Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The Betting (Amendment) Bill 2013 is designed to provide a regulatory system for remote bookmakers and betting intermediaries, otherwise known as betting exchanges, offering betting services in Ireland, regardless of their location. In addition, it provides for fair and equal treatment of all bookmakers, traditional and remote, and betting exchanges offering services in Ireland.

Provision was made in the Finance Act 2011 for the taxation of remote bookmakers and betting exchanges, subject to a ministerial commencement order. The Bill seeks to bring all remote bookmakers and betting intermediaries into the licensing and taxation regime. The new licensing system for remote operators will serve the public interest in preventing crime and protecting consumers against fraud. It will ensure all businesses offering betting services from Ireland or to persons in Ireland are treated equally and regulated appropriately. The Bill amends the Betting Act 1931 for this purpose and contains the existing provisions governing the licensing of bookmakers.

Members will be aware that the Bill, as published in the Dáil last July, made it unlawful for a person other than a licensed operator to act as a bookmaker or betting intermediary. The Minister for Justice and Equality was tasked with compliance in respect of remote operators. Where an unlicensed remote operator engaged with punters in this jurisdiction, the Bill provided that the Minister for Justice and Equality would issue a notice to that individual or company to cease activity. A person who contravened the terms of such a notice would be guilty of an offence, with proceedings being brought and prosecuted by the Minister for Justice and Equality in respect of remote operators. The Bill, as published, provided that the Minister for Justice and Equality could apply to the District Court for an order directing service providers, including financial institutions, advertisers and Internet service providers, not to provide services for specified unlicensed operators. In the course of the Committee Stage deliberations in the Dáil I brought forward several amendments providing for the temporary assignment of responsibility for enforcement against unlicensed remote operators from the Minister for Justice and Equality to the Revenue Commissioners, pending the establishment of the gambling regulator under the proposed gambling control legislation. The Minister for Justice and Equality and the Garda will retain responsibility for compliance with all other regulatory requirements under the Betting Acts. In this context, Revenue will operate a new model for enforcing licence compliance by unlicensed remote operators. The model will operate as follows. Where an unlicensed operator is accepting bets or commission for betting exchange services from persons within the State, Revenue will issue notice to that operator of the need to become properly licensed or cease to provide these services in the State. Should an operator contravene a requirement of this notice the operator will have committed an offence and Revenue will take action to prosecute and prevent that operator carrying on business in the State.

Given the practical considerations associated with prosecuting unlicensed operators located outside the State, the Bill enables Revenue to take effective action to prevent unlicensed operators carrying on business in the State. Where a remote operator fails to comply with a Revenue notice to become licensed or cease offering services in the State, Revenue may issue a compliance notice to Internet service providers, advertisers or persons promoting products in the State prohibiting them from providing services for the unlicensed remote operator concerned. The service providers may appeal a compliance notice to the District Court which will either affirm the notice or direct Revenue to withdraw it. A person who fails to comply with a notice by the specified date shall be guilty of an offence.

Given the complex way in which the international debit and credit card payment system works, the most effective way of preventing unlicensed operators from receiving payments from consumers in the State is to work with the international payment services industry. In an approach similar to that taken in the United Kingdom, Revenue proposes to enter into voluntary arrangements under which the international payment service providers will take action to prevent operators from using their payment systems to carry on illegal betting operations in the State. Banking and Payments Federation Ireland has indicated its commitment in principle to concluding an agreement with Revenue for this purpose. Action to prevent Internet access by unlicensed operators to Irish consumers and prevent unlicensed operators from advertising here and using credit card payment systems for accepting payments from Irish consumers provides effective tools for enforcing compliance by remote operators carrying on business in the State.

I believe the main operators in the Irish market will comply with the law and welcome the opportunity to become licensed in order that they can continue to do business here. Operators who do not wish to become licensed in Ireland can voluntarily block communications and transactions with Irish consumers and most are expected to do so to avoid Revenue enforcement action, which would risk reputational damage to the operator in the eyes of gambling regulators in other jurisdictions. Illicit operators on the margins of the market are unlikely to attract a high level of business from Irish consumers in view of the perceived risk that they will fail to pay out on winning bets.

The proposed compliance model provides the most practicable and effective approach, given the inherent difficulties in dealing with persons operating largely outside the reach of the State.

The compliance model proposed provides the most practicable and effective approach, given the inherent difficulties in dealing with persons operating largely outside the reach of the State.

A further amendment was made to take account of changes included in the Finance (No. 2) Act 2013 whereby the excise duty payable for a licence reflected the increase in the period of licence validity from one to two years and the provision for payment of the excise fee in two instalments. Further technical amendments were also included to update certain definitions. Many Senators will take the opportunity provided by the Bill to discuss the rate of duty applicable to betting services. However, the Betting (Amendment) Bill does not provide for the issue of rates, as this is more appropriate to the Finance Bill nor does the Bill deal with the funding of the horse and greyhound industry, which is primarily a matter for my colleagues the Ministers for Public Expenditure and Reform and Agriculture, Food and the Marine.

The Betting (Amendment) Bill 2013 represents the first part in the regulation of the betting and gambling sector. My colleague, the Minister for Justice and Equality, will publish the gambling control Bill in mid-2015, which will provide the regulatory framework for the wider gambling sector. I propose to bring forward on Committee Stage a number of minor amendments to the Bill, mainly of a technical nature. I will also give consideration to any constructive suggestions put forward during the debate. I commend the Bill to the House and look forward to a stimulating debate.