Review of online casinos complete, decision imminent

3 Jun 2010

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A major review of a new gambling architecture for the State – potentially creating 5,000-8,000 new jobs – is complete and a decision from the Government on changing an outdated law is imminent.

The 1956 Gaming and Lotteries Act is a major hurdle preventing Ireland from putting in place a regulatory regime that would help the country to become a major e-commerce hub for the global online-casino business.

According to a study by DKM Consultants, between 5,000 and 8,000 jobs for e-commerce professionals, web developers, accountants, business analysts and mathematicians could be created. Average pay would be €40,000 per annum.

Ireland and global casino business

If Ireland were to capture just 5pc share of the global online casino business it would represent a local sector worth €2.2bn. However, it is feared that continued delays in amending the 1956 law here could mean these opportunities might be snapped up by countries such as Spain and France.

A spokesman for the Department of Justice said that on 1 May the Minister for Justice, Dermot Ahern TD, initiated a major review of gambling from within his department.

"The review will provide Government with options for a new and comprehensive legal and organisational framework governing the gambling architecture in the State, including remote gambling. Three important considerations, which are the hallmark of most well-regulated gambling codes, inform the review."

These are:

– That young people and the vulnerable are protected.

– That gambling should in all respects be fairly and openly conducted.

– That gambling is kept free of crime.

The spokesman said the consultation phase of the review has now been completed. Since 1 May 2009, material on the department’s website in relation to this has been viewed more than 5,000 times; 71 submissions have been received from interested parties and more than 50 face-to-face meetings have been held.

"Following the settling of policy in relation to a new gambling architecture for the State, legislative proposals will be published in the normal course," the spokesman said.

Online betting tax

While this is good news for online casino businesses, betting firms, telcos and data-centre firms, the controversial news that the Government is also considering putting a tax on online betting is worrying local betting firms such as Paddy Power and Boyle Sports.

Paddy Power of Paddy Power Bookmakers said that a speech Taoiseach Brian Cowen TD gave to the horse-racing industry recently suggested the industry would receive financial support into the future through taxes on online betting.

Power said this is of concern to local firms because less than 10pc of bets that the firm takes on its PaddyPower.com website are to do with horse racing.

Jobs at Paddy Power Bookmakers

Paddy Power employs 700 people in Tallaght and has earmarked a further 350 jobs to be created in the next three years.

"Our concern is that of the Top 10 bookies in Ireland, ourselves and Boyle Sports are the only two actually based here.

"We have no problem paying an online betting tax as long as it is enforceable and others pay it, too. As employers in Ireland this is a concern."

Power said a key issue is the fact that 90pc of bets taken by the company have nothing whatsoever to do with horse racing and therefore should not be hit by the online tax. He added that some €540m over the last 10 years has been given to the horse-racing industry from betting taxes.

"We will have to look at the future of the company. There is an opportunity here. We are probably the most successful and largest indigenous e-commerce company in Ireland. We are a smart-economy company and as we grow internationally we will create more employment in Ireland.

"But we are obviously concerned that our successful business model is under threat with this new tax," Power said.

By John Kennedy

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com