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Changes introduced by the Gaming and Lotteries (Amendment) Act 2019

  • Ireland
  • Privacy, data protection and cybersecurity

20-10-2020

The Gaming and Lotteries (Amendment) Act 2019 (the “Act”) will come into operation on 1 December 2020. The Act is intended to update the Gaming and Lotteries Acts 1956 to 2013 as these pieces of legislation are currently considered ‘outdated’ and ‘archaic’. The Act will have benefits for those running promotional marketing campaigns in Ireland, as once it is commenced, certain promotional marketing campaigns will be permitted without the need for a lottery licence. This article will highlight the various changes introduced by the Act.

1. CHANGES TO THE PERMIT AND LICENSING APPROACH TO LOCAL GAMING AND LOTTERY ACTIVITY1 CHANGES TO THE PERMIT AND LICENSING APPROACH TO LOCAL GAMING AND LOTTERY ACTIVITY

Under the Act, there is an improved permit and licensing application process, which sets out the conditions required for promoters of gaming and lottery activity to adopt in order to avail of a permit or licence.

(i) Gaming activity

The Act introduces a new application process for a permit for gaming to be issued by a Garda Superintendent for charitable or philanthropic purposes or for private benefit. The new application process relates to games with a maximum stake of €10 and a maximum prize limit per game of €3,000. The Garda Superintendent will be required to take into consideration a number of factors including:

a) the character of the applicant, or if the applicant is a corporate entity, the person exercising control and management over the entity;
(b) the number of gaming permits already issued in the area;
(c) the suitability of the proposed premises;
(d) the type of gaming that is proposed; and
(e) whether there are charitable or philanthropic purposes involved in the gaming activity.

The new process also gives the District Court power to impose conditions limiting the hours during which gaming may be conducted, restricting the kinds of gaming, and the extent to which specific kinds of gaming may take place. In addition, under the Act, the Revenue Commissioners will be responsible for maintaining an online register of gaming licences.

(ii) Lottery activity

The Act retains the current system of lottery 'permits' and 'licences', but introduces some substantive changes to the conditions applying to these systems.

Lottery Permit

Lottery permits will continue to be granted by the applicant’s local Garda Superintendent but a new extended notice period of 60 days will apply to these applications. The maximum prize limit remains at €5,000 and the cost of the lottery ticket cannot exceed €10.  If the cumulative value of the prizes in a lottery exceeds €5,000, the only option available under the Act is to obtain a lottery licence.

A further introduction made by the Act relates to situations where the lottery is held to raise funds for a charitable organisation, the permit holder can only retain up to 5% of the proceeds.

Lottery Licence

Lottery licences can continue to be granted by the District Court under the Act. In order to avail of this licence, the applicant is required to apply to the District Court in which the lottery is to be promoted at least 60 days before the first day on which it is intended to promote the lottery. The Judge of the District Court shall have regard to the following factors:

(a) the character of the applicant;
(b) the number of periodical lotteries already operating in the locality; and
(c) the purpose of the lottery.

This provides the District Court with added flexibility than under previous legislation to decide whether to grant a licence.

The weekly prize cap of €30,000 will continue to apply with the inclusion of an additional cap of €360,000 for once-off annual prizes.

In terms of the distribution of the proceeds of a lottery under the Act, to obtain a licence, the applicant cannot derive any personal profit from the lottery. A number of new thresholds were introduced under the Act which includes:

(a) a maximum of 75% may be allocated to prizes;
(b) a minimum of 25% must be allocated to charitable or philanthropic purposes; and
(c) a maximum of 25% may be retained by the licence-holder for promotional expenses.

The Act requires that every ticket, or the relevant premises, display the value of each prize and the name of the intended beneficiary, and of the total proceeds.

Charitable Lotteries

Lotteries promoted for the benefit of a charitable or philanthropic purpose, and not for the promoter’s benefit, will not be required to have a permit or licence provided:

(a) the prize will be limited to €1,000;
(b) no more than 1,500 tickets at a maximum price of €5 can be sold; and
(c) the promoter does not receive a personal profit and has not conducted such a charitable lottery during the previous 3 months.

(iii) Promotional Marketing

The Act introduced a significant change for marketing agencies and brands who organise prize draws as part of promotional marketing campaigns. Under the Act, promotions that form part of marketing activity will not need a licence or permit to run such promotions provided certain conditions are satisfied. This includes:

(a) the total value of the prizes is €2,500 or less; and
(b) there is no charge for participating in the promotion or redeeming the prize (apart from the purchase price of the product which is subject to the promotional activity).

2. CHANGES TO GAMING MACHINE STAKES AND PRIZE LIMITS

The Act also makes changes to gaming machine stakes and prize limits. Under the Act, gaming machines and all other gaming where the maximum stake is €5 and the maximum prize that can be won by any player is €500, a gaming licence is required. This can be obtained from the Revenue Commissioners.

Before a licence can be granted, the applicant seeking the licence must obtain a certificate from the District Court. The conditions that can be attached to such certificates have changed under the Act. In terms of limiting the conditions that the District Court can impose in respect of such certificates, the District Court can no longer impose conditions relating to age, stake or prize limits. However, the District Court can impose conditions in respect of the hours in which gaming can be carried on and restricting different types of gaming that can be conducted. One restriction that remains is that the District Court may only grant such certificates where the local authority has passed a resolution to permit amusement halls and funfairs in the respective area.

No more than 75% of the total takings from a bingo hall may be allocated to prizes and at least 25% should be allocated to charitable or philanthropic purposes. Under previous legislation, at least 25% of takings were required to go to charitable causes, but the amount allocated to prizes was capped at 50%.

3. AGE LIMIT

Under previous legislation, there was no standard legal age for gambling as various pieces of legislation contained different age limits. The new Act introduces an age limit of 18 years for all gaming and lottery activities, including tote betting.

4. PROSECUTION

It is an offence to run a lottery in contravention of the Act. If convicted summarily, a fine of up to €5,000 and/or imprisonment for a term not exceeding 6 months could be imposed.  If convicted on indictment, a fine of up to €50,000 and/or imprisonment for a term not exceeding 2 years could be imposed.

There are also other penalties that can be imposed for individuals who obstruct Gardaí in carrying out their responsibilities under the Act, and to those who make false statements in applications for licences/permits.

5. IMPLICATIONS OF THE GAMING AND LOTTERIES (AMENDMENT) ACT 2019

Once the Act takes effect on 1 December 2020, operators will need to adapt commercial models, products and marketing campaigns to take account of these new changes to the permit and licensing regimes, promotional marketing, gaming machine and prize stakes and age limits. It is imperative that operators are aware of the changes under the Act as the penalties for acting in contravention of the Act are higher than under previous legislation.

For further information on this topic please contact:

Marie McGinley, Partner and Head of IP, Technology & DP - mariemcginley@eversheds-sutherland.ie

Neasa Ní Ghráda, Senior Associate in IP, Technology & DP - neasanighrada@eversheds-sutherland.ie

Kirsty Farrell, Solicitor in IP, Technology & DP – kirstyfarrell@eversheds-sutherland.ie