I am very happy to have the opportunity to participate in the debate on this significant issue. I thank the Senators who brought forward the motion which the Government is not opposing as it is broadly in line with Government policy.
The debate provides me with a welcome opportunity to report to Seanad Éireann on the efforts made to review and enhance the original Government proposals set out in the general scheme of the 2013 Gambling Control Bill. I thank Senators for their interest and support in dealing with this matter.
I commend Senators on the debate thus far, which has been interesting, responsible and thought-provoking, as is usually the case in the House.
I have been actively engaged in the past two years in efforts to develop and bring forward revised proposals in this complex and evolving area of policy broadly based on the 2013 scheme. The motion addresses two broad issues, namely, the new regulatory approach to be adopted and the consequences for persons whose gambling activities result in problems for them, their families and society in general and how best we might address those problems. Since I assumed special responsibility in this area, my guiding principle has been that we must license and regulate in a modern, transparent and proportionate manner the many gambling pursuits in which many citizens participate. In doing that, we must ensure the best possible enforcement of the law and compliance with licensing conditions, increase revenue to the Exchequer, improve services to the consumer and support the optimal protection for persons who may be vulnerable to addiction.
On 10 January 2018, the Government approved a review of all provisions of the 2013 scheme of the Gambling Control Bill 2018 to determine if they remained fit for purpose, a rationalisation of the licensing approach to gambling activities, the clarification of the provisions concerning the licensing of gaming machines and the concept of establishing an independent regulatory authority for the gambling industry. Through the chairing of an interdepartmental working group on the future licensing and regulation of gambling, the Government tasked me with reviewing all of the provisions of the 2013 general scheme. The group was to determine whether these provisions remained fit for purpose and what revisions and additions might be required in the light of domestic and international developments in the interim. I intend to bring the report of the group to Government for approval before the end of March. Once it is approved, I will seek permission to publish it, as Senator Craughwell requested, and I look forward to hearing the views of colleagues in both Houses at that time.
Gambling activity is of considerable economic impact in Ireland. In the 2017 returns published by the Revenue Commissioners, the 1% betting duty amounted to €52.2 million, suggesting a market size of €5.22 billion, while national lottery ticket sales for 2017 amounted to €800 million. These figures alone suggest an industry worth more than €6 billion annually. In addition to this, there are no figures published for revenue from online gaming, gaming in arcades and private members’ clubs, bingo - including online - or for the thousands of local community lotteries and raffles in the State. It would not be unreasonable to estimate the value of the Irish gambling market annually as being between €6 billion and €8 billion.
A great deal of change has taken place in the gambling industry since 2013. The industry is large, growing and evolving from a largely land-based manifestation to an online one. We currently apply a mid-20th century approach to gambling activities that have changed dramatically in nature, that are increasingly digital in format and that are conducted online. As the gambling industry changes, so must the State’s licensing and regulatory approach. The development of modern, fit-for-purpose gambling legislation is necessary and is a priority for the Government, whose objective is to ensure the proper licensing and regulation of the many varied forms of gambling available in the State. We need a modern regulatory approach that will enhance consumer protection in all forms of gambling, increase the protection of vulnerable persons and potentially increase Exchequer revenue from the gambling industry.
Our current legislation, however, does not provide for a coherent licensing and regulatory approach to gambling activities. The responsibility for licensing and regulating gambling activities is shared among a number of Departments and agencies, as Senator McDowell and others have noted. Such fragmentation does not facilitate a consistent and effective approach to licensing, compliance and enforcement, consumer protection and the protection of vulnerable persons, including of underage persons. In addition, this fragmented regulatory environment limits the potential for revenue-raising possibilities from licensing fees, duties and taxation, which could better fund regulatory activities and treatment for gambling addiction, as Senators have pointed out. Devising and implementing modern licensing and regulation for the gambling industry presents the State with a significant challenge, as Senator McDowell outlined from his vast experience.
The working group which I chaired met six times and, having regard to the Government decision on 10 January 2018 to establish, on a statutory basis, an independent regulatory authority for the gambling industry, devoted considerable effort to examining the modalities, including resource implications of the establishment of such an authority. I thank the members of the working group and my officials for their work. When we carried out pre-legislative scrutiny on the 2013 general scheme, under my chairmanship of the Oireachtas committee, it was envisaged that an office would be established in the Department of Justice and Equality. When I was given responsibility, however, I considered the matter and recommended going beyond that. The significant change was the establishment of an independent regulatory authority with considerably more resources and powers because my view at the time was that an office in the Department would not have cut it.
The working group considered whether the number of proposed licensing categories for gambling activities might be rationalised from those recommended in the 2013 scheme, of which there were many. In determining applications for gambling licences, extensive background checking would be required. All licences were to have appropriate terms and conditions to protect consumers and vulnerable persons and to assist in combating fraud and money laundering, while licensing conditions would be clear, fair, legitimate and transparent to all. The group considered the need for the further development of an appropriate licensing, monitoring and enforcement regime for land-based gaming machines in casinos and elsewhere that may be played for monetary reward. It would not be realistic to seek to enforce prohibition on certain physical gaming machines over other types of machine as it would risk further migration to online versions that are widely available on most operators’ websites and may be difficult to monitor effectively.
The group discussed the current minimal effective protection for consumers of gambling products and considered the positive development of alternative dispute resolution mechanisms by gambling regulators in other states to settle disputes. The critical element in improving consumer protection in respect of gambling will be the establishment of the proposed regulatory authority to enforce new licensing conditions and other provisions designed to prevent unfair practices by operators through gambling offers, which is a serious point.
The group also discussed the issue of advertising, sponsorship and promotion of gambling products and activities and examined a range of possible options on the future approach to regulating these activities. These matters have attracted much public interest and comment and many references to sponsorship, advertising and promotion were made earlier. Potential restrictions on gambling advertising and sponsorship must be carefully considered, targeted and effective. Sectors of Irish sporting activity that depend heavily on advertising and sponsorship would risk being negatively impacted by restrictive measures if they were introduced quickly, as I am sure Senators will understand. The national lottery, for example, is a prominent and significant gambling advertiser and sponsor, as was also noted earlier.
Our future legislation must deal with aggressive promotional offers by gambling operators to entice customers to their product. I am anxious to ensure, however, that unintended negative consequences do not arise in this regard and I must caution against unrealistic expectations as to what can be achieved. In regard to combating criminal activity through gambling, the group noted and discussed the transposition into domestic law of the fourth EU anti-money laundering directive in November 2018, which will give added impetus to national efforts in the combating of money laundering attempts through gambling activities. The group also discussed reports of possible attempts of match fixing concerning Irish sporting events, which the Acting Chairman, Senator O'Mahony, noted. It considered that maintaining integrity in sports betting was vital and, in this context, noted the work of the dedicated sports betting intelligence unit in the UK. Senators will understand how deeply complicated the matter is.
As highlighted by the motion, the main element of the Government decision was approving the concept of the establishment of a new gambling regulatory authority as an independent statutory body. Independent regulation would mirror the situation in most EU member states, would bring the State in line with best international practice and would offer assurance that decision-making would be free from any potentially undue influence. Senators will appreciate that effective modern licensing, regulation and enforcement of the Irish gambling industry will require additional significant resources, primarily for the operation of the new regulatory authority. Similar authorities in other EU member states involve large numbers of staff, of 100 and more in some cases, and extensive IT provision. The group is firmly of the view that without the establishment of a new gambling regulatory authority of sufficient scale, modern effective licensing and regulation could not be achieved as desired. I will make this point clear to Government colleagues when I present the report of the working group for consideration in the coming weeks.
The group agreed that any new regulatory authority should, to a large degree, be ultimately self-financing, with income from licence fees, fines imposed on operators and other duties. Such self-financing potential, however, may take some time to realise and Exchequer funding would be substantially relied on in the initial phase of operations. In order to assist with the development of a business plan for a new gambling regulatory authority, the legal firm McCann FitzGerald was contracted by the structural reform support service of the European Commission to conduct a research project entitled Establishment of Modern Regulatory Environment and Authority for Gambling Activities in Ireland. The project, which was commenced in early December 2018 and is expected to conclude by mid-summer 2019, is intended to outline the structure of the authority.
The issue of problem gambling has been the primary focus of discussion about the regulation of gambling. The working group was conscious of the issue of problem gambling in Irish society, which can involve severely negative impacts for the person as well as his or her family. It considered that the approach taken in the 2013 scheme towards the protection of vulnerable persons remained broadly valid.
This included establishment of a social fund, funded by levies on licensed gambling operators, to assist with research and information campaigns and to support addiction treatment. Our focus must be to develop the best possible regulatory measures for the gambling industry in respect of vulnerable persons. This would include age restrictions, staff training, self-exclusion measures and controls on advertising, promotions and sponsorship. A key potential of new effective regulation is that it will permit the establishment and operation of a social fund supported by industry levies. Such a fund will support those professional and expert organisations involved in addiction treatment.
Senators may wish to note that Prevalence of Drug Use and Gambling in Ireland and Drug Use in Northern Ireland 2014-15, a drug prevalence survey, revealed that 64.5% of respondents engaged in some form of gambling in the 12 months prior to the survey, while 41.4% reported gambling on a monthly basis or more often. Spending on the national lottery was the primary gambling activity. However, it is noteworthy that the survey also indicated that prevalence of problem gambling in the general population was 0.8%. The Minister of State, Deputy Catherine Byrne, and I have just this evening published that survey. I was anxious to have it published before the debate so that colleagues would have it to hand and I was glad that Senators were able to use it in the debate. A further survey for 2018 and 2019 is being conducted under the auspices of the Health Research Board. I am informed that the findings of the survey should be available in the next 12 months.
I have appreciated the opportunity to inform the Seanad this evening of the developments with regard to the working group. As I said, we will be in a better position to further debate this topic when the recommendations of the working group have been considered by Government. A modern and effectively regulated gambling environment will ensure, to the greatest extent possible, that gambling will be a safe and entertaining activity for the majority of those who choose to take part in it. We must ensure that it will provide enhanced consumer protection for players while limiting to the greatest extent possible the harmful effects on young people and those who may be susceptible to addiction.
Incremental change is not a viable approach to the reform of gambling licensing and regulation. Effective reform will require fundamental and significant change. This will take some time to develop but with support from Senators I intend to proceed with this reform as quickly as I can. It is essential that sufficient resources are committed to support the reform.
Even where there is robust and long-standing regulation and regulators, there is still problem gambling. The UK, Malta and New Zealand still have this issue. Setting up a regulator will not address the issue on its own. Addiction is, in many ways, a health matter, as Senator Marshall pointed out in his contribution. We have to be cognisant that people require treatment and so on. Even where there is a robust regulatory regime, it does not solve the problem. We should be careful about pinning our hopes to the regulator sorting out problem gambling because it will not do so. There is much more to this issue than people with problems and addiction, although that is a very serious matter. The regulator will assist in that regard. In response to Senator Craughwell, we aim to publish this report.
As an interim reform measure, I intend to amend and update the Gaming and Lotteries Act 1956. This is something that I am able to do relatively quickly. Subject to Government approval, I intend to publish the gaming and lotteries (amendment) Bill in the very near future, hopefully at the same time as the publication of the report of the working group, and to commence debate on the Bill in the Seanad. I intend to bring the Bill to this House first. I am sure Senators will give it adequate consideration as they always do.
Senator Norris spoke about all kinds of activities going on but these activities are under the remit of Revenue and the Garda. As I alluded to, action is being taken in some of these areas. I cannot comment further in that regard.
Senator O'Mahony spoke about match-fixing and the brave people who tell their stories. Pupils in every secondary school should hear about this. Maybe there is something in that. Perhaps there should be education in schools about the dangers of gambling.
Senator Horkan spoke about the Fianna Fáil Bill. At the time, we agreed with the legislation but the problem was that we have moved on. That Bill proposed only to establish an office in the Department, whereas I want to be far more ambitious. The proposal was not produced by Government and it did not go beyond heads of Bill. That debate was useful in the Seanad but hopefully we can move beyond that together.
Senator Conway-Walsh spoke about the highest online gambling losses in the world. The Senator is correct that this the industry is moving online and changing. It changes every time we look at it.
Senator Buttimer and others brought to my attention the issue of loot boxes, skins and mystery boxes on the gaming side and the blurring of the distinction between gaming and gambling. We have joined colleagues in other countries at European level in articulating our concern about that development.
I notice that Senator Conway-Walsh is not calling for gambling to be banned. If we ban something like that, it goes underground and one cannot regulate it. We could not ban in it in any event.
Senator Warfield's contribution relating to the need for treatment, the number of people treated and the role of the HSE was interesting. He articulated what I said about gambling addiction being a health issue and not losing sight of that.
Senator Mullen went back to China in 2300 BC, which seems to indicate that gambling and addiction are part of the human condition that have been around for an awfully long time. He spoke about glorifying gambling, which we hope to address through the establishment of a regulator. I want the regulator to be nimble, to be able to adapt to changing circumstances when it is established, and to keep up with an industry that is changing almost daily. Something new is happening in it every time one looks at it.
I thank colleagues for a very important debate and for tabling the motion. I also than them for the support they have given on this issue. I look forward to coming back to the House with a small Bill. I hope we will be able to discuss the report when it is published. I look forward to hearing the opinions of colleagues on the report. We can only add to it. I commit to doing the best I can to bring this forward. Listening to what the former Minister, Senator McDowell, had to say, I have to be careful because this is a very broad and difficult area.