Proposed Reform
Rumours abound that new legislative proposals will be brought forward in the next week or two. Such proposals are mooted to include a licensing system for casino clubs and reform of the gaming laws so as to bring them into line with the Third Money Laundering Directive. It is understood that the extent to which reform will impact on the online sector is still under discussion. Following publication of the proposals, the standard consultative process will take place and we will keep you informed of that.

 

ONE COULD BE forgiven for thinking that the 32 recommendations contained in the Casino Regulation Committee's Report on Regulating Gaming in Ireland, published in July 2008, would have spurred the government into action vis-à-vis updating Irish legislation on gambling. Unfortunately it seems that the report, or certainly large sections of it, may be gathering dust.

Plans to assemble a Cross Party Committee, tasked with formulating legislative proposals, have fallen by the wayside. In an interview with the Sunday Tribune published on 8 February 2009, Minister for Justice, Dermot Ahern, indicated that a crackdown on casinos would be announced the following week, and that legislation governing the sector would be introduced before Easter. The article also reported the establishment of a "casino gaming control office" within the Department of Justice.

Third Money Laundering Directive
Two weeks later, no such announcement has been made, and we are still waiting to hear details of intended legislative reform. However, it seems that the government's primary focus will be to ensure compliance with the Third Money Laundering Directive 2005/60/EC ("3 MLD"), which requires that casinos be licensed. This would offer some comfort to operators of the estimated 50 "private members clubs" who are keen to ensure the legality of their operations.  However, it would be regrettable if the government were to adopt a piecemeal approach to regulation of the gaming industry where more radical reform is needed. It is widely accepted that existing laws, principally the Gaming and Lotteries Act, 1956, are long out of date.

Need for a more radical reform
There is a strong argument that reform of Ireland's gaming laws should not be limited to casinos of the "bricks and mortar" variety, but instead should extend to internet-based or "remote" gaming. In reality, anyone can access online casino gaming facilities on their PCs and mobile phones via servers located and licensed outside the jurisdiction. Were such servers to be located and licensed in Ireland, the Irish exchequer could reap the associated economic benefits in the form of the high-end IT jobs and increased fiscal revenue that would be generated. In a report commissioned by the Gaming and Leisure Association of Ireland (and sponsored by A&L Goodbody solicitors and Mazars), DKM Economic Consultants forecasted that casinos and online gaming websites could create up to 13,000 new jobs and generate €280 million in exchequer returns by 2020, but only if the sector is regulated.

Economic opportunity
The current economic situation is forcing all businesses, including operators in the online gaming sector, to look at potential cost cutting measures. In this regard, there is a large degree of interest in Ireland as a potential European base. Our tax regime continues to be favourable. Moreover, we have the requisite IT infrastructure, skilled workforce and English-speaking population.

International operators also want to conduct their activities in a regulated environment, and are reluctant to establish themselves here without some comfort that their activities will not fall foul of any future Irish legislation in this area. The longer the Irish government delays, the more opportunity passes us by.

Casino Regulation Committee Report
Reform, even if limited to land-based gaming will be welcomed, but the regulation of the online gaming sector should not be put on the long finger. The Casino Regulation Committee Report succinctly summarised the value of such regulation:

"There is a massive gap in the market for an innovative technologically sophisticated and focussed EU Member State with experience in international money transfers and a population of English speakers who generally understand the mechanics of gambling to become a natural home to a significant and quality portion of this dynamic industry." *

 

*Page 221