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The Luck of the Irish

Gambling legislation could herald the introduction of casinos to the Emerald Isle

The Luck of the Irish

The gambling industry in Ireland has grown significantly in recent years. In the past, efforts were made to establish a large casino in the Phoenix Park area of Dublin, but these were not successful. Since then the Irish economy has grown and is set to double its size in the next 15 years. Standards of living have increased and the gaming and gambling sector has been boosted by the fact that the average person now has more disposable income. The growth of private casinos and the influence of the internet are rapidly changing the picture of gambling in Ireland. However, the laws governing the sector are widely accepted to be outdated and in need of reform. The government has signaled its intention to bring in the necessary reforms, which are encapsulated below.

Size of the Market
Irish people gamble approximately €70 million per week. That figure is set to rise to €100 million within the next two years. The National Lottery enjoys annual gaming revenue of €578 million and on-course race betting through Tote Ireland stands at about €47 million. Online gambling is now estimated to be growing at a rate of 70 percent per year. On a per-capita basis these figures indicate that the Irish market is similar to that of the U.K. Also, a significant number of non-nationals are active punters.

All of this indicates that by 2009 the annual spend on gambling within the Irish economy could stand at around €5.2 billion, nearly 5 percent of GNP. As many online gambling outlets currently channel much of their business through offshore companies, which do not have to levy Irish betting tax and thus for which no official numbers are available, the real numbers quoted could be even higher.

Considering the growth of internet gambling and the popularity of games like roulette and poker in recent years, the public perception of casino-type gambling is changing. However, there is no contemporary research that reveals the views of the general public on the matter. Likewise, to date there has been no concerted effort to convince the public that a casino can have a positive rather than a negative effect. What is clear is that proper regulation of the market could lead to significant benefits for the industry, the exchequer and the general public.

The Experience of Other Countries
Many countries and regions, including Russia, South America, North Africa, the Caribbean and others, experienced great difficulties when casinos were originally introduced. In most cases this was due to a lack of understanding of how to promote the business and how to protect the business. These two basic factors stemmed from the lack of interest each respective government had in the casino industry.

When the 1968 Gaming Act was passed in the U.K., a gaming board was also formed within the government to oversee and administrate the industry. It was decided by this board that any member of staff who worked for the casino on the gaming floor must be licensed by the government-dealers, inspectors, pit bosses, managers and others. It did not include reception staff, waitresses, cleaners and other non-gaming support personnel. This single act of issuing gaming staff with a government license did a lot for the integrity and protection of the business, because it prohibited licenses to those with previous criminal convictions.

So far, the Irish government seems to be taking rational and logical steps to decide how gaming will be implemented in the nation.

Key Recommendations
An interdepartmental group was formed in the late 1990s to undertake a review of the Gaming and Lotteries Acts as it existed between 1956 and 1986. This group made its report to the government in 2000. The key recommendations which they made included the following:
• Existing acts are no longer appropriate to current needs and have been overtaken both by technology and society. There is a need for a modern regulatory structure which will also provide the public with the required safeguards.
• Irish society has conflicting images of gambling. For instance, while horse racing and the National Lottery and radio bingo are seen as acceptable, gambling in the form of casinos suffers from a more negative perception.
• Internationally, gambling has grown over the last 20 years. Internet gambling has significantly increased in Ireland in recent years.
• There is a need for a more balanced approach than the original 1956 act, which is very restrictive.
• While amendments to the current legislation may be a helpful interim measure, there is a clear need for completely new legislation in this area.
• A gaming and lotteries authority should be set up.
• There is a need for much greater consultation with all affected parties.
• Local authorities should still retain their control in relation to gaming and gambling venues, albeit with some changes.
• Premises permitting gaming should continue to require a licence for their activities.
• The definitions of gaming machines should be updated to remove the scope for circumvention of the law.
• An increase in the stake and prize limits for machines to 50 cents and €20 respectively.
• The ban on casino-type gambling should be retained based upon a government decision in 1996.
When the report was published, the government undertook to bring forward the necessary regulatory framework. The group received a number of submissions both for and against casino development in Ireland. However, as no specific reference was made to casinos in the group’s terms of reference, they took a largely neutral view, saying that arguments could be made on both sides but that in light of the government’s decision in 1996 not to allow casinos, they were not in a position to make any recommendation in this area other than to reaffirm the prohibition contained in the 1956 act.

There are still some points, even with the above notations, that need to be clarified.

If we accept that the current gaming laws are in need of a revamp, we need to clarify and distinguish between an arcade and a casino. An arcade is usually defined as a beachfront holiday amusement center where all the family can be entertained. The reality is quite the reverse in Ireland, where high stakes are played on slot machines and often family holidays are destroyed. These premises are usually very inviting-no membership is required-and hard gambling is available. In effect, such premises are providing casino-style gambling under the guise of family entertainment.

For a business like a slot arcade to conform to proper legislation, the arcade would have to define itself simply as a family business, adult business, arcade or casino.

A family business arcade would have very small-stake slot machines deemed to be available for fun and amusement. This would need to be strictly enforced.

A casino requires a minimum entry age-unlike an arcade-and that age is 21. You cannot easily access a casino in Ireland as they have a membership procedure in force.

There should be high-stake slot machines inside a casino. The question of how many slot machines a casino is allowed should be dependent on the number of table games present. For example, for every roulette or blackjack table, three slot machines would be allowed. This regulation has been used successfully in other jurisdictions and keeps the business defined as a casino for taxation purposes. It does not allow a crossover to a 24-hour slot parlor. It also protects the young and the vulnerable as access is restricted.

Growth of Private Casinos
Ireland has seen significant growth in recent years in the area of private casinos. These small casinos are able to operate in a grey area under the current legislation. Members are presumed to be betting between each other and not against the house. Although there is nothing in the law to say this is legal, there is nothing to say that it is illegal either. It should be noted that the number of these clubs doubled in the period from 2006 to the present, following the announcement by the then-minister of justice that casino legislation was on the way. There were 20-25 clubs in 2006. That figure has grown to around 50.

It is relatively easy to obtain access to these clubs. The public are often admitted as guests or signed up as members ?on-the-spot? when they arrive at the club. It is clear that in the long term Ireland cannot afford to allow this type of casino to continue to grow. Without any form of regulation, eventually this will present opportunities for criminal involvement and money laundering. It will be harder to attract the international corporate casino companies to the nation if we have a casino in every town in Ireland. The majority of those involved in the industry do not want this and would therefore welcome sensible regulation of the market.

Content of New Legislation
New legislation should focus on a number of key priorities to ensure that Ireland develops a safe and progressive gaming industry.
• Ownership of casinos: Directors, shareholders and all operatives should be free from any previous criminal convictions and meet a series of minimum standards.
• Gaming staff: Everyone who works in the gaming area should be required to obtain a license from the government, or in conjunction with the Gardai or police.
• Taxation: It can be quite complex to accurately tax a casino’s revenue, but over the last 15-20 years significant progress has been made and there are various options that need to be discussed. Taxation could be affected in a major way depending on whether or not an Irish gaming board is formed. For example, a government official is present at the close of business every day to determine the casino’s result in countries like Spain. In any case, efforts should be made to demonstrate to government officials that a lower tax rate means more investment, jobs, infrastructure improvements and so on.
• Integrity: A competent regulatory system should be set up so that the operations and the games are conducted in accordance with reliability and honest fair play.
• Money laundering: This issue can be addressed in exactly the same fashion as with banks and building societies (credit unions). Any license that is issued, whether it be to operator, executive or employee, can also be revoked if the establishment fails to carry out its duties with due care and responsibility. The final responsibility lies with the management of the casino, so policing itself should be the policy of any responsible casino club.
• Games permitted: There is a wide selection of games separate from slot machines available in the market today. These games should be studied carefully, as some of these games do not give the customer fair play. In some countries a casino operator can put virtually any type of game he wants onto the casino floor. This should not be the case in Ireland. Of course, the basic games like blackjack and roulette, which are played all over the world, all have edges in favor of the house. But these edges are considered fair internationally and are 0.47 percent on blackjack and 2.25 percent on single-zero roulette. If these edges did not exist, a casino would not be a viable commercial proposition. In addition, the size of the stakes allowed to be played needs to be discussed.
• Where should the casinos be located: This is a complex question which needs to be thoroughly discussed and vetted. Items to be considered include the population of the town or city, location within a given jurisdiction and distance from another casino, the size of the proposed casino, and specific negotiations between the issuer of the license, bidders and town planners.
• Availability of alcohol: The serving of alcohol should be based on local laws and should not be an incentive to visit a casino. For example, if restaurants and pubs cease serving alcohol at 2 a.m., the casino should be required to do the same. The issue of providing free drinks to punters should be evaluated as well.
• Protect the vulnerable: There should be a strict age policy that specifies a minimum age of 21 to enter a casino, to prevent minors from gambling. Efforts should be made to implement responsible gaming programs that prevent problem gamblers from being harmed. Ultimately, however, it is the professionalism of the management which will ensure that customers are protected, which refers once again to the issuing of individual gaming licenses.

Making the Case
More Irish people are gambling today than was the case in the early 1990s when casinos were not favored. The Irish punters’ views have changed dramatically over this period, with many people actively participating in gambling either online or in casinos.

Ireland needs to make sure that bidders understand that a license is a privilege, not a right. Any license that is issued must come with a set of rules, and if it is deemed that the rules have not been adhered to, then that license must be revoked.

If we are to have legislation, we must get fully behind it to establish a confidence and integrity within the industry. Casino staff must feel pride in their work and not be frowned upon by family and friends. Like any other international business, Ireland will be competing on the world stage for tourism. All over the world, casinos have strong links with golf and horse racing through sponsorship, partnerships and other arrangements. We must encourage these relationships in Ireland as well.

With the correct regulation and oversight, the Irish casino market can grow in a socially responsible fashion-for the benefit of the companies involved, the government, the community and the employees.

JJ Woods is director of operations for Atlantic Casino Consultants, which he founded in 2005. Woods was born in Ireland but left in the 1970s to live in London, where he started a career in banking. He later trained in the casino industry, and over the last 25 years, Woods has dedicated his career to the design, opening and management of casinos around the world.

JJ Woods is director of operations for Atlantic Casino Consultants, which he founded in 2005. Woods was born in Ireland but left in the 1970s to live in London, where he started a career in banking. He later trained in the casino industry, and over the last 25 years, Woods has dedicated his career to the design, opening and management of casinos around the world.

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