Ireland’s gambling bill: Industry concerns, regulator recruitment troubles and what’s next for tax
On the evening of 16 October, Ireland’s Dáil Éireann (lower parliament house) passed a monumental piece of gambling legislation, marking the country’s first regulatory update since 1956.
First presented to parliament in December 2022, the Gambling Regulation Bill seeks to modernise gambling in the country. It creates a regulator and national self-exclusion scheme, as well as tighter restrictions on advertising, licensing and where venues with gaming machines can be based (not within range of a school).
All operators of online or in-person gambling activities or machines will need to reapply for a licence with the Gambling Regulatory Authority of Ireland (GRAI) to continue to provide those services. And licensees will be subject to various new player protection requirements, including a gambling advertising watershed between the hours of 5.30am and 9pm.
Time to modernise
Prior to the new legislation, Ireland’s gambling law was modelled on the UK. “It is very much a jurisdiction that has not seen reform or regulation in a modern sense for a very long time,” says gambling lawyer Carlo Salizzo of Dublin-based firm Matheson LLP.
“There have been various attempts to pass new legislation overhauling that 1950s era legislation. Until now it has been very difficult to do so, given the opposition in Ireland from various key stakeholders, including the racing industry, the bingo halls of the country and many sports clubs who use lotteries.”
Sure, Ireland’s gambling bill will bring the country’s gambling sector up to the standards of other mature markets. But many stakeholders have expressed concerns over various aspects of the legislation. One such concern is that the bill was produced without much influence or involvement from the gambling sector itself, casino and gaming consultant JJ Woods tells iGB.
“Am I frustrated with [the bill]? Yeah, I think that would be the word, because it’s literally [been developed by] people who have absolutely no understanding of the industry,” he says.
The sector is frustrated
Woods is not the only stakeholder to have expressed frustration with the legislation. Flutter, the global operator that evolved from Irish industry success story Paddy Power, is concerned about the introduction of stake and win limits for online gaming, as well as the gambling ad restrictions. But overall, the operator says it welcomes regulation.
“While we support much of what is contained within the new legislation, we believe the way it has been written could have an impact on the future of horse racing in Ireland and drive more players into the open arms of the unlicensed and unregulated black market,” Flutter said in a statement following the bill’s passing.
“However, we look forward to working closely with the new Gambling Regulatory Authority of Ireland to help raise standards across the industry,” it said.
The horse racing sector is concerned with new advertising restrictions which will see gambling ads and marketing banned from tv and radio during the day. This will seriously impact Racecourse Media Group’s RacingTV channel. The group said the ban would render broadcasting in Ireland “economically unviable”. It has said it does not have the resources to adapt its offering to meet these new rules.
Speaking to iGB, gambling trade body the Irish Bookmakers Association says it believes certain sections of Ireland’s gambling bill could benefit from fine-tuning, “to ensure the legislation remains both effective and practical without inadvertently pushing customers towards the black market,” it adds. “We look forward to working with the GRAI to find a solution that further enhances the effectiveness of the bill.”
The IBA has put its support behind the establishment of a national self exclusion register and Social Impact Fund, which operators will be required to contribute towards, to support initiatives helping those who have been impacting by gambling addiction and harms.
Will the industry oppose new regulations?
But it is understood that the sector is unhappy with specific regulations, including €10 stake limits on all games and €3,000 per game win limits. There is also concern that tighter advertising restrictions, including a complete ban on social media advertising, could make it easier for black market operators to attract consumers online.
Both Salizo and Woods believe the sector could push back against the new rules. “It’s possible that we could see a constitutional challenge to the legislation or something like that,” says Salizzo.
“I think given the way the bill is drafted it’s more likely the industry would be looking to challenge it rather than lobby groups that might try to make it stricter. I think it’s also possible that once the authority starts to publish regulations and guidance, those then may individually be looked at and challenged again, possibly before a court [on a] constitutional basis or in a judicial review.”
Salizzo believes public health was the driving force behind the Ireland’s gambling bill. Previous rules did not sufficiently tackle the public health challenges relating to gambling harm, he says. “Certain parts of the government, and in particular stakeholders within the civil service, felt that that the current regime was not the best way to deal with a public health issue as they saw it.
“We saw similar legislation around alcohol a number of years ago and this legislation takes some cues from that legislation and that approach. We have seen this bill put together and passed immediately prior to an election in Ireland,” Salizzo adds. Which is certainly another reason why it so quickly passed through the senate and report stages between May and October.
General election sped up the bill
The bill passed through all 11 stages over the course of 17 months, from its first introduction to the Dáil Éireann in late 2022. It then went through four stages of amendments and debates before it hit the senate in mid-May for another five stages of debate and amendments.
The final three stages of Ireland’s gambling bill, including the last reading and amendments on 16 October and parliament approving the bill, all occurred within three weeks in October. Many believe this is down to pressures to pass the bill before the pending general election in Ireland, which was required to be held no later than March 2025.
Ireland’s prime minister, Simon Harris, planned called for a parliamentary election to take place on 29 November. Parliament was dissolved on 8 November, bringing Harris’ four-and-a-half-year Fine Gael, Fianna Fail and Green Party coalition to a close.
“The reason they sped up [the gambling bill] is because of the election,” says Woods. “But we won’t see anything [concrete] on this for at least another year.”
Timeframe for enactment
Speaking during the final stages of the bill’s passing, its lead deputy James Browne said he expected the legislation to be enacted within the year. “That would certainly be the aim, [although] we can never be certain about these things,” he said.
It’s clear there is a political drive to see the regulations enforced quickly, but Salizzo predicts there will be setbacks in the formation of the regulator, as it may face difficulties in recruiting a full team.
“We are aware that the authority is facing significant difficulties in recruiting and in terms of pulling together quite a large amount of guidance that it will need in order to implement all of the new changes provided in the legislation,” he says. “And so, it’s entirely possible that the timing may in fact be stretched out, although I would imagine that the government is very keen to meet [its target].”
What will the gambling regulator look like?
The regulator’s CEO Anne Marie Caulfield was brought in to lead the sector’s re-regulation in September 2022 when she was appointed CEO designate of the GRAI. She previously served as the director of Ireland’s Residential Tenancies board between 2008 and 2016. The GRAI is seeking a chairman and board members, as well as licensing experts to lead regulations. During the final parliamentary debates, parliament members raised concerns about the role of the regulator.
Deputy Mattie McGrath, during the Dáil Éireann’s final debate on 16 October, expressed concerns over how much power the regulator would have over the industry. “We have regulators for everything, but there is very little regulation going on in many areas,” he said.
But deputy Browne assured the house of the GRAI’s regulatory powers and reiterated that the industry will fund the regulatory entity. “I can assure the deputy that this regulatory authority will not be toothless or fruitless. It will be a very powerful regulatory authority. It will regulate an industry that we estimate is worth €6 billion.
Funded by the sector
“The regulatory authority will be funded by the industry by way of levies. The impact on the taxpayer once it is up and running should be zero. It will not require any exchequer funding. It is necessary for what is a significant industry, which has a very real impact on the lives of people across the country,” Browne said. Gambling taxes do not look like they will change in the short-term, as any update on the current system was not included in the latest finance bill and budget iterations. The former was delivered on 1 October and the latter in November.
Salizzo notes stakeholders are worried they will have to educate the regulator, particularly those in gaming versus sports betting, which is a better understood sector thanks to the influence of the sports and horse racing sectors.
“Stakeholders I’ve spoken to are concerned that they are going to have to educate the regulator on how the industry works, in particular in the gaming sector, I think less so in other sectors where there may be more modern regulatory experience to draw on, but that’s not to say that there isn’t a steep learning curve there as well,” says Salizzo.
Law firm A&L Goodbody acknowledged in a 17 October note that there is no available information on how much gambling licences will cost in Ireland’s gambling bill, but this will likely be a job for the regulator once it is formed.
What’s the deal with tax?
One area lacking clarity for now is the potential tax system for the sector. The bill addressed VAT, which gaming will continue to be subject to. But tax rates are generally formed under the Finance Bill 2024, which passed the final stages of parliament on 6 November. The bill included a number of updated definitions of betting and remote betting duty, but the amount operators will be required to pay was notably not updated. At present, this remote betting duty is a 2% turnover tax.
“The position remains that betting operators must discharge betting duty, while gaming generally remains subject to VAT. The intention seems to be the retention of the status quo for now and an increase to betting duty of 0.5%, mooted a number of weeks ago, was not implemented as part of the recent annual budget,” A&L Goodbody said in its October note.
Lack of interest from politicians in Ireland’s gambling bill
Having spent two decades helping to develop gaming legislation in various jurisdictions, Woods says the perception of the retail gaming sector in Ireland has become particularly negative among politicians and there is concern this could extend to the regulator.
“The approach is all wrong, because casinos are exciting. They’re fun. They make money, and not just for the owners. They also make money for the government. But the Irish approach is negative,” he laments.
Reflecting on the bill passing, Woods believes, based on the number of politicians present in the house while the bill was passed, a seeming lack of interest from politicians in the legislation and sector as a whole. “There were only around six members there to see the bill pass,” he says. “It was so annoying because it’s such a historic event [for the industry].”
Woods says that while the bill writers were right to be focussed on protecting children and vulnerable groups from harm, many of the sector’s positive attributes were not considered, including the funding of key sectors like sports and horse racing.
Holding licensees accountable
Despite the criticism, Salizzo insists there are many advantages coming out of the new gambling rules, including operators being held to certain standards in order to compete against their more mature peers. There are now penalties written in to the regulations and licensees can face fines or lose their licence if they do not comply.
“The penalties for non-compliance can be very, very strict up to and including criminal proceedings in some cases,” says Salizzo. Deputy Browne also ensured the legislation included a clause that provides the regulator with a legal basis to publish details of any contraventions of the licensing regime by licensees, as well as details of the sanctions imposed, to make stakeholders aware of those acting illegally in the market.
It also enables the regulator to seek court orders to block advertising by unlicensed and illegal operators. “It is an important, effective regulatory tool used in other jurisdictions and one that will assure the public it is being protected while allowing the authority to send a message that it is regulating the industry,” Browne said during the lower house’s final debate.
What can Ireland learn from others?
Politicians were quick to congratulate Browne on passing what they deemed a complex but necessary piece of legislation. It remains to be seen how the sector is included in that process of implementing the new rules, but if the gambling industry has taught us anything, it’s that they can remain resilient in the face of shifting regulations.
Ireland has the benefit now of learning from the mistakes of more mature markets and regulations and, particularly in the face of black market proliferation, it could address the problem early on. Gambling taxes and licence fees will play a primary role in how successful the market is and it is crucial the government and the regulator seeks the advice of the industry in deciding these factors. We’ve seen neighbouring European markets hit hard by tax increases which if forcing out operators will ultimately create an unappealing environment for gambling.