I propose to take Questions Nos. 54 to 56, inclusive, together.
I am advised that Revenue commenced a nationwide compliance project in 2017 in relation to the gaming and amusement sector, including compliance with licensing laws. Revenue’s enforcement of the law in relation to gaming and amusement machine licensing is based on detecting machines that are unlicensed and in particular, detecting gaming machines that have been licensed improperly as amusement machines. As of 11 April 2019, the total yield under the project was €2.68 million. In addition, a total of 325 gaming machines have been seized to date for failure to comply with excise licensing requirements. Revenue has confirmed that the project is ongoing and it continues to be a priority.
I note the Deputy’s reference to industry estimates of the number of unlicensed gaming machines in operation and the possible excise receipts that would be involved. Revenue has advised that it is not aware of the methodology used for these estimates and, in general, considers that there are inherent difficulties in measuring the scale of such illegal activity. In the case of the national compliance project on gaming and amusements, Revenue is making use of internal taxpayer records across all tax headings, information on gaming and amusement licences granted previously and sharing of intelligence from Revenue offices across the country in its efforts to target compliance and enforcement activity under the project. This allows for resources to be deployed based on assessment of compliance risk and ensures the best use of resources.
Neither I nor officials from my Department have met or had discussions with the Revenue Chairman in relation to this project. However, both Revenue and my Department participated in the discussions of the recent interdepartmental working group on the future licensing and regulation of gambling. I understand that Revenue did provide information to the interdepartmental working group during its discussions on the progress of the national compliance project and this is reflected in the report of the group which was published by the Department of Justice and Equality on 20 March 2019. Revenue has also advised that it must always plan for the deployment of its resources across all tax headings and that sector-specific projects such as the national compliance project on gaming and amusement machines are undertaken as part of its normal role in serving the community by fairly and efficiently collecting taxes and duties and implementing customs controls. Similar projects have been undertaken in the past in other areas, industry sectors and professions.
I note the Deputy’s query in relation to the identification of local authority areas where Part III of the Gaming and Lotteries Act 1956 is in operation. Under this Part of the 1956 Act, local authorities may decide by resolution if gaming is to be permitted in respect of the whole or a specified part of its administrative area. If gaming is permitted in the area concerned, a trader must first apply to the local District Court for what is called a ‘certificate for a gaming licence’. The relevant local authority and An Garda Síochána must be given 28 days’ notice of this court application. Revenue does not have any statutory role under this court process. If the District Court grants this certificate, this allows the trader to apply to Revenue for a Gaming Licence, which is required for each premises where gaming machines are made available to play. If the trader concerned presents the District Court certificate to Revenue and has paid the relevant licence fee, Revenue is under a statutory obligation under section 19 of the Gaming and Lotteries Act 1956 to grant a Gaming Licence. In addition to a Gaming Licence, a trader must also apply to Revenue for a Gaming Machine Licence under section 43 of the Finance Act 1975 in respect of each gaming machine made available to play. Gaming Machine Licences may only be granted by Revenue to traders who have already been granted a Gaming Licence.
I am advised that the sole focus of Revenue is on whether the trader concerned has appropriate Gaming Licences and Gaming Machine Licences. Irrespective of whether a local authority has adopted a resolution under Part III of the 1956 Act, Revenue carries out a standard procedure when engaging with traders who have been identified as making gaming machines available for play in the public place. Such traders are issued with a 21-day warning letter warning that it is an offence under section 43 of the Finance Act 1975 to make a gaming machine available for play without the required gaming machine licence and this includes a warning that failure to comply with licensing requirements may lead to seizure of the unlicensed gaming machines. This is followed up by similar 14-day and 7-day warning letters where necessary. If the trader concerned has not complied with the licensing requirements by this point, the machines are subject to seizure by Revenue. This approach places the onus entirely on the trader concerned to establish if he or she is in a position to obtain a gaming machine licence.
I understand that at the outset of the compliance project, Revenue did make enquiries to confirm the position of all local authorities in relation to whether they had adopted a resolution under Part III of the Gaming and Lotteries Act 1956. In a number of cases, the resolutions concerned were adopted over previous decades and there were difficulties in establishing the position in relation to a number of local authority areas. In addition, the widespread reorganisation of local authorities in 2014 resulted in a lack of clarity as to previous resolutions that may have been made. Ultimately, Revenue determined that it was for the individual traders concerned to clarify their position with regard to the 1956 Act. The trader must apply to a District Court for a certificate for a Gaming Licence and the relevant local authority is placed on notice of the District Court application. If a certificate for a gaming licence is granted by the District Court, the trader can apply to Revenue for a Gaming Licence. If the trader is unable to obtain a certificate for a Gaming Licence, he or she is not in a position to apply to Revenue for a Gaming Licence and Revenue will, following reasonable warning, be able to take enforcement action. I am advised that this approach allows Revenue to deploy its resources in the most efficient manner possible under the project. Revenue has not been in contact with the Comptroller and Auditor General in relation to this issue.