The collection of offshore betting tax moved significantly closer this week when the Betting (Amendment) Bill passed through the Seanad. The Bill is being fast-tracked to the Committee stage next week and is expected to be signed into law in October, though there are some obstacles to be overcome.

Along with dealing with offshore betting tax, the Bill caters for the extended opening hours for betting shops in winter months. Irish Bookmaker Association chairperson Sharon Byrne reported: “Several issues were raised by Europe with the Bill. This means that betting shops will have to close at 6.30pm for at least another month during the standstill period.

“It is thought that the issues raised can be resolved but, nevertheless, they are the cause of 600 part-time staff not having work for at least another month. If the Department of Finance is unable to resolve the issues raised within the month the delay could be indefinite.”

This week’s Seanad debate was introduced by Minister for Finance Michael Noonan. He said the Bill was “designed to provide a regulatory system for remote bookmakers and betting intermediaries, otherwise known as betting exchanges, offering betting services in Ireland, regardless of their location. In addition, it provides for fair and equal treatment of all bookmakers, traditional and remote, and betting exchanges offering services in Ireland.”

Provision was made in the Finance Act 2011 for the taxation of remote bookmakers and betting exchanges, subject to a ministerial commencement order. The Bill seeks to bring all remote bookmakers and betting intermediaries into the licensing and taxation regime.

OFFENDERS PROSECUTED

Under the proposed legislation, telephone and internet betting companies, such as Paddy Power, will have to apply for licences to do business with Irish citizens. If they fail to comply with the new licensing laws, they will be guilty of an offence and prosecuted.

Minister Noonan explained: “Revenue will operate a new model for enforcing licence compliance by unlicensed remote operators. Given the practical considerations associated with prosecuting unlicensed operators located outside the State, the Bill enables Revenue to take effective action to prevent unlicensed operators carrying on business in the State. Where a remote operator fails to comply with a Revenue notice to become licensed or cease offering services in the State, Revenue may issue a compliance notice to internet service providers, advertisers or persons promoting products in the state prohibiting them from providing services for the unlicensed remote operator concerned.”

The Minister added: “Given the complex way in which the international debit and credit card payment system works, the most effective way of preventing unlicensed operators from receiving payments from consumers in the State is to work with the international payment services industry.

PAYMENTS BLOCKED

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 from using their payment systems to carry on illegal betting operations in the State. Banking and Payments Federation Ireland has indicated its commitment in principle to concluding an agreement with Revenue for this purpose.

“Action to prevent internet access by unlicensed operators to Irish consumers and prevent unlicensed operators from advertising here and using credit card payment systems for accepting payments from Irish consumers provides effective tools for enforcing compliance by remote operators carrying on business in the State.

“I believe the main operators in the Irish market will comply with the law and welcome the opportunity to become licensed in order 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 risk reputational damage to the operator in the eyes of gambling regulators in other jurisdictions. 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 on winning bets.”