weather to attract people all year round."
Current speculation holds that the Government will approve the licensing of small-scale casinos with strict entry requirements, but the Alcorns claim this would be a mistake.
"This kind of club breeds compulsive gambling. It's for people desperate to win, rather than wanting to have fun. In the end, it leads to people losing everything," says Joan Alcorn.
But, in any case, is a Government that is so supportive of the horse racing and greyhound industries and the National Lottery capable of treating the casino sector fairly? Like other casino owners, David Hall bristles with the perceived unfairness of it all, of how his sector has had to wait so many years for legislation or support.
"We protect horses and dogs and build them up, but it's still gambling," he says. "Is that not selective?"
Series continues next week:
Monday:Gambling, casinos and the State
Tuesday:The social cost of gambling
Wednesday:Internet gambling
