by Cian Clinch July-29-2024 in Commercial & Business
Introduction
After a nine-month legislative pause, the Gambling Regulation Bill (“the Bill”) was again the subject of legislative scrutiny in the Dáil recently; in particular certain aspects of the legislation which have been described as potentially having a detrimental effect on charitable organisations in Ireland. In short, the legislation proposes that all organisations involved in a “relevant gambling activity” will be required to obtain a gambling licence. The application process for such a licence is quite burdensome and the Bill proposes a number of similarly exacting ongoing obligations for licensees. Furthermore, “relevant gambling activity” is quite broadly defined and includes “any lottery activity or product”. As such, the legislation will require any charity wishing to host any lottery-related fundraising activities to first obtain a licence (except in circumstances where the value of the winnings do not exceed €2,000; the minimum payment to enter is not more than €5, and the maximum number of tickets sold is not more than 1,500). This note will consider this most recent round of legislative scrutiny from the perspective of charitable organisations.
No Carve out for Charitable Organisations
During the most recent Dáil debate on this legislation, two proposed amendments – both of which would, if accepted, have had the effect of excluding from the remit of the Bill any charitable organisations registered under the Charities Act 2009 (“the 2009 Act”) – were defeated by 57-68 votes and 55-69 votes. The main opposition to such a carve out appears to be that the Bill is not designed to regulate specific operators, but rather a particular behaviour (i.e. gambling).
Another factor considered during the Dáil debate was the need to sufficiently regulate the sector and ensure that bad actors did not abuse their positions within charities for personal gain. This position doesn’t factor in the already extensive obligations on charities regarding financial accountability in their fundraising efforts that are contained in Part 3 of the 2009 Act. It is also worth noting that one of the failed amendments referred to above contained the caveat that the carve out would only apply in circumstances where the activities of the relevant charitable organisation are for “the sole benefit of the organisation”. The purpose of this “sole benefit of the organisation” requirement was to prevent bad actors from “piggybacking” on charitable organisations as a way to seek to circumvent the provisions of the Bill for profit. It is arguable that the limited nature of this proposed carve out, as well as the existing regulatory requirements imposed on charities by the 2009 Act, would have been sufficient to prevent any mala fides in respect of charitable organisations.
Some Notable Amendments for Charitable Organisations
There are, however, some notable amendments to the Bill from the perspective of charitable organisations. Firstly, section 141 previously prohibited the advertisement of a relevant gambling activity on “television, radio or on-demand audio-visual media service between 5:30am and 9:00pm”. Section 138 provided for a blanket ban on social media advertising, unless the targeted recipient of that advertising has subscribed and opted into receiving gambling related advertising from that sender (e.g., is a Facebook Subscriber). Following the most recent debates in the Oireachtas, a new subsection has been inserted into both provisions, providing that neither shall apply in the case of a charitable organisation’s “relevant gambling activities”, so long as the maximum winnings for said activity do not exceed €10,000. While it was argued by certain members of the Dáil that the €10,000 threshold is too low and will still leave too many charities falling within the ambit of the above legislative provisions, these amendments do acknowledge the distinction between large-scale betting companies and charitable organisations in terms of the purpose of their operations, their advertising budgets and capacity, and their intended target audience. These amendments will also provide a tangible benefit to charitable organisations in terms of advertising and promotion.
Furthermore, section 148 of the Bill previously envisaged a blanket prohibition on licensees from offering inducements to participate in gambling activities. However, this has changed following the most recent stage of legislative scrutiny, by allowing for the making of inducements in principle. Inducements are now permitted under the Bill in circumstances where they are made available to members of the public generally, as opposed to being targeted at a specific person or group of persons. While this amendment applies to all licence holders under the Bill, it will certainly benefit charitable organisations. Under the previous version of section 148, charitable organisations would have been prohibited from attempting to induce persons to participate in one of its fundraising activities, irrespective of the fact that the inducement was directed at the general public. As such, any inducement to enter a charitable organisation’s fundraising event (for example: “buy one ticket, get one free”) would have been prohibited. Under the amended provision, charitable organisations will be permitted to offer such inducements as long as they are made to the public generally. It is important to note that the permissibility of inducements under the legislation will also be subject to any ministerial regulations passed.
Conclusion
Despite the lack of a carve out provision in the Bill, the above amendments should be welcomed by charitable organisations in Ireland. More broadly, however, it remains to be seen the precise impact that the Bill, once enacted, will have on charitable organisations, in terms of the administrative burden of applying for a licence and ensuring compliance with the provisions of the legislation. Many provisions of the Bill leave over the specifics of the regulatory framework to either the Minister or the Gambling Regulatory Authority (also to be established under the legislation).
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About the Author
Cian Clinch
Cian is a partner in the Commercial & Business team at Hayes solicitors. He predominantly specialises in commercial litigation and dispute resolution and has acted for a variety of companies and financial institutions in contract, debt, insolvency, restructuring and recovery matters.