Odds shortening on creation of Irish gambling regulator

Irish bookies and other gaming operators should start preparing for a new regulatory regime. That's the belief of Pinsent Masons senior associate Dermot McGirr who says the sector, which is estimated to have an annual value of between € 6 and € 8 billion, is in line for significant regulatory reform.

"The sector is currently overseen by a mixture of the Revenue Commissioners, various government departments, local authorities, the District Courts and An Garda Síochána", he notes. "There are now developed proposals in place to establish a self-financing, independent gambling regulator which will be responsible for licensing and regulating all aspects of the gambling sector in Ireland. "

Proposals have been on the table for a number of years but now appear close to becoming reality. “Plans to update Irish gambling laws have been in place for years, but have failed to materialise”, says McGirr. “Proposals for reforms to the licensing and regulation of gambling were outlined in draft legislation by the government in 2013.

However, those proposals were not materially advanced until early 2018 when the government announced its intention to streamline the existing fragmented and longstanding legislation currently in force.”

The government set up a working group to assess if the 2013 proposals remained fit for purpose and the group has now recommended that most of those proposals should be taken forward. It has also added a number of further proposals.

New licensing regime

The reforms proposed would see the establishment of a gambling regulator along with a new licensing regime for operators based at physical locations as well as those serving Irish consumers online. They will also introduce tougher consumer protection standards, new anti-money laundering controls and the establishment of a new independent regulatory authority to oversee and enforce compliance.

“Under the proposed reforms, gambling operators should expect stricter licensing requirements and conditions”, McGirr adds. “The new gambling regulator will also set the levies and fees to be paid by operators, which would ultimately ensure the body becomes self-financing. Special anti-money laundering and match fixing units within the new regulatory body are also proposed.”

That latter recommendation will certainly be welcomed by sports fans.

Another recommendation which will be greeted warmly by consumers relates to the enforcement of gambling debts.

At present, these are treated as “debts of honour” and are not contractually enforceable in the courts. This means consumers often feel at a disadvantage when it comes to a dispute with a bookie. The group has proposed that an alternative dispute resolution mechanism be developed by the new regulator to “settle disputes between consumers and operators”, and that the reforms should also ensure gambling wagers are contractually enforceable. “This is a significant departure from the current situation”, McGirr notes.

UK Gambling Commission

“The working group’s report suggests that the new Irish regulator will be closely modelled on the UK Gambling Commission, a body which is widely regarded as a world leader in gambling regulation”, he adds. “This approach makes sense when we consider that the characteristics of the Irish and British gambling markets are so similar with a focus on sports betting and that there is significant overlap in terms of gambling operators across the two jurisdictions.”

If the new Irish regulator follows the lead of its UK counterpart what can Irish operators expect in terms of enforcement action? “The UK Gambling Commission is well known for being an active regulator and, particularly in recent years, it has taken a robust approach to issuing fines and even revoking gambling licences altogether”, he says. “For example, in 2018 three operators were required to pay a total of just under £14 million as a result of a failure to put in place effective safeguards to prevent money laundering and keep consumers safe from gambling-related harm.

In 2018 Paddy Power Betfair paid £2.2 million (€2.5 million)in a regulatory settlement with the UK regulator, a proportion of which was returned to the Birmingham Dogs Home which had funds stolen from it by a "problem gambler" who subsequently used the funds for gambling."

It is expected to take at least eighteen months for the new body to be established. “Irish gambling operators would be wise to use this period to monitor developments closely, including the impending Gaming and Lotteries (Amendment) Bill, and to ensure that regulatory compliance becomes, if it is not already, a board level issue”, McGirr concludes.