Betting (Amendment) Bill 2013: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

I will give people a chance to enter the Chamber. The previous Bill was concluded quickly, so Members were probably taken unawares.

Deputy Ó Cuív was in possession and there are seven minutes left. I do not know whether he is going to resume.

It does not look like it.

If he is not, I will move on to the next group of speakers, who have five minutes each. I call on Deputy O'Donovan.

This is becoming a bit of a tradition for me when I stand up to speak. Not only was the Minister for the Environment, Community and Local Government in the position of speaking on legislation in the House in which the Opposition benches were empty, this must be the fifth or sixth time when I have done so. I have raised this before. It shows the height of disrespect to the House. I know it is a procedural matter but Opposition spokespersons should at least show courtesy to the presence of the Minister of State, to the House itself, to the legislation coming before the Dáil and more importantly, to the industry itself.

This industry creates and sustains thousands of jobs across the country. There are waves of empty seats here on the Opposition side and there is no interest being shown in it These are the same people who disrupted business this morning on a procedural issue for things that were discussed at committees. It makes a total farce out of the operation of the House if we do not have the co-operation of the Opposition. There are about half a dozen Whips over there and they are all in receipt of allowances. It flies in the face of what parliamentary democracy is supposed to be about. It is supposed to be a two-way street, and that is very unfortunate.

This is an important Bill in every constituency because there is not a town or a village in Ireland that does not have a bookmaker. There is practically no county that does not have a racetrack for horses - I know you have a great affinity with that industry, a Cheann Chomairle - or for greyhounds. In Limerick we are very fortunate to have two outstanding facilities for horse racing and greyhounds. The focus in this Bill is on the funding of the horse and greyhound industry and the difficulties that they have sustained over a number of years, but there is a bigger issue here in respect of the funding of sport in its entirety, including facilities. I welcome the fact that the Government has brought forward a new round of national lottery funding this year but this Bill goes some way to addressing the shortfall of funding that is available for the horse and greyhound industry in particular. We know that the Bill is primarily targeted at the creation of two new licences for remote bookmakers and remote betting intermediaries. That captures a type of betting that heretofore was not captured, and it is a good thing that they can brought under the remit of the Bill.

The number of jobs being sustained by the industry is staggering. It is a €1 billion industry for horse racing alone, sustaining over 17,000 people in employment, and about 11,000 people work in the greyhound industry. There are facilities all over the country, in which the State has made a huge investment. If there was a Bill for any other industry that was worth so much, the Opposition might show a bit more interest in it.

One aspect that concerns me - I know the Minister will take it on board - is in respect of problem gambling. The Bill does address it as it is under the remit of the Department of Justice and Equality but perhaps the Minister of State might bear in mind the concern about people who show above normal levels of gambling activity. It is a very difficult social ill for many people. The industry is behaving responsibly and does its best to watch out for people. However, it has created problems in many homes across the country and I ask that in future, discussions between the Minister of State's Department and the Department of Finance and the Department of Justice and Equality would focus on this issue to alleviate problems before they arise. For many people it is a very unfortunate addiction, but at the same time it is a part of the fabric of what we are as Irish people that we have a great affinity with sport. In rural areas, we have a great affinity with the horse and greyhound industry. The revenue that heretofore remained outside the ambit of the legislation and was uncollected should go some way to ensure that the industry can be developed.

Deputy Brian Walsh and I raised the issue of opening hours a while back, on behalf of bookmakers across the country, in order to provide a level playing field. Where a bookmaker might close at 6.30 p.m. while an online operation could continue through the night, we now have some parity of esteem. However, the main thrust of the Bill is to bring in revenue that could not be collected until now, and to bring in operations that are in a vacuum under a legislative umbrella. It will allow for increased funding to be made available to both the horse and greyhound industry, but as I said at the outset, there is a bigger issue in respect of the funding of sport and rural pursuits especially. I ask that the Minister and the Minister of State bear that in mind.

I will finish by noting the empty seats of Fianna Fáil, Sinn Féin and the Technical Group, and their interest in the horse and greyhound industry, the gambling issue and the betting issue.

I thank the Government Whip for allowing me the time to speak on this important Bill. It is a very important Bill which will facilitate taxing of online betting for the traditional bookmakers who operate here and for the relatively new practice of betting exchange businesses like Betdaq and Betfair, who have been winning an ever increasing percentage of the betting turnover in the State. All of the major bookmakers who operate online services here are domiciled in other countries, which effectively means that they avoid having to pay the 1% betting tax on bets that are placed. I remember that tax in the past being as high as 10%. It was funded by the punter himself, but as a result of a considerable reduction in the tax over the years, it is now absorbed by the betting industry. In fairness, the betting exchanges are willing to embrace this legislation and see it as necessary.

Turnover over the past few years has fallen sharply, from €5.4 billion in 2006 to around €2 billion in 2013 and part of the reason is the downturn in the economy. People have less disposable income to direct towards betting activity but a considerable factor is that more and more people are availing of betting opportunities online with betting exchanges and even with traditional bookmakers. It is more convenient to do so and the traditional high street bookmaker is suffering as a result, with more and more of these shops consolidating their operations. The bigger players such as Paddy Power, Boylesports and Ladbrokes are all purchasing the smaller independent and multiple bookmakers, and in many cases they close the shops and consolidate their existing high street businesses.

There are now greater online betting opportunities available. I remember on budget day some of the staff here in the Oireachtas telling us about opportunities to bet on what colour tie the Minister would wear, or how many sips of water he would take from his glass, the length of his speech and so on. I can give the Minister of State some comfort as he is long odds on to retain his seat in Louth, according to the bookmakers, who rarely get it wrong.

Even in horse racing, there are opportunities to bet on the number of horses that will fall or the winning distances. All of these are available online and we would not associate them with our traditional bookmaker. It is very important that such revenue is not lost to the State, and that is what this legislation allows us to do. It allows us to avail of the 1% levy on all bets that are placed by people domiciled here in Ireland. It is important that we capture that income.

Traditionally, and in recent years in particular, the 1% levy has been ring-fenced for the benefit of the horse racing industry. This approach should continue once the legislation to facilitate the taxation of online betting services is enacted and revenue accruing from the levy increases. This additional revenue, which will probably be a multiple of the current income, should be ring-fenced for the horse racing industry because it is in crisis, with attendances at meetings declining significantly and many racetracks in need of significant investment. While some tracks such as Leopardstown, Galway and Punchestown, which hold large festival meetings, continue to do well, many smaller racetracks are suffering and require capital investment. Further legislation will be required to capture the 1% levy in the online betting business.

As Deputy O'Donovan and other speakers noted, horse racing is an important industry. Betting, horse and greyhound racing and related industries employ more than 30,000 people. Horse racing is arguably one of the sports at which Ireland is most successful internationally. The Coolmore Stud, for example, breeds some of the best flat racing stock in the world and most of the top jockeys operating in Ireland and the United Kingdom are Irish. Tony McCoy recently achieved a phenomenal feat when he rode a winner for the 4,000th time. McCoy is constantly breaking records. Mick Kinane, another Irish jockey on the flat, won all the various group races over the years. Ireland has recorded many significant sporting achievements in horse racing. It is important, therefore, that the industry is protected and receives investment.

As the Leas-Cheann Comhairle will be aware, Galway hosts a highly successful racing festival each year. The event is worth in excess of €60 million to the local economy over the course of festival week and must be protected and enhanced.

Funding must be made available to look after horse owners, the lifeblood of the industry without whom one would not have any activity. A different Department is considering the introduction of a ban on the sponsorship of sporting events by alcohol companies. While this proposal has merit in respect of certain sports, the horse racing industry traditionally attracts a more mature audience than other sports and horse racing meetings are not often attended by youngsters. The industry should be protected. Drinks companies sponsor all the major races at meetings held at the large tracks such as Galway, Punchestown, Leopardstown and Fairyhouse. A cloud hangs over the future revenue stream from sponsorship by alcohol companies and the State should invest heavily in the horse racing industry given its importance to the wider economy.

I welcome the Bill and look forward to the subsequent enactment of legislation required to capture revenue from online betting. I commend the Government on introducing the Bill.

One of the few times I ventured into a bookmaker's shop was when my namesake, Anne Ferris, rode the winner of the Irish Grand National in 1984. While I cannot remember what I did with my winnings, I remember remarking at the time that there were not many women customers in the shop, despite the fact we had just had the first female winner of the country's greatest horse race. For some reason, bookmaker's shops mainly attract male customers, despite the dire warnings issued by a fellow parliamentarian in June 1931 when debating the legislation that is being amended in this Bill. Speaking on the 1931 Betting Bill, Independent Senator, William Barrington, was concerned about the risk legitimising betting shops would pose for the morals of Irish women. He stated the following:

Cases have been mentioned to me of most respectable men whose wives were bitten with this gambling craze. These men hand their wages to their wives; the women go to the betting offices; they neglect their children, their houses, and their husbands, and they keep betting all day.

From the point of view of the morals of women, the words of Senator Barrington make me smile a little. Similar warnings echoed through this House during debates on other controversial legislation that would purportedly destroy society as we know it but subsequently failed to do so. The legislation on contraception and divorce and, most recently, on the protection of the lives of pregnant women all passed through the House without the roof caving in. Debate on other ostensibly controversial legislation, such as measures to grant access to adoption records and give gay people the right to marry, will undoubtedly follow the same pattern in time.

There is, however, one aspect of Senator Barrington's warning from the past that we should not ignore. Gambling is addictive and families often endure serious pain and suffering because a breadwinner or carer is addicted to betting. Gamblers can become thieves to feed their addiction. The secrecy involved in gambling on the Internet in the privacy of one's home no doubt feeds the addiction of as many modern women as men. While it is probably the case that only a small percentage of Internet gamblers become addicts, online betting can do considerable damage. More openness and awareness of addiction is needed.

I welcome the proposal to extend the betting tax to Internet gambling. A portion of this revenue stream should be ring-fenced to fund addiction counselling and charities that do good work caring for the families of gambling addicts. Owing to the risk of addiction and the wider problems it creates in society, Irish betting legislation has always been cautious about children being involved in gambling. The Bill before us follows this pattern. Since the 1926 Betting Act and the subsequent Betting Act of 1931, bookmakers who accepted a bet from a child under 18 years committed an offence. The Bill goes further by also prohibiting the acceptance of a bet from a minor. It provides that where a 17 year old enters a bookmaker's shop pretending to be 18 years or older and places a bet, he or she will have committed an offence. While I agree with the spirit behind this measure, namely, the need to discourage and prevent young people from engaging in addictive behaviours, whether drinking, smoking or gambling, I am concerned that it criminalises young people.

I agree that the fault should not fall only on the bookmaker if a customer misrepresents himself or herself and a fine should be imposed for such behaviour. It is important, however, that we also create a general awareness of the way in which the fine is applied. As it will not be an on-the-spot fine of €60, if it is to be applied, the young person must be brought before a court and convicted. I would prefer if our legislation did not criminalise young people so readily. I accept, however, that there is no other way of managing this issue until we either legislate to allow gardaí to apply on-the-spot fines or require young people to carry identity cards at all times, as is the case in many other countries. I urge the Minister to take account of my reservations about this aspect of the Bill.

This is not the only legislation that can result in young people finding themselves convicted in courtrooms. Where possible, we must find new ways of dealing with minor offences under law. In this regard, I look forward to discussion and debate about methods of restorative justice and community service orders. I welcome the Bill and commend the Minister on its introduction.

I welcome this opportunity to speak to the Bill. The legislation is framed to ensure fair and equal treatment of all bookmakers and betting exchanges offering services in this State. It will bring into the licensing and taxation regime all remote bookmakers and betting exchanges. This new licensing system for remote operators will serve the important public interest of preventing crime and protecting consumers against fraud and ensure all businesses offering betting services from Ireland or to persons in Ireland are regulated appropriately. The Bill amends, for that purpose, the Betting Act of 1931, which contains the existing provisions governing licensing of conventional bookmakers. Once enacted, any bookmaker offering bets to punters within the State must be licensed to do so and must have paid the appropriate licence fee, with all bets taken being subject to betting duty.

The horse racing and breeding sector contributes approximately €1 billion annually to the economy, employing in excess of 16,000 people and is responsible for exports worth €174 million. There is a network of 26 racecourses located in 19 different counties which are capable of hosting national hunt and flat race meetings. Our racecourses offer a year-round programme of racing events giving major financial boosts to local economies. As stated by Deputy Walsh, horse racing provides a significant boost to the economies of places like Galway, Punchestown, Leopardstown, The Curragh and smaller areas such as Bellewstown and Ballinrobe and provides employment for many people.

The Irish horse breeding sector is an important success story within the national economy. Irish breeders are responsible for 42% of all thoroughbred foals in Europe. In 2008, we exported a total of 6,222 thoroughbred horses, worth a combined total of €126.8 million, to 42 different countries. It is safe to say that Ireland is a world leader in horse racing with national hunt jockeys like Tony McCoy, who recorded a landmark 4,000 winners last year on a horse called Mountain Tunes for his boss J.P. McManus and trainer, Jonjo O'Neill. Tony McCoy is an iconic figure in racing, having won the Gold Cup on Synchronised and the Grand National on Don't Push It. He is a role model for all jockeys and people in the industry. We also have the hugely talented Ruby Walsh and the emerging talent Bryan Cooper, who recently signed for Gigginstown stud. I wish him all the best. We have excellent trainers such as Willie Mullins, Gordon Elliott, Noel Meade and Charlie Swan. On the flat scene, Ireland has world dominating trainers like Aidan O'Brien, Jim Bolger and Dermot Weld, with jockeys such as Joseph O'Brien, Johnny Murtagh, Kieran Fallon and Richard Hughes, who is currently a champion jockey in England.

The Irish greyhound racing industry supports 10,000 full and part-time jobs and injects €500 million into the economy each year. As with the Irish horse, the Irish greyhound is regarded as a world leader. It is important that both industries are properly funded and supported to sustain and grow jobs. Bringing betting exchanges into the taxation system makes sense, particularly in the context of the changed betting environment with smartphones and tablets. It is important revenue collected under this legislation is ring-fenced for the support of horse racing and greyhound industries, which will as a result become self-sustaining, thus protecting jobs in the sector and giving a much needed boost to the economies of many areas.

The Bill provides for the extension of the opening hours of registered bookmakers' from 7 a.m. to 10 p.m. all year round, with the exception of Good Friday and Christmas day. This is a welcome provision, which has been called for by the industry for a long time and brings us into line with other jurisdictions such as the UK.

I welcome this Bill and look forward to its passage through the Houses of the Oireachtas. I commend the Bill.

I welcome the Bill. I note that many greyhound tracks are under pressure financially and that this Bill will allow for the raising of additional revenue which, hopefully, will be channelled in that direction.

There is an overlap in respect of betting and gambling between the Departments of Justice and Equality and Finance. I would like to speak first about a concern brought to the attention of the Oireachtas Joint Committee on Justice, Defence and Equality. According to the Gaming and Leisure Association of Ireland, GLAI, there are 20,000 unlicensed gaming machines in operation in this country across a number of unlicensed venues. It cites the reason for this as the conflicting regulatory regimes currently in operation. While holders of gaming licences must adhere to strict operational criteria, including mandatory inspections and reporting, holders of amusement licences are required only to hold a tax clearance certificate and are not subject to mandatory inspections of their properties. The Gaming and Leisure Association maintains that this is unfair to the people operating gaming licences in accordance with the law. I would welcome the Minister's at some stage clarifying the facts surrounding this issue, the role of the Revenue Commissioners in this matter and whether the State is losing a considerable amount of money because of this anomaly. It is, perhaps, an issue that should be addressed in the context of this legislation.

It could well be that the current legislative regime is adequate. If so, why then is it not being enforced and is the State losing a considerable amount of money because of this and putting pressure on the people who are operating gaming licences properly? I understand that information on this matter has been submitted to various Departments by the GLAI. The association is deeply concerned about this matter and has proposed the introduction of amusement licences in both respects. This matter is also relevant in the context of the gambling control Bill currently under consideration by the Department of Justice and Equality. The association believes that a lot will be achieved by way of clear and simple definitions of these licences and that further discussion on definitions is required.

In regard to the proposed establishment of a gaming regulation authority, it could also have a role in this area. Clarity on the proposed licensing regime is required urgently as there are many operators under pressure financially because of this anomaly in the system. I would welcome the Minister's at some stage giving a considered response in the Dáil or in committee to this issue.

Reference was made to online accounts, deposits and unclaimed winnings, etc. There are issues around that which also need to be tidied up. I hope the Departments of Justice and Equality and Finance, in terms of the overlap between them in relation to gambling and betting, co-operate in relation to this Bill and the proposed gambling control Bill.

I welcome the Bill. In many of our small towns, and some of the bigger ones, bookmakers and hairdressers are the only surviving businesses. I welcome the proposed tax on online betting, whether that be with Betdaq, Betfair or Paddy Power. I always believed the Exchequer was losing an enormous amount of revenue in this area. With online banking, it is now much easier to place a bet by way of an iPhone, iPad or a computer. This means bookmakers have to do much more to compete. I welcome that following enactment of this legislation when a person wins, for example, €100, by way of an online bet with, for instance, Betfair, the 3% commission charged by Betfair in respect of that win will now be subject to a 15% commission charge, money which will go to the Exchequer. I hope this provision will result in huge revenue for the State. While the amount likely to be collected is as yet unquantified, I believe it could be as much as €20 million. I suspect it will be much more. I hope I am right.

I congratulate the Minister on his work in this area. I welcome the extended opening hours for registered bookmakers from 7 a.m. to 10 p.m. This is innovative legislation, for which the departmental officials should be credited.

There are difficulties with online betting because one could go into an exchange or go online to play roulette, cards or whatever. It is a major issue and one that has not been tackled enough. We should remind ourselves that gambling is an issue people do not talk about. It is a cause for concern that a man or woman can gamble unquantifiable amounts of money in his or her home. This must be examined by Government and people must be protected.

I welcome the 15% duty and the 3% online betting duty. I did not think it could be done, but the fact is that the Government has brought in this licensing initiative and enterprises must be licensed to compete or operate in Ireland. I congratulate the Government. I believe the measure will bring in a good deal more than the €20 million that has been earmarked because there is a good deal of online gambling which we do not know about.

I thank all the Deputies for the welcome they have given to the Bill and for their considered contribution to the debate. While the Bill deals with the regulation of the remote gambling sector and provides the basis for the fair and equal tax treatment of all bookmakers, whether traditional or remote, the debate has covered a wide range of related issues.

Several Deputies have commented on the delay in bringing the Bill before the House. There is good reason for this. What the Bill sets out to do, i.e. regulate and tax the remote sector, is remarkably challenging as we are dealing with a sector which, by its virtual nature, does not necessarily have a physical presence within our State. The Bill was originally published in July 2012 but further work was required around compliance and enforcement issues. The Bill was republished last July and was subject to a three month standstill under the EU technical standards directive.

Concerns have been raised by several Deputies in respect of the regulation of the remote sector and the collection of taxes from companies which do not necessarily have a physical presence in the country. There is no doubt that the introduction of a licensing and tax regime for remote bookmakers and betting intermediaries, which in the majority of cases are based outside the jurisdiction, poses significant challenges in terms of enforcement and compliance. However, where a company is licensed by the authorities I believe it is likely to be tax compliant. In the case of companies which are not licensed but continue to offer services within the jurisdiction, the Bill provides a range of powers that may be deployed. If it is found that additional powers are required at any stage in this regard the Government will not hesitate to provide for them.

Several Deputies have commented on the level of betting duty currently in place and have called for an increase in the rate. The relatively low rate of duty is a function of the changes that have taken place in the bookmaking industry in recent years, in particular, the increase in the remote or online sector. The explosion in the use of mobile telephones, laptops and other electronic communication devices has greatly facilitated the migration of punters to the remote sector. Until the playing field for traditional and remote bookmakers has been levelled in so far as taxation is concerned the rate must be kept at low levels.

The Bill will put in place a regulatory framework to allow for the extension of betting duty to the remote sector. This will permit the application of the 1% duty to licensed remote bookmakers and a 15% duty to the commission of licensed betting intermediaries. As the Minister for Finance, Deputy Noonan, has always said, his priority has been to put in place a regulatory and licensing regime for the remote sector. When this is in place all other options around the level and type of tax involved in the betting industry can then be explored.

Several contributions have reflected on the impact of betting on the most vulnerable in our society. The Minister for Finance, Deputy Noonan, shares the views of many Deputies who believe we need to provide adequate protection for consumers. The supervision of operators providing online betting services is a first step in this direction.

Sections 4 and 5 provide that it will be an offence to offer betting services without a licence or to represent oneself as a licensed bookmaker. These sections provide for the relevant authorities to bring forward proceedings in such cases. As has already been pointed out, it is envisaged that the arrangements put in place by the legislation will be temporary in nature pending the putting in place of a comprehensive modern regulatory framework to cover all forms of gambling and afford the greatest protection to those who need it most. This will be achieved through the proposed gambling control legislation currently being prepared by my colleague, the Minister for Justice and Equality. I understand the Minister is progressing that legislation with a view to publication early next year.

An integral part of the regulation of those operating within the system is the certificate of personal fitness required before a licence can issue. Grounds for refusal and revocation of these certificates are set out in section 12 and include where a person stands convicted of an offence under specified Acts in Ireland or elsewhere relating, inter alia, to the conduct of gambling; where an applicant who has formerly held a bookmaker's licence has in the past refused to pay sums due or conducted the business in a disorderly manner; where an applicant is not a fit and proper person under the Criminal Justice Acts; and where an applicant is the holder of a pawnbroker's licence or is a registered moneylender. These are important grounds for refusal or revocation.

Some Deputies have suggested that the additional tax raised should be earmarked to support those with gambling addiction issues or to continue to support the horse and greyhound racing industries. The Minister, Deputy Noonan, is not in favour of hypothecated taxes. However, the additional revenues raised will allow the Government some scope to consider areas of need.

Again, I thank all Deputies for their contributions to the debate. As the Minister remarked in his opening statement, a small number of matters remain under consideration for inclusion on Committee Stage. The Minister is looking forward to a more detailed debate at that time.

Question put and agreed to.