The Competition for the Licence

The Department of Public Expenditure and Reform recently announced an invitation for Expressions of Interest from parties wishing to participate in the competition for the award of a 20 year exclusive licence to operate the National Lottery in Ireland.

This tender process, which is expected to run through the summer, will result in the licence being awarded to the successful operator in November 2013. In preparation for the awarding of the new licence, the Government have passed the National Lottery Act 2012.

The National Lottery Act 2012

The National Lottery Act 2012 (the "Act") was signed into law by the President on 14 May and will pave the way for the Government to sell a 20 year licence to provide the Irish national lottery.

The sale of the lottery licence has received widespread publicity due in part to the fact that part of the upfront fee for the licence has been earmarked for the construction of a national children's hospital.

Features of the Act

The Act (which is awaiting commencement) is notable for a number of features:

  • It will create a new statutory regulator, the Office of Regulator of the National Lottery (the "Lottery Regulator"). The functions of the Lottery Regulator will include ensuring that the national lottery is run in accordance with the licence conditions, that the interests of the participants in the national lottery are protected and that the long term sustainability of the national lottery is safeguarded.
  • The total value of prizes made available to the public in lottery games must be equal to or not less than 50% of moneys received by the operator. The Lottery Regulator is also tasked with seeking to ensure that revenues allocated for payment by the operator into a Central Fund (a fund for charitable purposes), are as great as possible.
  • The Act allows for the holding of a competition in respect of the grant of the new lottery licence. The Minister may make a direction to the Lottery Regulator in relation to the next licence setting out the duration of the licence, the financial arrangements regarding the award of the licence and the terms of the competition granting the licence. Once in place, the operator may not transfer or alienate the licence without consent of Regulator.
  • The Act also sets down certain conditions governing the provision of national lottery services. A licence issued pursuant to the Act will contain a code of practice regarding the operation of the National Lottery to be complied with by the operator.
  • The Act provides for the winding up of the An Post National Lottery Company. Any interest in any property held by An Post National Lottery Company in trust for the state will be transferred to the Minister. The Minister may in turn permit the new operator to use this property.
  • Part 6 of the Act gives the Lottery Regulator certain powers in respect of enforcement and in particular the ability to investigate the affairs of the operator of the lottery. The operator must co-operate with any investigation and supply an investigator with such necessary information as they may require. Failure to co-operate in such an investigation is an offence which attracts a class A fine on summary conviction. The Lottery Regulator also has power to revoke the licence in a number of scenarios.
  • The Act is another step on the road to reforming Ireland's gambling laws. It has been speculated (though not confirmed) that the Regulator of the National Lottery might eventually be given a broader regulatory function in relation to other forms of gambling.

Our Gaming and Betting Practice

Arthur Cox has Ireland's leading practice in the area of betting and gaming. For many years, we have advised Ireland's leading betting operators, industry bodies and multi-national operators and suppliers who have chosen Ireland as a venue to host some or all of their IT infrastructure and/or corporate headquarters. Our practice extends to social gaming and gambling. Partner Rob Corbet is widely regarded as a leading authority in the area of online gambling regulation. Rob and associate Chris Bollard have authored the Irish Chapter of "Gaming Law – European Reference Series" which was published in 2012.

Our expertise extends across the full range of legal issues arising in the online and land-based sector including:

  • Establishing and operating a lawful online betting / gaming facility in Ireland
  • The regulation of bookmakers under the Betting Act 1931
  • The application and enforcement of the Gaming and Lotteries Act 1956 (as amended) in respect of the provision of poker, casino and bingo services
  • The legal treatment of betting exchanges, spread betting operators, totalisators / pari-mutual wagers, contracts for differences and other innovative betting models
  • The enforceability of gambling contracts
  • Cross jurisdictional issues
  • Licensing, IPR and white labelling arrangements
  • The operation and promotion of private members clubs
  • Lawful promotion and operation of competitions
  • The reform of Irish gaming law in respect of the online and land-based casino and gaming sector
  • The tax treatment of betting and gaming activity and commercial agreements

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.