I welcome the Minister of State, Deputy O'Dowd, and his officials. The purpose of this meeting is to consider Committee Stage of the Betting (Amendment) Bill 2013. The Bill was referred to the select sub-committee by Dáil Éireann on 30 January 2014.
Before I begin I remind Members that all mobile phones must be switched off to avoid interference with the broadcasting of the meeting.
Amendment No. 1 is in the name of the Minister. Amendments Nos. 1 to 5, inclusive, and amendments Nos. 16 to 22, inclusive, are related. Amendments Nos. 17 and 18 are consequential on amendment No. 16 and amendments Nos. 20 to 20, inclusive, are consequential on amendment No. 19. Amendments Nos. 1 to 5, inclusive, and 16 to 22, inclusive, are related and may be discussed together.
I move amendment No. 1:
In page 6, to delete lines 12 to 14.
The main changes as published are based on this group of amendments. I would like to set out the background to the amendments and what is proposed.
As Members will know, the Bill as published made it unlawful for a person, other than a licensed operator, to act as a bookmaker and the Minister for Justice was tasked with compliance regarding remote operators. The Bill provides that, where an unlicensed remote operator engages with punters in this jurisdiction, the Minister for justice will issue a notice to that individual or company to cease activity.
The Bill, as published, also provided that the Minister for justice may apply to the District Court for an order directing service providers, including financial institutions, advertisers and Internet service providers, not to provide services to specified unlicensed operators. In addition, it also provided for the revoking of a licence and the issue of similar court orders in these circumstances.
The amendments that are now before the House provide for the temporary assignment of responsibility for enforcement against unlicensed remote operators from the Minister for justice to the Revenue Commissioners - the key point, pending the establishment of the gambling regulator under the proposed gambling control legislation. This means that Revenue will be responsible for bringing summary prosecutions against unlicensed bookmakers and remote operators. In this context, Revenue will operate a new model for enforcing compliance by unlicensed remote operators. The model will operate as follows: where an unlicensed operator is accepting bets from within the State, Revenue will issue a notice to that operator of the need to become properly licensed or cease to provide betting services in the State; and should an operator contravene a requirement of this notice, the operator will have committed an offence and will be liable to penalties.
Given the practical considerations associated with prosecuting unlicensed operators outside the State, the compliance model will also enable Revenue to take effective action to prevent unlicensed operators carrying on business in the State. The Bill, as amended, prohibits Internet service providers, advertisers or persons promoting products, from providing services in the State to unlicensed remote operators. Revenue may issue compliance notices. The Internet service providers may appeal a compliance notice to the District Court which will either affirm or direct Revenue to withdraw the notice. A person who fails to comply with such a notice by the specified date shall be guilty of an offence. It is proposed to bring forward an amendment on Report Stage, or if this does not prove possible, when the Bill is in the Seanad to specify the penalties that will apply.
Because of the complex way the international debit and credit card payment system works, the most effective way of preventing unlicensed operators receiving payment from consumers in the State is to work with the international payment service 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 using their payment systems to carry out illegal betting. The Irish Banking Federation and the Irish payment service operators have indicated their commitment, in principle, to concluding an arrangement with Revenue for this purpose.
Action to prevent Internet access by Irish consumer to unlicensed operators and to prevent unlicensed operators using credit card payment systems for accepting payment provide effective tools for enforcing compliance by remote operators carrying on business in the State. We believe that the main operators in the Irish market will comply with the law and will welcome the opportunity to become licensed so 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 also risk reputational damage to the operator in the eyes of gambling regulators elsewhere. 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.
The compliance model proposed provides the most practical and effective approach given the inherent difficulties in dealing with persons operating largely outside the State. I commend the amendments to the House.
I move amendment No. 2:
In page 7, to delete lines 32 to 37 and substitute the following:
“(2) A person (other than a licensed remote bookmaker) who carries on the business of, or acts as, a remote bookmaker from a place outside the
State shall not communicate or attempt to communicate with a person in the State by remote means for the purpose of the making of a bet or
bets with the first-mentioned person.”.
I move amendment No. 3:
In page 7, to delete lines 38 to 44 and substitute the following:
“(3) A person (other than a licensed remote betting intermediary) who carries on the business of, or acts as, a remote betting intermediary
from a place outside the State shall not communicate or attempt to communicate with a person in the State by remote means for the
purpose of the making of a bet or bets by the second-mentioned person with any person (other than the first-mentioned person).”.
I move amendment No. 4:
In page 7, lines 45 and 46, to delete “Minister for Justice and Equality” and substitute “Revenue Commissioners”.
Amendment agreed to.
I move amendment No. 5:
In page 8, to delete lines 17 to 23 and substitute the following:
“(8) Summary proceedings for an offence under this section may be
brought and prosecuted by the Revenue Commissioners.”.
Amendments Nos. 6 and 7 are related and will be discussed together by agreement.
I move amendment No. 6:
In page 13, after line 48, to insert the following:
“(10) On receiving any application under this section the Minister for Justice and Equality shall cause the application to be published on the internet and in such other manner as he or she considers appropriate until a decision is made on the application.”.
Amendment No. 6 states, "On receiving any application under this section the Minister for Justice and Equality shall cause the application to be published on the internet and in such other manner as he or she considers appropriate until a decision is made on the application.”. Amendment No. 7 states, "The Minister for Justice and Equality shall in his or her decision consider any views expressed to him or her by third parties regarding each application.”.
The purpose of these amendments is to address the concerns raised with me that some of the unsavoury and illegal companies may go online or engage in exchange betting markets. These amendments would make it compulsory for the Minister to publish each application online until the application is adjudicated on and would compel the Minister for Justice and Equality to take observations from third parties, which may be the case but is not in the legislation. This will allow for more transparency as to who is applying for the certificate and allows for people to flag to the Minister of the day, issues that he or she may not be aware of.
Section 9 of the Bill provides that an applicant must make his or her intention to make an application for a certificate of personal fitness known through the publication of a notice in two daily newspapers. The onus is on the applicant to advertise the application in a daily national newspaper. In addition, the Minister for Justice and Equality may in accordance with section 32, request information from the Revenue Commissioners, An Garda Síochána or a foreign regulatory body for the purpose of making a decision on an application for a certificate of personal fitness.
It should be recognised that the Bill is an interim measure, pending the enactment of the gambling control Bill, which is due to be published early next year. Upon enactment of the gambling control Bill, the Minister for Justice and Equality will become the sole regulator for all forms of gambling with the exception of the national lottery. This will provide for a comprehensive licensing and regulatory framework.
In light of this, it is not proposed to accept these amendments.
I am not going to die in the ditch over them but I do not understand the reason they were not accepted. In my view these amendments make the section more transparent and will assist the Minister.
It is quite interesting that this is the first time I have seen in a Bill the provision that requires the applicant for a licence to provide an e-mail address. If one wants to be a bookmaker and one does not have an e-mail address, one is snookered.
Obviously the Internet is the way we communicate and the way many people get their information. While the Bills refers to placing notices in two national daily newspapers, today's national daily newspaper in my house is lighting the fire the following morning. The Internet is where one sources information. If the day passes, the daily newspaper is gone. I suggest that my amendment should have been accepted, even in the spirit of the legislation. I do not think it would have made a significant different to the Minister.
I understand that the gambling control Bill will be introduced shortly. It is a pity that we are not dealing with both Bills concurrently.
This Bill is peppered with requirements to publish different types of applications and certificates in two daily newspapers. The decision to confine it to daily newspapers limits the options available to people. A person who is looking for a bookmaker's licence in my own parish of Gaoth Dobhair, for example, will have to publish an application in The Irish Times and the Irish Independent. I expect that those who might raise issues about that person's fitness would be more likely to look at the local newspapers. I suggest that the relevant section of the Bill, which I am not seeking to amend at this time, should be re-examined. I am not seeking to diminish the requirement to place notices in national newspapers. Given that people in most places outside Dublin look at local newspapers like The Kerryman, The Corkman, the Donegal Democrat and the Donegal News, I am suggesting that there should be a requirement for notices to be published in local newspapers too, where appropriate.
I take the point the Deputy has made. As he has said, all of the gambling issues in the State can be examined in an holistic way in the context of the forthcoming gambling control Bill. I remind the committee when one applies for planning permission, one has to place a notice in a local newspaper as opposed to the council's website. I know it is a different area. I take the Deputy's point. Obviously, the Minister will be reading this later. I cannot give any commitment in relation to this matter.
I move amendment No. 8:
In page 15, between lines 15 and 16, to insert the following:
“(c) the holder of the certificate failed to take adequate steps to prevent persons under the age of 18 undertaking betting transactions.".
I am proposing to amend section 11 of the Bill by providing a further reason for the revocation of a certificate of personal fitness. The Minister of State will probably respond by saying this would be more appropriately dealt with in the context of the gambling control Bill. It is important at this stage to highlight the issue of minors gambling not only in bookmakers' shops but also online, where it is far more difficult to control young people who want to gamble. A "Prime Time" special on this issue some time ago showed that minors are able to place bets in bookies' shops. As most young people are au fait with technology, they are easily able to circumvent the minimal controls that are in place at the moment. I am proposing that if the holder of a licence has "failed to take adequate steps to prevent persons under the age of 18 undertaking betting transactions", that should be grounds for the revocation of a licence.
The Deputy has made a very important point. All of us who are parents are obviously concerned about our children. If someone who is under age gets his or her hands on a credit card, he or she can be in business straight away simply by using the Internet to access paddypower.com or boylesports.com. This is a serious issue. The principal Act provides that it is an offence "to make a bet or enter into a betting transaction with" a person under the age of 18. The Bill, as published, provides that "the Minister for Justice and Equality may revoke a certificate of personal fitness .... where he is satisfied that .... the holder of the certificate is not a fit and proper person to hold a bookmaker’s licence, a remote bookmaker’s licence or a remote betting intermediary’s licence". It further provides "a relevant consideration" regarding the refusal to issue or revocation of a certificate of personal fitness arises when "the applicant, or a body corporate of which the applicant is a relevant officer, stands convicted of an offence" under certain Acts of the Oireachtas, including the betting Acts. Accordingly, the Minister agrees that the protection of minors is indeed a fundamental principle of the legislation and is satisfied that this is already provided for through the provisions of the existing legislation and in the Bill as published. Therefore, he does not propose to accept this amendment.
I accept the Minister of State's explanation. I will withdraw the amendment.
I would like to refer to an issue I have raised in the House over the last couple of months. I have a problem with credit cards being the modus operandi upon which licences are awarded. I do not know of any bookmaker at any race track who plugs in a credit card apparatus to take one's details. I believe that if one wishes to place a bet, one should have the money on one, or one should have access to a debit card. I have raised this issue with the Department and the Minister. I put it to the Minister of State that the problem of gambling addiction, which is well documented and not easily overcome, has been exacerbated by the easing of access to credit cards. I remind him that many people have publicly announced the level of debt they have accumulated. I suggest that if we were to restrict these transactions to debit cards, nobody could use a credit card to bet money he or she does not have. I do not think there is a bookmaker out there who would offer credit on these terms, so why should a financial institution facilitate somebody going into hock or debt for the purposes of a fun activity? An enormous level of debt can mount up as a result of this addiction. I would like to hear the Minister of State's thoughts on that, if possible. This relates to the licensing issue raised by Deputy Michael McGrath. Does the Department have any thoughts on this matter? Has it worked through what I am suggesting?
The Deputy has made an important point about something that is a real issue out there. The Department's argument is that if one uses one's debit card, people could theoretically have access to one's bank account, whereas that is not the case if one uses one's credit card. We will note the Deputy's points. I will ask the Minister to consider them. I am not making any commitment. It is clear that we need to be restrictive in this area, particularly if we are to protect minors and people with gambling addictions. It is definitely a serious issue.
I would like to point out that the debit cards I am talking about do not necessarily have to be laser cards. Some debit cards are associated with Visa and MasterCard, etc. In those cases, people cannot end up with the details in the way suggested by the Department.
I appreciate the point the Deputy is making.
The use of such cards gives one the data protection one might be looking for. The suggestion I have made would prevent many cases of addiction and abuse of the gambling system. It might encourage people to go back to the betting shops and engage in the social activity that gambling is supposed to be. The keyboard warriors might be less likely to lose the run of themselves if they are in a healthier environment.
I move amendment No 9:
In page 15, line 45, to delete "2003" and substitute "2013".
This is a technical amendment.
SECTION 13
As amendments Nos. 10 to 15, inclusive, are related, they will be discussed together.
I move amendment No. 10:
In page 18, to delete lines 31 to 35 and substitute the following:
"(3) Upon receipt of an application in accordance with this section and payment—
(a) to the Revenue Commissioners of the excise duty payable in respect of a bookmaker’s licence, or
(b) in circumstances where the applicant exercises the option under section 66C of the Finance Act 2002, to the Revenue Commissioners of the first instalment referred to in that section, and subject to subsection (4), the Revenue Commissioners shall issue to the applicant a bookmaker’s licence.".
The Bill provides for the first time for a statutory framework for the licensing of remote bookmakers and remote betting intermediaries. These licences will be valid for a two-year period. This Bill also extends the period of validity for existing bookmakers’ licences and the period for registration of bookmaking premises to two years. The Finance (No. 2) Act 2013 brought the present legislative provisions for excise duties payable on licences into line with the changes made to the licensing provisions under this Bill. The 2013 Act also provided for an increase in the excise duty payable for traditional bookmakers' licences and registration of bookmaking premises, in line with the extension of the period of validity for both to two years, and provided the option of paying the excise duty in full or in two equal instalments. These amendments bring this Bill into line with the instalment arrangements. Basically, we are providing for these moneys to be paid over two years.
I move amendment No. 11:
In page 19, to delete lines 16 to 20 and substitute the following:
"(7) Subject to any order of the District Court under section 16 (inserted by section 23 of the Betting (Amendment) Act 2014), a bookmaker's licence shall—
(a) remain in force until the licence final day next falling after the date from which that licence has effect, or
(b) where the applicant for that licence exercises the option under section 66C of the Finance Act 2002 but fails to pay the excise duty payable under section 65 of that Act on or before the date specified in subsection (1)(b)(ii)(I) of the said section 66C, remain in force until 30 November next following the grant of the licence.".
This section amends the principal Act to provide that “a bookmaker’s licence shall, in addition to authorising the licensed bookmaker concerned to carry on the business of, and act as, a bookmaker, authorise that licensed bookmaker to accept bets by remote means, provided that the value of all such bets in any year does not exceed the lower of €250,000 or 10% of the licensed bookmaker’s turnover". This has been raised with me by several independent bookmakers who accept bets by telephone. They view the threshold as quite low and feel that it should be higher. If they have to submit a separate remote bookmaker’s licence, a significant cost is incurred.
I agree with Deputy Michael McGrath. One is looking at, say, a 15 % return on €250,000, which would not really sustain a business. It might sound like much money in marginal terms but it is not an awful lot. For a small independent betting shop with no significant online base, accepting such bets is usually with individual customers who they know will not be overexposed. I suggest the threshold should be raised. Will the Minister examine it for Report Stage?
The Department will keep this under review. It must also be remembered that the EU might see a higher threshold for the independent bookmaker as giving a greater advantage to local as opposed to international bookmakers.
It could be seen as anti-competitive.
These are small independent bookmakers who would not have significant turnovers. The cost of a remote licence would be onerous on them.
Is it correct the fee for a remote bookmaker’s licence is €5,000?
Yes.
I do not know the business that well but if the margins are that tight then it would be hardly worthwhile for a bookmaker to accept telephone bets if his turnover was only €300,000. One might in fact be driving more people into online betting with such a low threshold. I just want to signal a possible Report Stage amendment and will examine this issue myself.
It would be constructive if Deputies Michael McGrath and Arthur Spring engaged with the departmental officials on this.
SECTION 14
I move amendment No. 12:
In page 20, to delete lines 40 to 46 and substitute the following:
“(3) Upon receipt of an application in accordance with this section and payment—
(a) to the Revenue Commissioners of the excise duty payable in respect of a remote bookmaker’s licence, or
(b) in circumstances where the applicant exercises the option under section 66C of the Finance Act 2002, to the Revenue Commissioners of the first instalment referred to in that section,
and subject to subsection (4), the Revenue Commissioners shall issue to the applicant a remote bookmaker’s licence.”.
I move amendment No. 13:
In page 21, to delete lines 17 to 22 and substitute the following:
“(6) Subject to any order of the District Court under section 16 (inserted by section 23 of the Betting (Amendment) Act 2014), a remote bookmaker’s licence shall—
(a) remain in force until the licence final day next falling after the date from which that licence has effect, or
(b) where the applicant for that licence exercises the option under section 66C of the Finance Act 2002 but fails to pay the excise duty payable under section 66A of that Act on or before the date specified in subsection (1)(b)(ii)(I) of the said section 66C, remain in force until 30 June next following the grant of the licence.”.
I move amendment No. 14:
In page 22, to delete lines 36 to 42 and substitute the following:
“(3) Upon receipt of an application in accordance with this section and payment—
(a) to the Revenue Commissioners of the excise duty payable in respect of a remote betting intermediary’s licence, or
(b) in circumstances where the applicant exercises the option under section 66C of the Finance Act 2002, to the Revenue Commissioners of the first instalment referred to in that section,
and subject to subsection (4), the Revenue Commissioners shall issue to the applicant a remote betting intermediary’s licence.”.
I move amendment No. 15:
In page 23, to delete lines 14 to 19 and substitute the following:
“(6) Subject to any order of the District Court under section 16 (inserted by section 23 of the Betting (Amendment) Act 2014), a betting intermediary’s licence shall—
(a) remain in force until the licence final day next falling after the date from which that licence has effect, or
(b) where the applicant for that licence exercises the option under section 66C of the Finance Act 2002 but fails to pay the excise duty payable under section 66B of that Act on or before the date specified in subsection (1)(b)(ii)(I) of the said section 66C, remain in force until 30 June next following the grant of the licence.”.
I move amendment No. 16:
In page 33, to delete lines 15 to 47.
I move amendment No. 17:
In page 34, line 1, to delete “(10) An” and substitute “(8) An”.
I move amendment No. 18:
In page 34, line 4, to delete “(11) The” and substitute “(9) The”.
Is it correct section 25 amends the opening times for bookies, allowing them to stay open until 10 p.m.?
Yes, they are allowed to be open from 7 a.m. to 10 p.m.
What are the current opening times?
It is up to 10 p.m. during summer hours and 6 p.m. in the winter.
Is it likely this legislation will be passed before the summer recess?
It still has to go through the Seanad and it is likely it will not go to that House until the end of September. The Irish Bookmakers Association is satisfied there will be enough race meetings to meet its needs and it does not have a problem with it not passing until then.
Yes, it does not have a problem with that timeline. However, problems arise if it is not passed after that.
It is planned to have it passed by then.
Does Deputy Doherty agree with the extension of the opening times, however?
The change in the opening hours is not the only consequence of the legislation. The main question about this legislation’s enactment is when can we start collecting the levy from online betting. It would be better if we could start that in July rather than in September.
That is up to us.
It is relevant to the question that has been asked about timing.
Until the legislation is passed, we will not be able to collect the levy. When companies are licensed to offer betting services in this jurisdiction, they will become liable to the taxes on bets and it will be gathered by the Revenue Commissioners in the normal way. It is expected that €20 million will be collected once the licensing regime for the online sector is in place.
Is there a loss of revenue by not passing the legislation in the Houses during the recess?
I presume the quicker it is passed, the quicker one can collect the levy.
The Deputy has not made a bet in three years.
What most people are not aware of is that all the receipts from betting we have go to the horse and greyhound fund. This levy provides an opportunity to raise moneys on new forms of betting. Other sporting organisations could benefit from this funding too rather than 100% of any bet placed on any sporting event going to the horse and greyhound fund.
Although the Department of Finance always says it cannot ring-fence money for anything, not mental health or suicide prevention, legislation was passed in 2001 to achieve this for the horse and greyhound fund. Can we ensure the receipts from this new levy will not be ring-fenced for the same fund and can we have an assurance that a different arrangement will be in place? It is highly questionable that the arrangement will still be in place for this, underpinned by the legislation. Unless it is amended or repealed, there is little we can do. I am anxious for the Minister to clarify that receipts from the fund would not be ring-fenced for the horse and greyhound fund and that we would have an understanding that the funding mechanism would, perhaps, be reviewed in the future because the legislation was passed in 2001 and we live in very different times. Many different sporting organisations would be keen to impress upon the Minister and his Department that it needs to be reviewed. While I do not take away from the validity of the fantastic resource that is horse and greyhound racing, a dedicated fund for it might be said to be unusual.
While there has traditionally been a link between revenues accruing from betting taxes and the allocation to the horse and greyhound fund, there is no hypothecation of these revenues and, therefore, there is no direct link.
It is not a tradition. It is legislated for.
I am just reading the note here. I am told it is a tradition. I can give the Deputy a note to explain the Department's view, which is that it does not apply and there is no hypothecation.
Yes, please.
All receipts from the betting levy will go to the Exchequer. The funding of the horse and greyhound fund is a matter for discussion between the Ministers for Agriculture, Food and the Marine and Public Expenditure and Reform in the context of the annual Estimates campaign. I will share the note with the Deputy and if he wishes to table an amendment-----
The Minister might give the note to the clerk to the committee.
Of course.
An interesting conversation has been opened up because an impression was given that the levy on online gambling would be able to sustain the horse and greyhound fund. Whether we like it or not, even a 1% online levy will not make up the shortfall in the fund, which the Exchequer has supplemented each year through its revenues along with the 1% levy on high street bookies. Despite the impression that the horse and greyhound fund can become self-sufficient, the Minister says the revenue goes into the Exchequer and may end up anywhere. It is interesting, to say the least, because it is not the impression the industry or I have.
Hopefully, the note will clarify it. The Minister's clear view is that there is no hypothecation or link in law. The Minister has said the more revenue he collects, the more places to which it can be distributed.
Question put and agreed to.
I move amendment No. 19:
In page 36, to delete lines 16 to 46, and in page 37, to delete lines 1 to 28 and substitute the following:
“ “Unlawful conduct
32A. (1) A person shall not provide any service or facility to a person who contravenes section 2 that—
(a) will enable the second-mentioned person to have access to or use any internet address or any internet domain (or any particular facility within such domain) for the purpose of the carrying on by the second-mentioned person of a remote bookmaking operation, or
(b) will enable any other person to have access from the State to any internet address, internet domain or particular facility within such domain for the purpose of that other person’s entering into any transaction (including the making of a bet) with the second-mentioned person in connection with a remote bookmaking operation.
(2) A person shall not advertise, or cause to be advertised, a remote bookmaking operation carried on by a person who contravenes section 2.
(3) A person shall not sell or cause to be sold by retail, or otherwise supply or cause to be supplied, to a member of the public a product that bears—
(a) the name of a person who contravenes section 2, or
(b) any trade description, designation, trademark, emblem, marketing image or logo owned or used by any person in connection with a remote bookmaking operation carried on by a person referred to in paragraph (a).
Compliance notice
32B. (1) Where the Revenue Commissioners are satisfied that a person has contravened section 32A, the Revenue Commissioners may serve a notice (in this Act referred to as a ‘compliance notice’) on that person.
(2) A compliance notice shall—
(a) state the grounds for the Revenue Commissioners’ being satisfied that there has been a contravention referred to in subsection (1),
(b) for the purpose of ensuring compliance by the person concerned with section 32A, require the person to do or refrain from doing such act or acts as is, or are, specified in the notice by such date as is so specified, and
(c) contain information regarding the bringing of an appeal under subsection (5) against the notice, including the manner in which an appeal shall be brought.
(3) A compliance notice shall not specify a date in accordance with paragraph (b) of subsection (2) that falls on or before the date by which an appeal under subsection (5) shall be brought.
(4) The Revenue Commissioners may—
(a) withdraw a compliance notice at any time, as they consider appropriate, or
(b) where no appeal is brought under this section, specify a date extending the period specified in the notice for the purposes of subsection (2)(b), and notify the person in writing accordingly.
(5) A person may appeal a compliance notice served on him or her under this section to the District Court.
(6) An appeal under this section shall be brought in the prescribed manner not later than 14 days after the service of the compliance notice concerned.
(7) The Revenue Commissioners and the appellant concerned shall be entitled to be heard and to adduce evidence at the hearing of an appeal under this section.
(8) The District Court shall, upon an appeal under this section, do one of the following:
(a) affirm the compliance notice concerned;
(b) direct the Revenue Commissioners to withdraw the compliance notice concerned.
(9) The Revenue Commissioners shall comply with a direction under subsection (8).
(10) A person who fails to comply with a compliance notice by the specified date shall be guilty of an offence.
(11) This section shall not operate to prevent or restrict—
(a) the entitlement of any person to bring proceedings for the purpose of securing compliance with this Act by a person, or
(b) the bringing or prosecuting of any proceedings for an offence under this Act.
(12) In this section ‘specified date’ means, in relation to a compliance notice—
(a) the date specified in the notice in accordance with paragraph (b) of subsection (2), where no appeal against the notice is brought under this section, or
(b) the day falling immediately after the expiration of the period of 7 days from the date on which the District Court so affirms the notice, where an appeal against the notice is brought under subsection (5) and the District Court affirms the notice in accordance with paragraph (a) of subsection (8).”.”.
I move amendment No. 20:
In page 37, line 31, to delete “32B.—A notice” and substitute “32C. A notice”.
SECTION 31
I move amendment No. 21:
In page 38, line 1, to delete “32C.—Where” and substitute “32D. Where”.
I move amendment No. 22:
In page 38, line 11, to delete “32D.—(1)(a) The” and substitute “32E. (1)(a) The”.
Amendments Nos. 23 to 25, inclusive, are related and will be discussed together.
I move amendment No. 23:
In page 39, to delete lines 35 to 41 and substitute the following:
“(a) the substitution of the following definition for the definition of “remote betting intermediary” (inserted by subparagraph (i) of paragraph (a) of subsection (1) of section 54 of the Finance (No. 2) Act 2013):
“ ‘remote betting intermediary’ means a person who is the holder of a remote betting intermediary’s licence;”,”.
Amendments Nos. 23 and 24 are required in order to define “remote betting intermediary” and “remote bookmaker” for tax purposes in the Finance Act 2002 and to better align the definitions between the Finance Act and the Betting (Amendment) Bill. Amendment No. 25 is required to remove the definition of “remote means” from section 64 of the Finance Act 2002, as this definition is no longer required in that Act.
I move amendment No. 24:
In page 39, to delete lines 46 to 48, and in page 40, to delete lines 1 to 3 and substitute the following:
“(c) the substitution of the following definition for the definition of “remote bookmaker” (inserted by subparagraph (ii) of paragraph (a) of subsection (1) of section 54 of the Finance (No. 2) Act 2013):
“ ‘remote bookmaker’ means a person who is the holder of a remote bookmaker’s licence;”,”.
I move amendment No. 25:
In page 40, to delete lines 8 to 14 and substitute the following:
“(e) the deletion of the definition of “remote means” (inserted by subparagraph (iii) of paragraph (a) of subsection (1) of section 54 of the Finance (No. 2) Act 2013).”.
Amendments Nos. 26 and 27 are cognate and will be discussed together.
I move amendment No. 26:
In page 40, line 20, to delete “€5,000” and substitute “€10,000”.
These amendments are required to reflect changes introduced in the Finance (No. 2) Act 2013 which provided for the extension of the licensing period from one year to two years and the consequent increase in excise licence fees.
I move amendment No. 27:
In page 40, line 26, to delete “€5,000” and substitute “€10,000”.
We have done this on every Stage of the legislation, which has been on the go for a considerable time. While I commend the officials on bringing forward a Bill that has not been heavily amended, they have had probably the longest period of time of any Bill I have seen. Notwithstanding the issues regarding having Commission approval, it is disappointing that we have lost tens of millions of euro of revenue because of the delay in the introduction of this charge on online gambling over the past number of years. The Finance Bill of 2009 increased the levy to 2% but it was never enacted by the then Minister, the late Deputy Brian Lenihan. This goes back a long way.
The levy must be increased. The former Minister of State, now MEP, former Deputy Brian Hayes, and the Minister, Deputy Noonan, have said we must get it across the line and then examine an increase in the levy. While it is expected that the levy will be increased, the fact that the Bill has been delayed for so long suggests that we should increase the levy now. The State badly needs the revenue. No matter when we bring in the €20 million from online gambling, the horse and greyhound fund will still need to be supplemented by Exchequer funding if it is to remain at its current level, and that sticks in my craw, particularly as cuts in different areas are announced. Although last year we examined discretionary medical cards, the Government passed a motion to put money into the horse and greyhound fund. While the industry has an economic benefit for the State, the fund goes to the winners of races in the State, and a large amount goes to certain stables, which is very difficult to swallow.
I am familiar with the economic benefits of the horse racing industry in the State. While my amendment has been ruled out of order, when the Bill comes before the Dáil in September and then goes to the Seanad, it should include an increase in the levy. Alternatively it should be addressed a few weeks later when the budget goes through. The Minister should signal his intention.
Are we missing a trick here? I ask the Minister of State and his officials to correct me if I am wrong. We are dealing with the taxing of online gambling. If I go onto the Paddy Power website and place a bet on a horse or a football match, the turnover will be taxed. However, if I go onto the Paddy Power website and play blackjack, the turnover the company makes on that is not taxed. Is that correct?
There is no betting duty on it.
We are discussing the Betting (Amendment) Bill. If we look at online gambling, sport represents a small proportion of the overall book; it is what attracts people in. The heavy money is spent on the roulette tables, the poker tables, Texas hold 'em and other such games. None of that is taxed in this country. We are taxing online gambling for the first time but we are only taxing a small part of online gambling. There is obviously difficulty with a turnover tax on some of the other forms, including roulette, Texas hold 'em, poker and blackjack. However, we can and should develop a profits tax for this. We need to move into the realm of profits, which would not be a major draw on the Exchequer. I am informed that approximately 93% of all turnover is paid out again so we would be basically taxing the same thing. By doing that, it is easier to tax the other books which would be more lucrative for the State.
I like to gamble the odd time on all of these types of books, but this is taxing a vice. It is probably the only thing left in the State that is not taxed appropriately. I am talking about online activity. I do not believe people will be turned off if there were a 3% profits tax on a bet. People will not be turned off over paying 30 cent on winnings of a tenner and if they are, they can afford it because they choose to do this; they do not have to do this. We can consider the things we have taxed in the past such as fuel to heat people's homes or to get to work in a car, or basics such putting a shirt on one's back or food on the table. This is an area where we should look at the rate. Overall we should consider whether we are really taxing gambling.
I have talked about online gambling, but there is another area of gambling. We can walk into any casino in Dublin tonight and there is no duty or tax. I accept there is tax on the profits of the company and so forth, but there is no duty. We are identifying one wee area and it took us a long time to close this area down in terms of online sports betting, but there are whole other areas we have just left out. As we struggle to balance the books in the State we should focus on this area. I encourage the Government to go down this route. Moving from a turnover tax to a profit tax is a way to capture those books and also to have a rate that ensures the industry is sustainable. It would bring in sufficient revenue to the State to fund the horse and greyhound racing fund and also to cover other areas such as gambling addiction and other areas that badly need it.
I agree with Deputy Pearse Doherty, who made a number of good points that need to be followed up on at a time when all the sporting bodies in the country are crying out for money. We all know of the positive benefits of young people especially being involved in sport. On the other hand we know of the negative consequences of people developing an unhealthy relationship with gambling. To my mind it makes perfect sense to increase the revenue yield from this source. I believe it makes much more sense to tax winnings than to tax turnover. If I won €1,000 on a bet, I would not have any problem paying €20 or €30 to the State by way of a tax.
There is also the issue of not capturing what is essentially online gambling. We need to capture it in all its forms. That issue is complex. I accept its scope is wider than the traditional bet we are capturing with this legislation. However, the debate needs to move on quite quickly to deal with those issues.
The points made by the Deputies are very well made and will need to be properly examined. As they have acknowledged, this is the start of the process. Clearly once the gambling control regulator is in place, all these issues will need to be addressed. The Deputies are pushing an open door in terms of the points they are making. I will obviously bring their points to the Minister's attention. The question of increasing the rate now from 1% would be a matter for the Finance Bill and not for this legislation. However, they have made very good points.
I have for many years suggested increasing the rate to 3%. If we were to increase the rate to 3% and without changing anything else, high street bookies would be put out of business overnight. High street bookies are going out of business overnight for other reasons, such as people moving to using mobile phones and so forth. However, there will be a certain level at which that will plateau and we are probably reaching it at this point. The betting duty is putting high street bookies out of business.
The rate needs to move to 3% and placed on the punter. At the moment the shop or company absorbs the 1%. If it were increased to 1.5% or 2% the likelihood is that the larger organisations could absorb that until they wiped out the high street bookies and then possibly they would pass it on to their customers. It has to be of a sufficient scale but not inappropriate to gamblers. I believe companies will not be able to absorb 3% and it would be passed on. It could also be done legislatively. If the Government did that overnight, it would save jobs.
I have looked at the audited accounts of some high street bookies and they have showed me the margins they are making. They have closed down shops in the past and they are closing down more. They are in debt to the Revenue and in arrangements with the Revenue because they cannot pay this. However, this should be passed on to the customer. Gambling is a vice and if I am gambling, I should know that I am paying the tax. I am not suggesting that we impose a 3% tax and leave it as it is with it being absorbed by the industry, because it cannot be absorbed. We should go back to how it used to be where it was passed on to the customer. The best way of doing that is by applying it to winnings because nobody minds having a deduction from their winnings, although some people might mind. However, it is like "take it or leave it" at that stage.
Our former colleagues, Mr. Brendan McGahon and Mr. Charlie McCreevy, made the argument in the past about doing away with betting tax. There was a major campaign at the time. It might have been in the 1980s. They succeeded and they claimed there was an exponential increase in betting as a result. The points are very well made and I think the Minister will pay attention to them.
I move amendment No. 29:
In page 41, between lines 33 and 34, to insert the following:
"38. Section 32 of the Principal Act is repealed.".
In examining the old Betting Act, the fact that the law is still in force probably signifies why we need a new gambling control Act to bring all these pieces of legislation under one umbrella. Today in law it is the case that if a bookie creates any material for distribution related to gambling odds for a football match, it is illegal and a party can be prosecuted for it. This was brought to my attention when somebody sent me a photograph from Mayo featuring our Taoiseach, Deputy Kenny, in a Paddy Power outlet, holding a sign for the odds on a match between Donegal and Mayo. I was asked if I knew this was illegal.
Who won the match?
Donegal beat Mayo. The fact this is illegal led me to examine this section of the Bill. The point of the correspondence was not that I should report the Taoiseach for involvement in illegal activity in a Paddy Power shop or the journalist or shop owner who may have breached the law when the photograph was printed. The point was instead the archaic laws which exist for this sector. A number of bookie accounts in my Twitter account are giving odds of 10/1 for Argentina to win the soccer match tonight and that type of advertising is illegal in this country. Anybody publicising odds outside a premises, whether in the newspaper or anywhere else, is breaking the law as it stands, and any citizen can report this to the Garda. That is why this element of the law should be repealed.
Paddy Power had an advertisement related to the outcome of the Oscar Pistorius trial, and in my view and that of many others it was deeply distasteful to say the least. The company is involved in innovative ways to advertise its product and some of the advertisements step over the mark, while others are just clever and cheeky. The advertisement to which I refer stepped over the mark. Nevertheless, there is nothing to prohibit any company taking out an advertisement in a national newspaper outlining odds on whether a person will be found guilty of murder, although there is a law against a local bookmaker publishing in the same newspaper odds for "Bodyke Celtic" playing "High Street United" in a local derby. That does not make sense.
This amendment seeks to repeal the section. We should be dealing with a gambling control Bill, and I hope it will tackle this issue. I am concerned that this may be put on the long finger because the Minister has changed. The gambling control Bill must be introduced as a soon as possible and it should have run along with this legislation.
Notwithstanding the Deputy's comments, the gambling control Bill is expected for early 2015. The Deputy has raised matters very well and they should be debated. It would be difficult for me to bet on Louth currently. I may have to wait until Deputy Fitzpatrick becomes the trainer again for the odds to improve again. The point is well made.
Is the amendment being pressed?
I assume Deputy's Doherty's comments are correct and we are amending the principal Act from 1932. Why are we not tidying up an obvious issue that he has raised?
I am happy to bring the comments to the Minister but I have been advised that the measure should be part of the Bill in the January 2015 legislative programme. I will bring the matter directly to the Minister's attention. It would be fine if the Deputy tabled an amendment for Report Stage.
I will not press the amendment as the Minister is not here. Perhaps better wording could be utilised but the section must be repealed. It just does not make any sense unless there is a valid argument to include it.
Of course.
It is interesting that the debate in the Houses of the Oireachtas in 1932 was that odds can be advertised but not for a local football match. That probably goes back to a time when there was plenty of fighting at matches, so it may have been an incitement.
Nothing has changed.
I will push the issue.
That is fair enough.
There is nothing to stop us removing that section.
I know what the Deputy is saying. The Minister will be happy to examine the issue.
On the off-chance that Mayo make it through the championship this year, it would be deeply regrettable if the Minister of State refused to amend the section, which could lead to the Taoiseach being arrested.
Fine.
I move amendment No. 30:
In page 41, between lines 33 and 34, to insert the following:
“Tax clearance certificate in relation to licence under Act
38. Section 1094 of the Taxes Consolidation Act 1997 is amended, in the definition of “licence” in subsection (1), by the substitution of the following paragraph for paragraph (c):
“(c) section 7(3), 7B(3) or 7C(3) of the Betting Act 1931,”.”.
This proposed insertion amends section 38 of the Bill to provide for the application of the tax clearance requirements under section 1094 of the Taxes Consolidation Act 1997 to the licenses for remote bookmakers and remote betting intermediaries.
I move amendment No. 31:
In page 41, between lines 33 and 34, to insert the following:
“38. The Minister shall direct the Revenue Commissioners to present him or her with a report on the VAT status of those in the betting industry within 3 months of the passing of this Act which will examine the past VAT liabilities of the actors in the industry.”.
This is a bit of a hobby horse of mine and although I have tried to tease out the issue through parliamentary questions, I have not been satisfied. Certain companies should have been subject to VAT but were not. Those who pay betting duty are exempt from VAT, and I am not arguing that bookies should pay VAT. Nevertheless, a number of companies operate in Ireland but do not pay betting duty or VAT. The likes of Betfair or Betdaq operate a service whereby they are an intermediary and they do not pay betting duty. They offer a service between two individuals so they are not subject to VAT. Section 34 of the Value-Added Tax Consolidation Act 2010 implies they should be subject to VAT and I do not know any other service in the State that is not subject to VAT. I am interested to hear why these companies have not paid VAT. If they paid betting duty, it would be fair enough, but they have not. They have operated here for many years without paying VAT at all on the provided service.
In Ireland the VAT Consolidation Act provides that bets placed with bookmakers or on the tote are exempt from VAT. European Court of Justice jurisprudence has confirmed the principle of VAT fiscal neutrality with gambling, namely, that the exemption applies regardless of the medium through with the bet is placed, once the services provided are identical or similar from the perspective of the consumer and meet the same needs of the consumer. This means electronically supplied gambling services that are identical or similar, from the perspective of the consumer, to those services provided by traditional bookmakers, such as those subject to betting duty, also benefit from VAT exemption. Remote bookmakers and remote betting intermediaries will continue to be exempt from VAT following the enactment of this Bill.
Let us use the Paddy Power company as an example. In this case Paddy Power online and its high street stores would be exempt from VAT but I think they should pay a betting duty. My amendment focused on betting exchanges. They do not take a bet and they do not lay a bet but provide a service for one person to lay a bet and another person to take a bet. The exchanges do not take or lay a bet but provide a service. Under section 34 of the same Act the Minister of State referenced they should be subject to VAT.
I have been advised that betting exchanges are exempt from VAT on the basis that they are in competition with bookmakers and essentially offer the same services to punters. If it is helpful, I can forward a note on this matter to the Deputy afterwards.
I have pursued this matter for a couple of years in parliamentary questions. I specifically seek the legislation that exempts them from VAT.
It is on the basis of which that the opinion is formed by the Department.
Exactly. We have lost a huge amount of money due to this provision. The exchanges set the odds across the industry in Ireland, they are massive and have not paid their tax. I do not understand why they are exempt from paying VAT. They also do not pay betting duty. If betting exchanges are in competition with bookmakers then they should pay betting duties.
We will forward a note to the committee for the Deputy.
Please provide it to the committee secretariat.
That is okay. My amendment sought to deal with this matter comprehensively. I ask that a report on VAT for exchanges and legacy issues is prepared.
The Revenue Commissioners are responsible for the administration of VAT and the tax affairs of individual taxpayers. They are independent of the Minister in this regard. Therefore, it is Revenue that would provide a note.
The secretariat will contact them.
We will forward the facts and the reasons the opinions are held.
Based on the fact that we will have the note, I presume, before Report Stage I will withdraw my amendment but I have a right to resubmit.
Amendment No. 32 is in the name of Deputy Pearse Doherty and is a new section. Amendments 32 and 34 are related and may be discussed together.
I move amendment No. 32:
In page 41, between lines 33 and 34, to insert the following:
“38. The Minister shall within 3 months of the passing of this Act present to the Houses of the Oireachtas a report on his or her future plans for betting duty and the funding of the horse racing and greyhound racing industries.”.
My amendment deals with the issue that we identified earlier such as the rate and where the betting duty goes. Is it just for the horses and greyhound funding? Is the amount provided to them at this point in time sufficient? All I ask is that we have a report within three months on the future plans for betting duty and funding for the horse and greyhound racing industries.
I concur with the Deputy. I understand that we will receive a note on these issues in advance of Report Stage
Yes.
On that basis I withdraw my amendment.
I move amendment No. 33:
In page 41, between lines 33 and 34, to insert the following:
“38. The Minister shall, within 3 months of the enactment of this Act, lay before both Houses of the Oireachtas a report on measures that will be undertaken to protect vulnerable people from engaging in harmful gambling and the manner in which remote betting intermediaries must assist in this.”.
I deeply regret that we are not taking the gambling control Bill in parallel with the Betting (Amendment) Bill, a point that has been made a number of times this evening. We are all well aware that an addiction to gambling can cause devastating societal consequences, in some cases, so we should deal with that issue now. Gambling legislation is just as important as increasing revenue for the State through betting activity. I ask the Minister of State to convey to Government that we need the gambling control Bill brought forward as quickly as possible. We will all propose specific measures that will help address the issue and Deputy Spring mentioned an innovative proposal. There are many more proposals that need to be actively considered. I withdraw my amendment but ask the Minister of State to convey my message.
The amendment deals with the important issue of how gambling affects people. Gambling is not an enjoyable experience for a large proportion of people. People chase bets and hope for a silver lining but families and lives are destroyed in the process. It would be nice if it were true that only large corporate entities created a gambling culture. However, the State encourages gambling through a lotto and the National Lottery. It is still gambling even though they use nice advertisements and all the rest. A person can go into a shop, mark numbers on a lotto slip and hand it over with his or her money to a shop assistant, which is probably less addictive, in my view and without a scientific background, than the very addictive scratch cards which are part of the national lottery. I have seen how addictive scratch cards can be with my own eyes and seen people really hopeful that they will win the next big prize. The State does very little to support gambling addiction but it has a responsibility and it is important that it contributes. I understand that only the bookmakers provide such funding at present. I want the State to take responsibility and not pass it on.
Amendment, by leave, withdrawn.
