On 14 April 2015, The Minister for Finance signed a commencement order for the Betting (Amendment) Act 2015 (the "Act"). The Act came into operation on 15 April 2015, with several aspects of the new regulatory regime set to commence on 1 August 2015.
PURPOSE OF THE ACT
The main purpose of the Act is to bring betting intermediaries (i.e. betting exchanges) and remote bookmakers (i.e. internet and mobile betting providers) within the scope of the existing licensing regime, while it will extend the existing 1% turnover tax on land-based bookmaker's activities to online and mobile bookmakers. The Act also means that the 15% commission tax for betting exchanges, which was initially tabled in 2011, can now be finally implemented.
MAIN FEATURES OF THE ACT
Bookmakers and Remote Bookmakers.
- The current licencing regime for bookmakers is being extended to include "remote bookmakers". In the context of the Act, "remote means" includes the internet, the telephone and telegraphy (including wireless telegraphy). The initial fee for a remote betting licence will be €10,000.
- A licencing regime is being introduced for remote betting intermediaries. A remote betting intermediary is "a person who, in the course of business, provides facilities that enable persons to make bets with other persons (other than the first mentioned person) by remote means". This will cover betting exchanges such as Betfair.
- A "standard" (i.e. traditional or non-remote) bookmaking licence will now also allow limited remote betting. The value of remote betting on a standard bookmakers licence may not exceed the lower of €250,000 or 10% of that bookmaker's yearly turnover.
- The Act for the first time defines the term "bookmaker" in Irish statute law as "a person, who in the course of business, takes bets, sets odds and undertakes to pay out on winning bets". This will cover traditional fixed odds bookmakers as well as those offering spread-betting facilities. It would not typically cover casino or other gaming services which remain largely prohibited under the Gaming and Lotteries Act 1956.
- For the first time, the Act permits a company to hold a bookmaker's licence or a betting intermediary's licence and it introduces some additional compliance and enforcement measures applicable to corporates.
Prohibitions on unlicensed betting operations
- The Act makes it illegal to offer betting services (including intermediary betting services) over the internet to customers in Ireland without a remote bookmaker or remote betting intermediary licence. The existing prohibition on operating a bookmaker's premises without a license remains in place.
- Sanctions include a class A fine (currently €5,000) on summary conviction. A conviction on indictment carries a penalty of a €150,000 fine or imprisonment for a term not exceeding 5 years or both. The Act provides for fines of up to €300,000 for repeat offenders. Summary proceedings may be brought by the Revenue Commissioners.
- The Act also provides for prosecutions in absentia, in order to cater for prosecutions against overseas bookmakers who fail to obtain an Irish licence and subsequently fail to present themselves before an Irish court, with procedures laid down to enable a trial to proceed as though the accused had entered a not guilty plea.
- It is also illegal under the Act for a person to falsely hold himself out as being a licensed bookmaker, remote bookmaker or remote betting intermediary. The sanctions are similar to those for illegally offering betting services, with a maximum fine on conviction on indictment of €100,000, or €250,000 in the case of repeat offences.
- The Act makes it illegal to advertise an unlicensed bookmaker or remote bookmaker in Ireland, to provide internet services to an unlicensed remote bookmaker, or to sell or cause to be sold to the public a product that bears the name or logo of an unlicensed bookmaker.
- In such circumstances a compliance notice may be issued by the Revenue Commissioners which may be appealed to the District Court. Failure to comply with a compliance notice is an offence punishable on summary conviction by a class A fine or a maximum term of imprisonment of 6 months, or both, or on conviction on indictment a maximum fine of €50,000 or a maximum term of imprisonment of 2 years, or both.
- Criminal liability of companies extends to its officers where offences are committed by a company with their "consent or connivance".
The Licensing Process
The licensing process requires:
- That each licensee or
"relevant officer" must be:
- in receipt of a certificate of personal fitness;
- in receipt of a tax clearance certificate; and
- The payment of the appropriate excise fee (€10,000 initial licence fee).
- A licensee / company must also be in receipt of a certificate of suitability of premises where relevant.
Certificates of Personal Fitness (COPF)
- The requirement for an individual who wishes to become a licensed bookmaker to apply to the authorities for a "certificate of personal fitness" continues and is extended to applicants for remote licences created by the Act.
- The Act distinguishes between applications for certificates for a bookmaker's licence or remote licences. In the case of bookmaker's licences, Irish resident companies are subject to a local "certificate of personal fitness" requirement from a local Superintendent of the Garda Siochána (Irish police) while non-resident companies are required to apply directly to the Department of Justice and Equality for their certificates of personal fitness.
- Irish companies will be deemed to be ordinarily resident at their registered office while an overseas corporate will be deemed to be ordinarily resident at its principal place of business.
- In the case of persons applying for a remote bookmaker's licence or a remote betting intermediary licence, all applications for a certificate of personal fitness are made to the Department of Justice and Equality, irrespective of residence.
Who needs a COPF?
- It is unclear exactly who must apply
for a COPF. The definition of a "Relevant Officer" in the
Act considers the possibility of three classes of persons,
- a person who exercises control in relation to the body corporate;
- a member (including the chairperson) of the body, or the board or board of directors of the body, or any other person acting in such capacity; or
- the managing director or CEO of the body, or any other person acting in such capacity.
- However, Section 7 of the Act suggests that in relation to a body corporate, all relevant officers must apply for a COPF. Current Department of Justice and Equality website guidance indicates that a COPF will only be mandatory for a person who exercises control in respect of the body corporate. Further clarity is likely to emerge once the initial phase of licensing commences.
- The application process for the COPF requires that an applicant register as a Data Controller with the Irish Data Protection Commissioner ("DPC"). Given that the regulations governing DPC registration would not necessarily otherwise apply to bookmakers, it remains to be seen how the DPC will process such applications.
Application process for a Certificate of Personal Fitness
- A notice must be placed in two daily newspapers circulating in the State between one month and 14 days before an application for a COPF is made. The Gardaí / Department have a maximum of 56 days to consider the application and to notify the Revenue in writing of its decision.
- The COPF is only valid for 21 days from its issue and so a licence application must be made within that timeframe. Where a licence then issues on the basis of a COPF, the certificate is valid until the expiration of that licence.
Refusal of a COPF
- The grounds for refusal of a certificate are (a) financial circumstances (b) the existence of a relevant consideration, or (c) failure to comply with a request for information during the application process.
- "Relevant considerations" are listed in section 6 of the Act and include (a) prior gambling, tax or theft convictions, (b) where a previous licence or COPF was revoked, (c) where a licence holder unreasonably refused to pay sums due on a winning bet, or (d) where a bookmaker's premises was operated in a disorderly manner which caused loitering.
- A certificate may also be revoked by the Department of Justice and Equality if a ground for refusal arises subsequent to the issue of a certificate. It is an offence to give false or misleading information to the Gardaí or the Department during the application process for a COPF.
Appeal of Refusal or Revocation
- A person or relevant officer who has been refused or has had revoked either a COPF or a certificate of suitability of premises has 14 days to request the Superintendent / Department of Justice & Equality to provide reasons for the refusal in writing.
- On receipt of such reasons, a person has a further 14 days to appeal the refusal to the District Court, on notice to the Revenue Commissioners and the Department of Justice / Superintendent as appropriate. No further appeal lies from the District Court.
Tax Clearance Certificates
- A tax clearance certificate is also required for each licensee and each relevant officer. The Act expressly provides for the sharing of information by Revenue, the Department of Justice and the Gardaí. It also provides for the sharing of information with overseas gambling regulators.
Licence Terms and Fees
- Licences for bookmakers, remote intermediaries and licensed bookmaker's premises will be issued for up to 24 months ending on 30 November the following year (for bookmakers) or 30 June (remote bookmakers and remote intermediaries).
- Annual renewal fees are calculated on the turnover of the bookmaker / intermediary.
Registers of Licensed Bookmakers / Bookmaking operations
- The Revenue Commissioner will establish and maintain Registers of Licenced Bookmakers and Remote Bookmaking Operations, which will be publicly accessible.
Betting by Minors
- The Act introduces new penalties for engaging in a betting transaction (including creating a betting account) with a person under 18 years of age. Penalties include a Class A fine or a 6 month prison term on summary conviction, up to €50,000 or 2 years on indictment. However, the original defence in the 1931 Betting Act of having reasonable cause to believe the person was over 18 years survives in the Act.
- The Act also makes it an offence for a person below the age of 18 to represent that they are over that age in order to enter into a bet with a bookmaker (including remote bookmakers) or to enter a bookmaker's premises. A person is liable on summary conviction to a class E fine (€500).
- The Revenue Commissioners are given powers to bring certain summary prosecutions. In addition, the Minister for Justice and Equality has the power to seek a District Court revocation order for non-compliance by a bookmaker, remote betting intermediary or relevant officer.
The Act was commenced on 15 April 2015 and several aspects of the new regulatory regime are due to commence on 1 August 2015. Unlicensed operators providing betting services to customers in Ireland after that date will be committing an offence. The Department of Justice and Equality have published the forms required to apply for a COPF on their website while the Revenue Commissioners have issued guidance on the matter and advised that the appropriate licence application forms will be published shortly.
There are three key things to note from the Irish Act:
- Act now! The Act was originally published in 2012 and has been a long time coming. However, there is very little time for companies to act if they are to ensure compliance by the 1 August deadline, particularly in circumstances where Revenue and Department of Justice guidance is continuing to emerge. While domestic operators have high visibility of the legislation, overseas betting operators and betting exchanges in particular should take immediate steps to commence the licensing application process if they are to meet the deadline.
- Be warned – Sanctions Apply! The Act has been designed to encourage compliance through reasonably modest fees and a low tax rate but it has also addressed some of the concerns of operators that enforcement powers must be robust. There is likely to be significant pressure on the authorities to address non-compliance in early course if the Act is to sustain its integrity and credibility.
- Limited Scope: While the commencement of the Act marks another step in the ongoing reform of the regulation of gambling in Ireland, it is quite limited in scope in that it only applies to bookmakers and betting exchanges. In July 2013, the Government published a General Scheme of a Gambling Control Bill which is intended in due course to address broader forms of gambling such as casino, poker, bingo, pari-mutuel betting, etc. However, that Bill will not progress before the end of the current government's term in Spring 2016 so casinos and other online gaming activities will continue to be largely prohibited in Ireland outside of very narrow confines.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.