Risks and Rewards: Highlights of Gambling Regulation Bill 2022
The much anticipated first draft of the Gambling Regulation Bill (the “Bill”) was published in December 2022 and as expected, it proposes major reform and consolidation of gambling laws in Ireland.
It is important to note that the Bill is largely principles based and that the Gambling Regulatory Authority of Ireland (“GRAI”), which is to be established under the Bill, will have broad powers to publish further guidance and codes of conduct. Apart from the modernisation of the licensing system and the introduction of robust enforcement measures, which will be largely welcomed by the industry, the core focus of the Bill is on the protection of vulnerable persons, including children and those experiencing gambling addiction. While these measures are for the greater good, they will undoubtedly present challenges for gambling operators who must now explore how to bring their current activities into compliance. This briefing sets out some highlights of the proposed Bill, particularly from the perspective of gambling operators.
A dedicated regulator for the first time
The Bill establishes the GRAI, which will be responsible for regulating the gambling industry in Ireland. The GRAI will replace the medley of State bodies that have been involved in various aspects of licensing and regulation to date and will hopefully create a more efficient “one stop shop” style ecosystem.
Among the GRAI’s responsibilities will be licensing, maintaining the new National Gambling Exclusion Register, maintaining the new Social Impact Fund (to which licensees will contribute), monitoring compliance with the new legislation and enforcing its provisions.
The Government appointed Anne Marie Caulfield as the CEO Designate of the GRAI in Autumn 2022. We see this as further evidence of the political desire to ensure the GRAI is up and running promptly once the Bill is enacted.
Importantly the GRAI is expected to be self-financing after the initial three years of operation, so we may see the revision of the licensing fee structure on that basis.
Changes to categories of gambling licences
The Bill proposes to revise the current licensing structure so that there are three licensing categories:
Business to Consumer Licences
This category is comprised of the licences we are familiar with under the current regulatory system, i.e. betting licences, gaming licences and lottery licences. Operators will be able to apply for “in-person”, “remote” or “in-person and remote” versions of these licences. This is the first time that gaming and lotteries will be specifically permitted and regulated in an online context in the State.
Business to Business Licences (New)
This is a new category of licence that will see those who supply gambling products and services to businesses being licensed for the first time. The Bill provides that on commencement of this part of the legislation, those who wish to continue selling and supplying in a manner covered by the B2B licence, will be required to apply for a licence.
Charitable/Philanthropic Licences (New)
This is also a new category of licence and will be particularly welcomed by those in the not-for-profit sector as it should reduce the “red-tape” required to carry out fundraising activities. It will consist of a single licence, referred to as a “gambling licence for a charitable or philanthropic purpose” that will authorise the carrying out of games, lotteries and some, but not all, categories of betting activities.
Opening up the remote gambling market
While in recent years we have seen the introduction of remote licensing for bookmaking and betting intermediary activity, the Bill introduces remote gaming and remote lottery licensing. This will finally bring Ireland’s gambling regulation landscape into the twenty-first century and should attract more remote operators to the Irish market.
To safeguard such remote gambling, the Bill imposes specific obligations on licensees of remote gambling licences, including the requirement on the licensee prior to providing gambling activity by remote means to ensure, for example, that the person using such services has opened a gambling account with the licensee and that the licensee has made an entry in the register of account holders. There is also an obligation to maintain a register of account holders and to provide the relevant terms and conditions of the gambling account to the account holder.
As is evident throughout the Bill, there is a constant emphasis on the protection of children. A licensee holding a remote gambling licence will have an obligation to display a hyperlink to a parental control programme on the home page of the website of the licensee and cause it to be displayed on each online platform where a relevant gambling activity provided by the licensee by remote means can be accessed.
The Bill further imposes a prohibition on the provision of gambling activities on certain days or times and the GRAI may prescribe further regulations in that respect.
Advertising sponsorship and promotional restrictions
A person who is not a licensee or an employee or an agent of a licensee must enter into a written agreement with the relevant licensee in order to advertise gambling activity. However, the Bill fails to give any colour as to what these written agreements must contain.
The Bill prohibits advertising via on-demand audio-visual media services or other electronic communication unless the recipient has both subscribed to the media service or electronic communication and has given their explicit consent to the advertising.
The media and communication services mentioned above must also provide an immediately accessible “blocking facility” which will allow recipients of advertisements to prevent receipt of that advertisement and other similar advertisements. While the blocking of a particular advertisement might be easily implemented, it is unclear what the parameters of “similar advertisements” are.
Advertising and children
In keeping with the Bill’s ethos of protecting those most vulnerable, the Bill prohibits advertising which portrays gambling as attractive to children, condones participation of children in gambling, encourages or causes children to gamble, or exploits the vulnerability of children.
In addition to regulating advertising to protect children, the Bill also contains prohibitions on advertising which may cause or encourage excessive or compulsive gambling or mislead the public as to the societal and/or financial benefits of gambling.
Advertisements will also be required to be clearly identified as gambling advertisements and must contain specific information including details of the licensee, a statement that children are prohibited from participating in gambling activities and a warning around excessive gambling.
Placement of Advertisements
Gambling advertisements on television, radio and on-demand audio-visual media services will be prohibited between 5.30am and 9.00pm and the GRAI has the power to create further regulations in respect of the times, places, volumes, frequency and style of advertisements, in addition to the events at which such advertisements may be shown.
Prohibitions on merchandise for children
The new law will see the manufacture, import and sale of branded merchandise (including clothing) that is intended to be worn by children being prohibited and will also ban the distribution of branded merchandise at events that may be attended by children. In that context, branded merchandise is an article which either advertises a relevant gambling activity, bears the name, trademark, emblem, marketing image or logo of a licensee.
Prohibitions on sponsorship in relation to children
The Bill introduces restrictions on licensees regarding sponsorship in relation to events which are mainly attended by or aimed at children. It will also prohibit sponsorship of organisations, clubs or teams in which children are members. Precisely what this means is unclear, for example if a football club has adult and juvenile teams who get sponsorship from different sources, it is unclear as to whether a licensee would be prohibited from sponsoring the juvenile section of the club but not the adult section.
Restrictions on promotion
The Bill contains a section giving the Minister the power to impose restrictions on activities that directly or indirectly encourage participation in gambling activities and “includes a benefit or advantage offered in the absence of relevant payment”. This provision as currently drafted is simply a placeholder for the introduction of restrictions of inducements, however until the time as such regulations are made, it is unclear what impact this will have on gambling operators.
Social Impact Fund
The GRAI will establish and maintain a Social Impact Fund for the purposes of funding research, and initiatives aimed at reducing or eliminating compulsive or excessive gambling. The Fund will be financed by annual contributions from licensees which will be based on turnover. It will be open to organisations who feel they may benefit from the Social Impact Fund to apply for a payment from the fund.
National Gambling Exclusion Register (the “Register”)
The GRAI will maintain the Register which will contain details of individuals who wish to be excluded from gambling activities such as those suffering from gambling addiction. Applications to be excluded from gambling activities will be made directly to the GRAI. However, this is without prejudice to the ability for the person concerned to enter into a direct agreement with the licensee requiring their exclusion.
The GRAI will then contact licensees in writing to inform them of the entry onto the Register. The licensee will then have seven days to refund any money in the excluded account-holder’s account.
There is scope for the GRAI to require licensees to promote the existence of the Register.
Ban on credit cards and credit facilities
The Bill proposes to bring Ireland in line with the UK in prohibiting licensees from accepting credit cards for the purposes of gambling and to prohibit licensees from extending credit facilities or knowingly facilitating the giving of credit in relation to gambling activities.
This is a key measure for the protection of those experiencing gambling addiction issues and has been welcomed by many, including those in political circles. (Notably, this measure does not appear to prohibit the accepting of credit cards in the payment for National Lottery products, as the definition of “lottery” under the Bill excludes the National Lottery.)
Enforceability of gambling debts
The Bill proposes to abolish any rule of law by virtue of which contracts by way of gaming or wagering, or debts arising from a wager are not legally enforceable. This is a long overdue change, which although technically unfavourable to gambling operators, furthers the key focus of the Bill in protecting consumers and those most vulnerable. It also adds further legitimacy to the operation of gambling activities in Ireland which has not been ubiquitously present to date.
Licensees will be required, upon request and within 14 days unless there is an agreement to the contrary, to provide the GRAI with a compliance report to assist the GRAI in determining whether licensees are complying with their obligations. This is without prejudice to the GRAI’s right to request information and documentation from licensees at any time and will be the first time that gambling operators will be obliged to report on their compliance with gambling regulation.
The GRAI will have a number of powers available to it to compel compliance, including the ability to issue non-compliance notices, suspend or revoke licences and seek numerous High Court orders.
The Bill provides for a complaint mechanism whereby a complaint can be lodged to the GRAI in relation to any alleged contravention by a licensee of a relevant obligation.
This will bring clarity to the current situation whereby it is not obvious to whom a complaint should be made in relation to a gambling operator and what enforcement actions can be taken. Again, this provision will serve to provide further legitimacy and order to the Irish gambling industry.
The Bill proposes that authorised officers of the GRAI will have “dawn raid” style powers.
The GRAI will have competence to direct an authorised officer to carry out investigations to ascertain whether a licensee has contravened or is contravening a relevant obligation. Following such an investigation the GRAI will have several options available, including referring the investigation report to an adjudication officer, issuing a notice of non-compliance or entering into an agreement with the licensee concerned.
Adjudication and Sanctions
The adjudication process may result in the imposition of an administrative sanction, including the suspension or revocation of the licence to which the issue relates and other licences held by the licensee, the imposition of conditions on such licence(s) and a financial penalty.
Financial penalties constituting administrative sanctions are capped at the greater of 10% of the licensee’s turnover in the year preceding the decision (or any year in which the act giving rise to the administrative sanction occurred) or €20,000,000.
Such sanctions are subject to an appeals process and will require Circuit Court confirmation.
The GRAI can make an ex parte application to the Court for a temporary order in respect of a licensee where it considers that there is an urgent need to act in order to protect the public or the relevant funds in a Segregated Customer Account.
The Bill introduces a broad range of offences for non-compliance with obligations under the legislation. While for the most part these offences relate to licensees, other persons, such as advertisers may be also be caught by some offences.
For the vast majority of offences, summary conviction will result in a class A fine (currently €5,000) and/or imprisonment for up to 12 months, and on conviction on indictment will result in an unlimited fine and/or imprisonment for up to 5 years. However there are offences for which graver penalties may be imposed.
Those involved in gambling operations should also note that relevant officers and beneficial owners are liable to be proceeded against and punished in their own right where an offence is committed by the licensee with their consent, connivance or wilful neglect.
Next Steps and Implementation
While the Bill remains at an early stage of the legislative process, Minister for State at the Department of Justice, Deputy James Browne is hopeful that the Bill will enter into force in mid-2023, with the GRAI to be established in late 2023. It is worth noting that the Bill is drafted such that a commencement order is required for it to take effect and there is scope for the Bill to be commenced section by section, and even for sections to be commenced for specific purposes. We would welcome more clarity on this as the Bill progresses as lead-in and transitional periods are essential for operators to ensure they are in a position to comply with the various provisions of the Bill.
While the Bill is a largely welcome replacement for the currently outdated and piecemeal regulation, such a radical overhaul to gambling regulation will undoubtedly give rise to challenges for gambling operators. If you need assistance in navigating the Bill, please contact the authors.