Paul Kehoe (Wexford, Fine Gael)
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Question 57: To ask the Minister for Finance the position regarding casinos operating here; if they are outside or inside the jurisdiction of the law; if they are outside of the law, the reason the Revenue Commissioners are prepared to register them for VAT and income tax; and if he will make a statement on the matter. [42390/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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With regard to the legal status of casinos, I have been informed by my colleague the Minister for Justice, Equality and Law Reform, that under Irish law, gaming is illegal, except where it is specifically permitted under the 1956 Gaming and Lotteries Act 1956, as amended. Certain gaming activities are prohibited, including what could be described as casino gaming, i.e. games where by reason of the nature of the game the chances of all players including the banker are not equal. It is by reference to this provision that casinos are not lawful in the State. The Report Regulating Gaming in Ireland reported that private members' clubs offering casino-gaming, do so on the basis of the provisions in the Gaming and Lotteries Acts that permit private gaming.

It is not appropriate to offer a legal opinion in this regard. It is, however, the responsibility of the Garda authorities to investigate breaches of the Gaming and Lotteries legislation, and to take whatever action is appropriate. The Garda authorities are aware of private members' clubs offering casino-like activities. These private clubs are visited by the Gardaí who are prepared to take appropriate action where irregularities are detected that would justify a prosecution under the Gaming & Lotteries Acts 1956-2003, including seeking the directions of the DPP.

The rise of private members' gaming clubs is one of the factors that prompted a fundamental rethink about our gambling legislation. The Minister for Justice, Equality and Law Reform has initiated a wide-ranging review of gambling the objective of which is to provide Government with options for a new and comprehensive legal and organisational framework governing the gambling architecture in the State, including the regulation of places offering casino-like gaming and the regulation of remote gambling, e.g gambling over the internet. The Casino Gaming Control Section of the Department will be responsible for bringing forward proposals, including a draft Bill for a revised gambling code.

The Casino Gaming Control Section of the Department of Justice, Equality and Law Reform is, as a consequence, consulting widely with stakeholders - statutory, NGO and the private sector - and with the community at large before bringing forward any proposals. The Department will, with the benefit of the consultation process and on the receipt of submissions, develop legislative proposals based on three important considerations which are the hallmark of most well-regulated gambling codes. These are: · that young people and the vulnerable are protected · that gambling should in all respects be fairly and openly conducted, and · that gambling is kept free of crime

Developing a revised gambling code that is capable of generating broad public support is a complex task. Notwithstanding that, the Minister for Justice, Equality and Law Reform has instructed the Casino Gaming Control Section to make every effort to provide him with policy options for a new gambling architecture as soon as possible which will include proposals for a draft Bill on the subject. Ultimately, it will be for Government to agree the policy approach to be legislated for in this area.

In advance of the review of gambling, the Minister for Justice, Equality and Law Reform decided that private members' clubs at which gambling activities are carried on will have to comply with relevant anti-money laundering and terrorist financing legislation. On 28 July 2009, the Criminal Justice (Money Laundering and Terrorist Financing) Bill 2009 was published which will transpose the 3rd EU Money Laundering Directive into Irish Law. The second stage of this Bill is being taken in the Dáil on Thursday, 19 November and it is expected that the Bill will be passed by both Houses of the Oireachtas this session.

In so far as the taxation of casinos is concerned, I am advised by the Revenue Commissioners that casinos are treated the same as any other business entity. Depending on the legal nature of the person or entity carrying on a business of providing casino services or facilities, either income tax or corporation tax is chargeable on the taxable profits of the person or entity concerned. Individuals would also be liable to income levy in respect of their income from such a business. Any such business would also be legally obliged to PAYE and PRSI in respect of wages, salaries, etc paid to its employees.

As regards VAT, the EU VAT Directive 2006 permits Member States to limit the scope of the VAT exemption for betting, lotteries and other forms of gambling. Under Irish VAT law, the exemption for gambling is confined to licensed betting, betting on the Tote and lotteries. Accordingly, all gambling and gaming activities carried on in casinos in the State are regarded for VAT purposes as taxable activities, and the persons carrying on such activities must register and account for VAT in respect of those activities where their annual turnover from the activities exceeds a threshold of €37,500. The rate of VAT applicable is the standard rate of 21.5%.