Population July 2013: 4.8 million
GDP 2012: 147 Billion EUR
GDP per capita: 32,000
Taxation for Lotteries: None
Online Taxation:
1% on turnover and
15% on betting exchanges (expected)
   

LEGISLATION

Two laws shape the Irish legal framework in relation to games of chance: the Gaming and Lotteries Act from 1956 and the National Lottery Act from 1986. To operate a lottery in Ireland, a permit from a superintendent of the Irish police (small lotteries) or a licence from a District Court (large lotteries) is needed. All lotteries operate under the supervision of the Department of Justice, Equality and Law Reform, except for the National Lottery, which is controlled by the Department of Finance.

Next to the National Lottery, some smaller lotteries are allowed: private lotteries (held by and for a club or society), occasional lotteries (with permits granted by the police), periodical lotteries (with licenses granted by the District Court) and lotteries held at certain events, such as concerts. All lotteries must serve a charitable purpose. The promotion of foreign lotteries in Ireland is prohibited.

The Gaming and Lotteries Act 1956 is currently being reviewed by the Government.

ONLINE LEGISLATION

Internet gambling in Ireland was legalized in 2003, but concrete rules governing online gambling in the country are still in the making. The Irish legislator therefore tolerates online betting offered by licensed land-based bookmakers, which are taxed with a 1% tax on turnover. The result of this legal gap is that many foreign operators offer their online gambling products in Ireland, without paying taxes or fulfilling minimum technical requirements and taking consumer protection measures.

In order to tackle illegal operators and implement coherent gambling legislation, the Irish government has worked on new gambling legislation the last couple of years. The government is reforming the Betting Bill in order to create a level playing field and a fair gambling environment. In order to complete the legislation, the Irish government proposed two new laws in 2012 and 2013. The 2012 Betting (Amendment) Bill proposes legislation which regulates licenses and taxation for online betting. The second Gambling Control Bill is expected to regulate other forms of online gambling, but not before 2016.

The Betting (Amendment) Bill requires of all online bookmakers and betting exchanges that transact with customers in Ireland to obtain a licence and pay taxes, equal to what is now demanded of land-based operators in Ireland. Online bookmakers will pay a 1% tax on turnover over their Ireland-derived revenue. Betting exchanges will pay a 15% tax on their Ireland-derived commission charges. The online betting market in Ireland has been estimated to be worth € 1.6 billion a year, which would deliver the government € 16 million in taxes annually.

The Betting (Amendment) Bill also states that unlicensed operators must block access from people in Ireland or risk incurring extensive sanctions. Carrying on business as an unlicensed bookmaker will constitute an offence and persons guilty of such an offense could be liable for fines of up to € 100,000.

ONLINE GAMBLING OPERATORS

Internet gambling in the country was legalized in 2003, but complete rules governing online gambling in the country still have to be worked out. Until now the legislator has tolerated online betting offered by a licensed land-based bookmaker in Ireland, but foreign operators can offer their products as well without legal consequences. The National Lottery has launched its online gambling site in 2009, which saw its online sales increase up to € 6.1 million (↑65%) in 2011. The Rehab Lotteries has also provided online and mobile games at www.rehabbingo.com and www.abmobile.ie.


CHARITY LOTTERIES

In Ireland, there has been a tradition going back to the 1940s of charities using lottery games to raise funds. With the Gaming and Lotteries Act of 1956, all lotteries were prohibited except those serving a charitable purpose. It introduced a cap on prizes at £ 500 (Irish pounds) a week for each lottery. The National Lottery Act of 1986 created the National Lottery, which was exempted from a cap on prizes. Many of the established charities who were traditionally dependent to some degree on lotteries for fundraising purposes protested at what they perceived as unfair competition and the negative effect this would have on their fundraising operations. The cap on prizes for charity lotteries was raised several times, to currently € 30,000 per week in total prizes per licence.

Yet the National Lottery remains an effective monopoly, having currently gained a 98% market share. In 1997, the Minister for Finance responded to continued protests with the Charitable Lotteries Scheme. This Scheme provides for a fund which effectively redistributes surplus from the National Lottery to charity lotteries. Currently however, 35% of the revenues of the fund comes from the Central Exchequer. The overall objective was to assist charities whose comparable lotteries have been adversely affected by the National Lottery. However, the use and effectiveness of the Scheme has been reviewed, and in part due to the severe budget cuts for the Irish central government, a phase out of the Scheme was announced.

Several charity lotteries were dependent on the Scheme while operating at a loss. The main recipient of the fund, Rehab Lotteries, asked for a judicial review of the decision to end the Scheme. It recently lost the case.

Rehab Lotteries is the main player in the charity lottery arena today. Other not-for-profit organisations such as the Asthma Society of Ireland, Gael Linn, The Irish Cancer Society, the Polio Fellowship of Ireland, the Irish Society for the Prevention of Cruelty to Children and the Irish Lung Foundation also operate charity lotteries on a smaller scale.

  • REHAB LOTTERIES

    Rehab Lotteries Ltd. was established in 1987 and manages the lottery activities of the Rehab Group. The Rehab Group is a not- for-profit organisation that provides training, employment, health and social care and commercial services for 56,000 people each year, including the disabled people and people who are socially marginalised. Their main focus is on Ireland, but over the next three years they will expand their operations into the UK, Poland and in the Netherlands. The aim of the Rehab Group is to support 75,000 people by 2015.

    In addition to the funds which it raises from its sales of lottery tickets, Rehab receives an annual distribution from the Charitable Lotteries Fund. This Fund was established in 1987 by the Irish government to increase the income of charitable lottery promoters that experience difficulties in competing with the National Lottery.

    The Rehab Group employs 2,500 staff based in Ireland and another 1,000 in England, Scotland, Wales, Poland and the Netherlands. Another 115 jobs have been created on Rehab Group construction projects in Limerick, Portlaoise and Sligo.

    Rehab’s traditional business has been selling scratch card lottery games through a network of 1,300 retail agents. In more recent years, it has also provided online and mobile games at www.rehabbingo.com For more information visit: www.rehab.ie

As far as we know, no other Irish lotteries exist that meet the criteria of a charity lottery. The National Lottery mentioned below does, however, distribute part of its sales to good causes.


OTHER LOTTERIES

  • NATIONAL LOTTERY

    After the National Lottery Act came into force, the national Irish post company, An Post (publicly owned), obtained the license to run the national lottery in 1987. It has since been involved in the running of the lottery. Previously, the Minister of Finance held 20% of the shares in the National Lottery, while the remaining 80% belonged to An Post. In 2013, the licence for the National Lottery was put to tender, and subsequently awarded to a consortium of the incumbent An Post and Camelot Group. The latter is a British company and runs the National Lottery of the United Kingdom. The licence was awarded by the Minister for Public Expenditure and Reform.

    The consortium, called Premier Lotteries Ireland, paid € 405 million for a 20 year licence. € 200 million of the sales price is destined for the construction of a new children’s hospital. Previously, all net proceeds of the lottery were distributed to good causes, at a minimum of 30.5% of revenue (i.e. sales). Under the new licence conditions 65% of gross gaming revenues (GGR, sales minus prizes) must be contributed to charity and non-profit groups. This is expected to amount to about 29% of sales.

    The National Lottery offers scratch card games and draw games, such as lotto and EuroMillions. The lotto games are the most popular; in 2011 they represented half of the total sales. In addition, the lottery has television shows lsuch as TellyBingo and In The Spark. The new owners will attempt to grow the online sales and games branch. Currently, shops and other outlets are the most important points of sale for the lottery.

    In 2012, total sales amounted to € 735 million (↓3,5%). Around € 406.4 million (55.2%) was paid out as prize money1, and 30.5% (€ 225.3 million) was donated to good causes in the categories mentioned above. Since its establishment in 1987 the lottery has raised € 4.2 billion for charities. For more information go to: www.lotto.ie

PROGNOSIS

The main discussions in Ireland are the new Betting (Amendment) Bill which will regulate online gambling. The discussion on online gambling mainly concerns the implementation of the legislation, which will tax online operators and introduce a stricter regime to protect society against the negative impacts of gambling. The means to achieve these goals are still open for discussion, but a rigorous approach to illegal websites is a viable option. Website blocking and payment blocking are regulatory options that can help to tackle illegal online gambling sites.