CONSOLIDATED SUBMISSION

GAMING AND LEISURE ASSOCIATION OF IRELAND

Mr. Michael Walsh

Casino Gaming Control Section

Department of Justice, Equality and Law Reform

Floor 4, Phoenix House

7 - 9 Leinster Street South

Dublin 2

5 September 2008

Dear Mr. Walsh,

Re: Core Principles for a new gambling code for Ireland

The membership of the Gaming and Leisure Association, namely the Fitzwilliam

Card Club, Silks Casino Club, Atlantis Casino Club, the Westbury Club, the

Riverside Club, the Eglinton Club, Vuetec, the Gold Club Casino, the Victoria

Sporting Club and Irish Eyes Poker, respectfully submit the following core principles

which it believes must form part of a review and eventual achievement of a new

gambling code for Ireland. As existing operators, we do have unique knowledge of

the realities of the Irish casino sector – both land-based and online – and as such look

forward to sharing this expertise to help bring about a regulated gambling

environment in Ireland. Specific position papers on the vast majority of the principles

set down here will be provided to the Department of Justice in the coming weeks and

months.

The members of the Gaming & Leisure Association adhere to a self-regulatory code

of conduct (in Annex). Our members have used best endeavours to ensure proper

consumer protection during a time when no attempts were being made to regulate our

sector. Equally, our members have invested considerably in establishing best practice

in their businesses and in the development of their staff. Members of the GLAI have

also invested significant funds over the past four years to lobby Government to

regulate the casino sector in line with our 26 EU neighbours, and many would agree

that this involvement by the industry provided the necessary impetus at political level

to address the need to regulate casinos.

We firmly believe that the efforts made by our members should be rewarded under a

new regime, i.e. those members who have no criminal involvement and who have

demonstrated good corporate social responsibility should be awarded a licence. We

will strenuously oppose a tendering system approach to the initial award of licences

which would discriminate against our membership and which would only serve to

attract larger scale operations inappropriate to the Irish Market in the initial phase of

its development.

The membership of the Gaming and Leisure Association believe:

• Existing Irish gaming and betting legislation is outdated and should be

replaced by a 21st Century Gambling Code, and this within 18 months

• The application of the Gambling Code should be overseen by an independent

Regulator established specifically to regulate and control the gambling sector

as a whole

• The Gambling Code should be generic enough so as to allow the Regulator to

adapt to trends in the sector; also any proposed structures for the land based

sector should be appropriate to the Irish market, taking into account consumer

demand, social, cultural, and political sensitivities.

• The regulation of the casino sector and the remote gambling sector – the two

currently unregulated gambling activities – should happen as a matter of

urgency and should be given priority. Depending on how long this process

takes, interim licensing measures should be considered in the interests of

consumer protection.

• Consumer protection, protection of the vulnerable, keeping gambling crime

free and Corporate Social Responsibility in the provision of gambling services

must form the corner stone of the new Gambling Code

• Parity of treatment between all forms of gambling in terms of operating

conditions, including, but not exclusively, licence fees, taxation, advertising

rules, anti-money laundering obligations, must form part of the new Gambling

Code

• Analysis of other gambling regulation regimes, but not exclusively the UK

regime, should form part of the achievement of a new Gambling Code

• The regulation of gaming and betting should ensure that these services remain

commercially viable; taxation, for example, must be appropriate to the scale of

operation or sustainable in the market

• Members of the Gaming and Leisure Association should, in recognition of

their efforts to self regulate over the past five years, be given favourable status

to apply for casino and/or remote gambling licenses under any new code

• Licences to operate land based casinos should not be limited in number,

should be flexible to allow for innovation and should not be limited in time.

• Remote Gambling operators should be incentivised through an interim scheme

to establish in Ireland in anticipation of a workable regulatory regime

• The EC Treaties and the freedom to provide services must be respected when

regulating remote gambling

• The regulation of remote gambling should not be approached from the narrow

angle of tax revenue from some operators active in Ireland but rather from the

angle that Ireland can compete with jurisdictions such as the Isle of Man or

Malta and become the European Hub for remote gambling operators

The achievement of a Gambling Code which protects the vulnerable, allows for

innovation and attracts investment into Ireland is urgently required. The members of

the Gaming and Leisure Association are committed to doing their part in ensuring this

comes about in a timely manner.

Yours sincerely,

_________________

_______________

___

David Hickson, Steven Merrick,

Director, GLAI Director, GLAI

Registered Address: 104 Lower Baggot Street, Dublin 2. Co. Reg. No. 419466

Directors: Mr. Steven Merrick (Secretary), Mr. David Hickson www.glai.ie

Annex I

Code of Practice

Each member of the GLAI accepts and allows full access to an agreed, independent,

inspection committee on behalf of the Association, with a view to verifying and

confirming compliance with this Code of Practice.

Membership

• The membership of member clubs shall be restricted to persons 18 years of age or

older.

• Any person wishing to join a member club must complete a membership application

form. This completed membership form will be kept on file.

• The only ID accepted is a valid passport, a valid driver’s licence or a valid Garda ID.

No person will be accepted as a member without first producing one of the above-

mentioned forms of ID.

• Each club member shall have their photograph taken, which will then be attached to

their membership application.

• Each club member must register or be registered upon each entry to any member

club. Records of each visit must be kept on file and be available for inspection.

• Member clubs will share their database of excluded or self-excluded members in

accordance with the law.

• Member clubs will monitor unusual transactions by individual club members.

• Members will ensure that those in charge of the operation of the clubs are of suitable

character / integrity. The persons concerned shall have received training in health and

safety requirements.

Transparency

• Each member club shall establish a Members’ Committee.

• Each member club shall conduct their business with integrity, courtesy, and

professionalism.

• Member clubs shall act with due care, skill, and diligence at all times.

• Member clubs shall have regard for the interests of their members and treat them

fairly.

• Member clubs shall manage potential conflicts of interest fairly.

• Member clubs shall ensure that staff are properly trained and supervised, so that

games are conducted in a proper manner and in accordance with best practice.

• Member clubs shall ensure that the accounts/funds of club members are segregated or

‘ringfenced’ from the member clubs’ own funds.

• While member clubs are permitted to advertise, they shall endeavour to ensure that

advertising is not targeted at vulnerable groups.

• Social contact outside the club between employees and club members is not

encouraged, so as to ensure that no employee is compromised by receiving services or

gifts of any kind from club members.

Management Structures

In accordance with best practice each member club shall have an appropriate visible

management structure in place.

This may include:

• CEO / Managing Director

• Financial Controller

• Gaming Manager / Pit Boss

A compliance officer whose responsibility is to ensure that the member club adheres to the

Association’s Code of Practice shall be appointed.

Security/Cash handling

• Member clubs shall have 24-hour video recording of all activities within their club.

• Member clubs shall have appropriate management systems in place.

• Any person opening an account with a club must provide a utility bill (from within

the Republic of Ireland) confirming their address and must present their driver’s

licence, passport or Garda ID.

• All appropriate security measures should be taken to ensure staff and club members

are safe.

• Member clubs should have an appropriate cash tracking system.

• Staff shall be trained in money laundering legislation.

• Member clubs shall appoint a Money Laundering Reporting Officer a reporting

officer for money laundering issues, in accordance with the 3rd

Money Laundering

Directive.

• Member Clubs will record and monitor any unusual cash transactions by individual

members of their club.

Environmental

• Member clubs shall ensure that appropriate health & safety measures are in place for

staff and club members (health & safety statement, fire certificates, pest control).

• Member clubs shall ensure that appropriate security measures are in place to

safeguard staff and club members.

Protecting vulnerable persons from being harmed or exploited from gaming

• Members of the club shall be 18 years or older and must provide valid ID (see

membership section above).

• Employees shall endeavour to verify the age of any club member or applicant who

appears to be under 18 years of age.

• Member clubs shall make available reasonable assistance and guidance to club

members or employees who are, or may be, affected by problems related to addictive

gaming behaviour.

• Members clubs shall display contact details for appropriate help and advice centres in

an open manner.

• Member clubs shall adopt an exclusion policy for persons with, or showing signs of,

addictive gaming behaviour.

• A register of persons who have self-excluded on grounds of addictive behaviour shall

be maintained by all member clubs.

• Any ‘at risk’ behaviour which may require intervention should be noted/ recorded by

staff.

• Club members shall not be provided with credit.

• Alcohol shall not be sold on the Member club premises.

Staff Welfare

• Member clubs shall be equal opportunity employers.

• Member clubs shall provide staff with a safe working environment.

• Member clubs shall ensure their staff is properly on a PAYE payroll system.

• Member clubs shall provide separate toilet facilities for staff where required.

• Member clubs shall provide staff with a suitable rest area.

• Member clubs shall ensure that their staff is given appropriate training.

Data Protection

• Members should ensure that all computerised data on individuals is secure and that

they are in compliance with data protection rules.

Registered Address: 104 Lower Baggot Street, Dublin 2. Co. Reg. No. 419466

Directors: Mr. Steven Merrick (Secretary), Mr. David Hickson www.glai.ie

Mr. Michael Walsh

Casino Gaming Control Section Department of Justice, Equality and Law Reform

Floor 4, Phoenix House 7 - 9 Leinster Street South

Dublin 2

Dublin, 14 September 2009

Dear Mr. Walsh, Re: The regulation of remote gambling The Gaming and Leisure Association has among its membership entities involved in the provision of remote gambling services and those who wish to expand their land-based business to online platforms. Against this background, the membership has considered how it believes remote gambling should be regulated as part of a new gambling code and respectfully requests that this be given due consideration by the Casino Gaming Control Section in its endeavours to regulate remote gambling. Overall approach A regulated online gaming sector in Ireland is expected to generate by 2020 employment for 10,000 people and tax revenues for the Irish state of 229 million Euro (DKM report). There is little doubt that there is a window of opportunity in terms of establishing Ireland as a mainstream EU Member State jurisdiction for the licensing of remote gambling. This can be achieved if the regulation of this activity is approached from the perspective that Ireland can compete with jurisdictions such as the Isle of Man or Malta and become the European hub for remote gambling purposes and not solely from the perspective of ensuring tax revenue from a very small number of operators based in Ireland. Should this opportunity be grasped within the appropriate timescale, Ireland, as a gaming friendly centre of excellence, can expect to attract a reasonable portion of this dynamic industry. Moreover, this approach is the surest way to provide socially responsible and secure arena for the development of remote gaming based in Ireland. As such, the GLAI supports the establishment of a regulatory system for remote gaming in Ireland and a full impact study, technological assessment and industry analysis should be carried out in this regard. In the meantime, remote gambling operators should be incentivised through an interim scheme to establish in Ireland in anticipation of a workable regulatory regime. The Association members are of the view that interim licences can and should be granted to land-based and online operators as long as those

entities can provide all necessary documentation – such as tax clearance certificates, health and safety certificates, fire certificates, proof of age verification system etc. As part of the deliberations on the regulation of remote gambling, the regulator should also consider the ability of land-based licensed casinos to add a remote offering to their overall offering. Finally, this exercise should not in any way negatively affect today’s operation in this sphere whereby land-based entities cooperate with remote entities to provide, for example, live feeds from a remote location, in land-based premises. The regulatory regime The GLAI recognises the freedom to provide services across EU borders and as such notes that remote gambling providers licensed in another EEA Member State should not be restricted in any way from providing their services to businesses and customers in Ireland. Regardless of the platform being used, should an operator wish to provide casino services to customers in Ireland or to customers in a third country from Ireland, the rules which apply to Irish-based providers (age verification, CSR in gambling services provision, anti-money laundering rules etc.) and the freedoms accorded by the EC Treaty must be respected. A regulatory body should be responsible for the licensing and regulation of both online and land-based gaming which takes place in Ireland, regardless of where that service is provided. In order to ensure robust consumer protection and parity of treatment for ‘home grown’ operators, ex-Ireland casino operators should be obligated to apply for an authorisation from the casino gaming regulator to provide services in Ireland and must comply with some conditions relating to CSR in gambling with which all home operators have to comply. Additionally, these operators should pay tax on Gross Gaming Revenue achieved in Ireland at the same rate as that being asked of Ireland-based remote gambling operators. In parallel, these operators should be granted a tax credit in country A to account for their tax paid in country B. Finally, we respectfully submit that the means of regulation of the online sector are considerable and are cognisant of the many legal and practical issues involved. Therefore, the GLAI supports the need for a full impact study to be carried out on the online sector and would be pleased to participate in such a study at any level.

* * * * *

We hope that these comments prove useful in your deliberations and we look forward to discussing them with you at the appropriate time. Yours sincerely, _________________ David Hickson, Director, GLAI

Registered Address: 104 Lower Baggot Street, Dublin 2. Co. Reg. No. 419466

Directors: Mr. Steven Merrick (Secretary), Mr. David Hickson www.glai.ie

Mr. Michael Walsh

Casino Gaming Control Section Department of Justice, Equality and Law Reform

Floor 4, Phoenix House 7 - 9 Leinster Street South

Dublin 2

Dublin, 10th September 2009

Dear Mr. Walsh, Re: GLAI comments on ‘Gambling in Ireland’ report recommendations Although there is no commitment to introduce a Gambling Code on the basis of the recommendations set down in the ‘Gambling in Ireland’ report, the GLAI recognises that a considerable amount of thought went into these recommendations and that it is likely that they will be taken into consideration as part of the wider Gambling Sector review. As such, the GLAI takes this opportunity to set down its views on each recommendation. We look forward to discussing these with you in the coming months. 1.5.1 Establishment of an Interim Gaming Regulatory Authority Recommendation 1: The Committee recommends that once the Government has established the public policy parameters for the new regulatory system, it should establish an Interim Gaming Regulatory Authority, based within the Department of Justice, Equality and Law Reform, but with representatives from other relevant Government Departments, in order to develop the regulatory system. GLAI position: The GLAI supports the establishment of an Interim Gaming Regulatory Authority. The GLAI would appreciate a greater level of clarification / comfort as regards the operation of private members gaming clubs in the interim and from the point of licence application. The Association members are of the view that interim licences can and should be granted to land-based and online operators by this Interim Authority as long as those entities can provide all necessary documentation – such as tax clearance certificates, health and safety certificates, fire certificates, proof of age verification system etc. – to the Interim Authority. The Association would also appreciate clarification on whether the AG now advises the Department of Justice on an appropriate regulatory model as per options provided in Chapter Four of the report? What exactly is meant by ‘amendments to criminal law’ to address the current situation? What if any should be the interim legal footing of private members gaming clubs?

1.5.2 The Regulatory Body Recommendation 2: The Committee recommends that (a) from a modern regulatory perspective and in the interests of effectiveness, proportionality, transparency, accountability and consistency, and (b) based on studies of international norms as outlined in Chapter Three, the regulatory system should be responsible for the licensing and regulation of all gaming (this definition includes premises with gaming machines) in the State. GLAI position: Fully supportive. This scope should not however be allowed to unnecessarily delay the regulation of those activities – online and land-based casino gaming – which are currently completely unregulated and require urgent attention. Moreover, remote gambling operators should be incentivised through an interim scheme to establish in Ireland in anticipation of a workable regulatory regime.

1.5.3 Views on the Gaming and Lotteries Act 1956 (as amended) Recommendation 3: The Committee is of the view that the arguments against the retention of the current powers available to local authorities are overwhelming. The Committee recommends that casino and gaming operations, including premises with gaming machines or ‘amusement-with-prizes’ (AWP) machines, should be regulated and that the current powers available to local authorities under the 1956 Act should not apply. GLAI position: Fully supportive.

1.5.4 The Role of Local Authorities as per the 1956 Act Recommendation 4: The Committee recommends that the role of local authorities in relation to gaming activities should primarily be exercised through the planning process, but notes that for this to be effective there will need to be changes made to the planning regulations. In that context the deliberations of the soon to be established Task Force on issues relating to adult entertainment will need to be taken into account. GLAI position: Supportive. The regulator must not however be bound by local authority input in this regard, but rather take it on advisement. Given the link between the regulation of the casino sector and late night adult entertainment, stakeholders in the casino sector must be allowed to weigh in on both exercises. Recommendation 5: The Committee recommends that the local authority shall be a notice party in relation to all applications for licences for gaming arcades and the gaming regulatory authority shall have regard to the opinion and views of the local authority. GLAI position: Neutral, although the Association notes that the final decision to grant licences must remain the remit of the Regulator. 1.5.5 Key Principles Underlying the Provision of Gaming Services Recommendation 6: The Committee recommends that a key principle underlying the provision and regulation of all gaming in Ireland should be social responsibility, i.e. protection of children and the vulnerable. GLAI position: Supportive – this should in fact be the key principle underlying any regulatory instrument. Additional underlying principles should be to keep gambling crime free and to ensure corporate social responsibility in the provision of gambling services.

Recommendation 7: The Committee recommends that the provision of gaming services be regarded not as a right but as a privilege, which is subject to strictly enforced public policy criteria and which can be revoked, either temporarily or permanently, subject to due process, for failure to meet those criteria. The provision of gaming services shall be unlawful except pursuant to a licence issued by the gaming regulatory authority. GLAI position: In principle supportive although clarification is required with regard to various conditions relating to a licence being revoked. On what grounds would a licence be revoked or suspended? Will this level of detail be provided to licence holders / licence applicants? If a dispute arises between Regulator and licence holder, is arbitration provided? If so, by whom and will there be a strict timeline applied to this process? Finally, will this level of scrutiny be applied to all forms of gaming and gambling in Ireland? Recommendation 8: The Committee recommends that “gaming” and “betting” be treated as two completely separate types of gambling activity, which raise very distinct regulatory issues and which should be treated separately in any regulatory arrangements. The Committee considers that this is fundamental for the regulation of gaming. The Committee recommends that there should be no betting of any kind permitted on or in any licensed gaming premises. Likewise, there should be no gaming activity of any kind permitted on or in any betting or bookmakers’ premises. GLAI position: In principle supportive, although this support must be conditional upon guarantees that separate regimes will not result in discriminatory treatment between the casino / gaming sector on the one hand and the sports betting sector on the other. Suggestions, for example, later in the report relating to ‘harm’ caused to the horse racing sector by a vibrant casino sector are without foundation and should require full burden of proof by the horse racing sector. In addition, over-arching rules relating to the entire gambling and gaming sector on protection of the vulnerable, responsible gambling, taxation, advertising rules, anti-money laundering obligations etc. must not discriminate between the sub-sectors of the whole industry. The Association strongly advises that legislators examine various existing regimes, and not only the UK regime, to assess how best to achieve this balance. 1.5.6 Regulatory Consistency Recommendation 9: The Committee recommends that, with regard to the possible establishment of a new gaming regulatory authority, consideration be given to a review of the role of the various bodies and Departments with responsibilities in the area of gaming and gambling, with a view to ensuring coherent public policy. GLAI position: Supportive

1.5.7 Flexibility of Legislation Recommendation 10: The Committee recommends that sufficient flexibility be provided in any legislation so as to ensure that the gaming regulatory authority and/or the Minister may, by order, make Regulations under the Act in order to respond to technical or other developments or innovations in this rapidly evolving sector. The Committee is of the view that if this is not done the regulatory process will be unable to cope with the dynamic nature of this particular industry. GLAI position: In principle supportive. Clear justification should be required by any regulator and/or Minister, with an appeals process for stakeholders, for changes to the legislation. The white list / black list models referred to in the report are not necessarily the only tool to be used and have not always proven successful (see Italian black list for example).

1.5.8 Enforcement Recommendation 11: The Committee recommends that enforcement should be a key function of any new gaming regulatory authority (An Garda Síochána should of course continue to have a secondary enforcement role as should the Revenue Commissioners in relation to taxation matters), and that this authority should also have a prosecutorial role. Furthermore, there should be an express statutory basis for cooperation and the exchange of information between relevant agencies. GLAI position: In principle supportive, but there must be a clear arbitration and appeals process in place which is independent of the Regulator.

1.5.9 Money Laundering Recommendation 12: The Committee recommends that in the establishment of any new regulatory regime, and in order to ensure the development and implementation of successful anti-money laundering strategies, the licence awarding body must have the ability to undertake in-depth background investigations into the applicant’s financial, business and taxation history as well as any criminal or other relevant records. While the necessity for these powers extends beyond money laundering considerations alone, the Committee wishes to stress that action to prevent money laundering is not just limited to areas of finance, including appropriate financial procedures, but is multi-faceted and starts from basic licensing requirements with consideration of such matters as good character, criminal record, taxation, financial history, disclosure of shadow directors and shareholders etc.. The Committee is also satisfied that requirements of the FATF as well as EU law can be met by casinos and that the gaming regulatory authority, in consultation with appropriate parties and by reference to best practice in other countries, can ensure that the necessary procedures are in place. GLAI position: Supportive. In recognition of the unique nature of the sector, guidance notes must be provided to the licensed operators, respecting the line that exists between strict application of anti-money laundering systems on the one hand and allowing for games to actually be played uninhibited on the other. All rules applied to licensed operators should apply across all forms of gaming and gambling. 1.5.10 The Gaming Licensing Regime Recommendation 13: The Committee recommends the adoption of a restrictive licensing regime which provides the appropriate body with the power to strictly licence premises, operators, suppliers and key employees. The Committee believes that this meets the criteria for strict regulation set out by the Government as well as providing the flexibility to respond to developments and to meet public and local concerns. The appropriate regulatory authority, in the granting of licences, may have regard to the numbers and types of gaming establishments in an area. GLAI position: In principle supportive. The Association wonders whether a limited number of licences based on a strict licensing regime would recognise the need to address market demand and allow for independently run and stand-alone owned entities. A strict regime should be provided for on the basis that casinos are stand alone entities in which gaming takes place. As per that set down in pages 85 and 86 of the report, we presume existing private members gaming clubs of a certain size would apply for a “Casino” Type A or “Casino” Type A1 licence? As regards a stand-alone poker tournament, no mention is made of these but is the assumption that “Casino” Type A2 would be the appropriate instrument? We note that no mention is made of poker tournaments – these should be held under the auspices of a gaming licence in a registered and licensed gaming arcade or casino and not in pubs or restaurants (as per the rule to be applied to gaming machines).

Further thought needs to be given to the suggestion that a small number of licences sufficient to ‘saturate’ the market and generate maximum tax revenue be granted (page 76, section 4.4.4.ii.a). This may lead to the establishment of 3 or 4 ‘large / super’ casinos and leave no room for the small-medium sized casino. If one is to examine the current demand for casino-type gaming in Ireland, there is no evidence to suggest that Irish consumers require a limited number of very large casinos. Indeed given the demographics of the country and the importance of the regions in terms of population, it is quite clear that a greater number of small to medium-sized casinos would better serve consumer demand than 3 to 4 entities serving only cities. In this light, the GLAI and its members cannot support the suggestion made on page 76 of the report. Recommendation 14: The Committee recommends that the burden of proof be on the applicant seeking a licence to satisfy all the licensing requirements, whether they are the operator, maintenance, surveillance, manufacturing or key gaming personnel. GLAI position: In principle supportive. A level of detail on requirements will be required so as to allow stakeholders to prepare for this level of evidence gathering. Arbitration and right of appeal must form a part of the licensing application process. Recommendation 15: The Committee recommends that, if casinos are to be licensed, Horse Racing Ireland and Bord na gCon, should be allowed to apply for such licences subject to the appropriate planning and licensing consents and any necessary enabling legislation. GLAI position: Against. Casinos and gaming arcades should be stand-alone and independently owned entities. On the basis of the key principle to protect children and the vulnerable, the impact of having a betting, gaming and liquor licence all operating on the same premises must be addressed and is clearly not advisable. If the racing industry were to be granted casino licences, how would this impact on the cross-over of rules being applied to that sector relating to advertising, money laundering, age verification, etc.. In addition, how could the argument be made that any threatened ‘harm’ to be caused by the casino sector (which the GLAI is prepared to contest) will have to be compensated for by tax receipts from the sector if race courses themselves could operate casinos? This is simply contradictory and indeed discriminatory. The GLAI wonders how long the Exchequer intends to support an industry sector which one could argue is so long established that it should at this stage be commercially viable. Recommendation 16: The Committee recognises that, ultimately, it is for the Government to decide on what approach it wishes to take in relation to ‘racinos’ and the relationship of any casino tax take to the needs of the horse and greyhound industries. The Committee recommends that, at a minimum, the impacts of the advent or possible advent of a regulated casino sector on horse racing and greyhound racing industries be subjected to ongoing evaluation and, if a negative impact is established, appropriate ameliorative measures should be considered. GLAI position: Against. Where is the proof that a casino gamer is a racing gambler? The horse and greyhound racing sectors must not hide or be allowed to hide behind a supposed competitive threat as a means to protect their own state-supported industries. The gambling sector as a whole operates in many EU member states without one sub-sector financially supporting another – strong resistance to this notion of casinos financing racing exists. State aid concerns will arise where a state-supported entity is being further supported to the detriment of a privately owned ‘competitor’. Casinos either compete or not – you cannot on the one hand allow racing tracks to operate casinos and on the other oblige independently owned casinos to support their direct competitors. Would the same apply to casinos run by charities? Who would make a decision as to the ‘worthiness’ of the racing sector over a given charity, obliging the charity to support the racing sector? Equally, has the legislator considered what action could be taken, were a ‘racino’ negatively impacting on the business of a stand-alone casino?

Given the scale of casino operations that the Association considers appropriate to the Irish market and the anticipated level of consumer demand, it is arguable that racinos would be too large in scale and as a result inappropriate in the context of the Irish marketplace, consequently rendering them commercially unviable. Recommendation 17: The Committee recommends that registered charities be permitted to apply for a licence in their own right or in a partnership. However, a precondition to obtaining such a casino licence is the earmarking of a portion of the casino proceeds for charitable purposes. In order to avoid creating an environment of unfair competition, the Committee also recommends that the registered charity not be afforded any tax advantage in relation to the operation of a casino as compared to a commercial operator. GLAI position: In principle supportive if the licence granted is for a stand-alone casino subject to exactly the same rules and regulations as all other casinos. Once again, parity of treatment between various types of entities providing casino gaming services must be upheld. 1.5.11 Current Amusement Halls Recommendation 18: The Committee recommends that in the development of a new regulatory regime, careful consideration be given to the status of amusement halls currently licensed under the 1956 Act. GLAI position: Supportive in that the current flouting of the law with no controls in place should not be allowed to continue, purely on the basis of the need to protect children and the vulnerable. Parity of treatment between all forms of gaming as it is related to advertising, age verification, anti-money laundering obligations, taxation, responsible gaming obligations etc. must be upheld. That said, a wide-ranging review of already regulated gaming and gambling activities should not give rise to further delay in the regulation of online and land-based casino gaming. 1.5.12 Age Limits Recommendation 19: The Committee has no rigid view on the matter of age restriction other than persons younger than 18 years are not to be permitted in any licensed gaming premises, i.e. neither casinos nor gaming arcades. GLAI position: Supportive. Once again, we note that parity of treatment between all forms of gaming and gambling, land-based and remote, as it relates to underage activity must be upheld. 1.5.13 Intoxicating Liquor and Gaming Premises Recommendation 20: The Committee notes the provisions of section 9(1) of the Gaming and Lotteries Act 1956 provides that the “licensee of premises licensed for the sale of intoxicating liquor shall not permit gaming on the premises.” The Committee recommends that a casino licence shall not permit the sale of intoxicating liquor. A casino may apply for a liquor licence and such an application will be treated like any other applicant with the exception of particular considerations which the Committee regard as necessary and proportionate. GLAI position: Supportive. This is a logical way of introducing alcohol into casinos / gaming arcades. This would allow for parity between all forms of betting and gaming as regards the procurement of a liquor licence. However, this process is not that being applied to race courses and will lead to discrimination between the two sectors. Either the committee believes the two sectors compete or it does not – recommendations throughout this report, including this one, vacillate between two separate sectors versus two sectors competing, where one may cause harm to another. Any eventual legislation must deal with these discrepancies.

1.5.14 Problem Gaming: Research and Self-Exclusion Recommendation 21: The Committee recommends that any new gaming regulatory authority be empowered to commission research and to cooperate with other relevant agencies, both statutory and non-statutory, with a view to developing a body of empirical research in relation to problem gambling which can then be used to develop policies and regulations to minimise problem gaming. Such research pertaining to gambling (gaming and betting) in Ireland might best be undertaken by an existing independent body or agency with expertise in the area. Furthermore, the establishment of an independent problem gambling support group should be considered. GLAI position: Supportive. The GLAI requests the opportunity to input possibilities to this process where appropriate and would advise the legislator to further examine other jurisdictions in this regard. Recommendation 22: The Committee recommends that there be a statutory underpinning of the process of self-exclusion whereby individuals who acknowledge that they have a problem with their gambling enter into an agreement to ban them from entering, or to be removed from, specified gaming venues, on a temporary or permanent basis. GLAI position: In principle supportive, but clarification is required as to where liability lies and as to how this will be implemented in practice, and in the various platforms through which casino gaming will be permitted to be provided. 1.5.15 Taxation Recommendation 23: It is the opinion of the Committee that in addition to the normal business taxes, licensed casinos, as is the case in most jurisdictions across the globe, should pay some form of ‘gaming duty’ on the gross or net gaming revenue. In addition to this there should also be some form of licensing fee applied (e.g. premises / operator / supplier / key personnel or staff). GLAI position: In principle supportive. Taxation and licensing fees should be applied in accordance with the financial reality of the casino sector and must be appropriate to the scale of operation or sustainable in the marketplace. No regime should be so prohibitive as to eradicate any possibility of operating a small or medium sized casino. Neither a licence fee nor taxation on net or gross gaming revenues should discriminate between casino gaming and all other forms of gambling. Ultimately the taxation of the casino sector should ensure that the activity remains commercially viable based on the reality that there is demand for the activity. On taxation, were the receipts from casino taxation to be used for something specific (as opposed to going to general tax receipts), this money should be ring-fenced for responsible gambling initiatives and not for the support of a direct competitor. Recommendation 24: Taxation policy is a matter for the Minister for Finance in the first instance. On examination of casino tax rates and licensing fee structures applied in other jurisdictions, and having given due consideration to existing associated domestic taxes, it is the opinion of the Committee that a tax rate or duty higher than the 1% of turnover currently applied to off-course bookmakers is appropriate. The rate is a matter for the Minister for Finance having regard to other factors such as the expense of the licensing regime; the nature of the industry in Ireland; consideration of potential market demand and size; the impact of higher tax on the viability of both casinos and the regulatory system etc.. GLAI position: This recommendation requires further examination and can only be properly assessed as and when a licence fee figure is provided. In any case, parity of treatment between all forms of gambling in terms of licence fees and taxation must form part of the and new gambling Code.

1.5.16 Committee Views on the Current Gaming Environment - Fixed Odds Betting Terminals (FOBTs) Recommendation 25: It is the opinion of the Committee that contemporary fixed odds betting terminals (FOBTs) are to be treated as gaming machines. Gaming machines should not be permitted in bookmakers’ offices. The term/label “fixed odds betting terminal” is now somewhat superseded by the fact that many of these machines offer gaming services in addition to betting, e.g. roulette, poker, blackjack etc., and so can be classified as electronic gaming machines. It should be noted that the Committee is not opposed to the introduction of new technology into betting or bookmakers’ offices, as long as the service being provided utilising such technology is exclusively that of betting. GLAI position: Supportive. On the basis of the key principle of the protection of the vulnerable, FOBTS should only be made available in a limited number of fully licensed casinos in the state, subject to very strict controls, and not in the more relaxed environment of a high-street bookmakers of which there are nearly 1200 in the country. 1.5.17 Location of Gaming Machines Recommendation 26: The Committee recommends that gaming machines (GMs) should only be permitted in the licensed environment of a casino or gaming arcade. In addition to not being permitted in betting or bookmakers’ offices, gaming machines should not be permitted in shops, take-aways, restaurants, hotels, public houses or any other premises. GLAI position: Supportive but consideration must be given to which entity would be responsible for overseeing the correct application of this particular provision and whether changes to criminal law would be required to ensure proper enforcement. 1.5.18 Unlicensed Gaming Environments Recommendation 27: The Committee recommends that the Government send a strong message to those currently engaged in casino-style or other unlicensed gaming activities to the effect that currently unlicensed operators should be advised that, in a new and strict regulatory environment, they must not assume that they will receive an operator’s licence. The fact that they are engaged in such activities at present will not necessarily, under any new regime, guarantee them a licence. GLAI position: In principle supportive. Private members gaming clubs all understand that they would have to apply for a casino licence like all other entities. That said, they do wish to see some comfort at Ministerial level that they can continue to operate as private members gaming clubs until such a stage as a licence application has been refused and an appeals process (where appropriate) exhausted. The GLAI would appreciate a greater level of clarification / comfort as regards the operation of private members gaming clubs in the interim and from the point of licence application. The Association members are of the view that interim licences can and should be granted to land-based and online operators by this Interim Authority as long as those entities can provide all necessary documentation – such as tax clearance certificates, health and safety certificates, fire certificates, proof of age verification system etc – to the Interim Authority. The members of the Association believe that those operators who have no criminal involvement and who have demonstrated good corporate social responsibility should be awarded an interim licence in the first instance, with a view to obtaining a full licence once they have demonstrated full compliance with all regulations and guidelines put in place by any future legislation.

Recommendation 28: The Committee recommends that the Interim Gaming Regulatory Authority, which it proposes should be established to develop the regulatory system, as well as other matters, should review the current position as regards such activities with a view to reporting to the Minister for Justice, Equality and Law Reform and, if necessary, recommend appropriate interim amendments to the criminal law to deal with these issues. GLAI position: Further investigation is required here. The Association would appreciate clarification on what this would actually mean? Is the Committee suggesting that private members clubs be outlawed until such a stage as a licensing regime is in place or the exact opposite? The criminalisation of private members gaming clubs would result in loss of jobs, revenue etc. and would be challenged by the sector in the courts. Currently private members gaming clubs employ an estimated 500 people in Ireland. If properly regulated employment in the sector could grow to approx. 3,000 people, generating approx. 36 million Euro in taxes to the Irish state (DKM Report) 1.5.19 Remote Gaming Recommendation 29: The Committee recommends that a regulatory system be established for remote gaming in Ireland. A full impact study, a technological assessment and industry analysis should be carried out. EU and world-wide implications as well as issues pertaining to access to these services of minors and other vulnerable persons should also be considered. GLAI position: Supportive, but strict deadlines for this process must be in place to ensure this analysis does not delay the regulatory process – specifically for land-based and online casino gaming – further. Without these deadlines, a significant ‘window of opportunity (see below) will be missed. The members of the Association engaged in online activity respectfully suggest that the legislator examine closely the licensing regimes in place in the Isle of Man and Malta – in their estimation the licensing regime in these jurisdictions strikes the right balance required to allow a sector to grow responsibly. The regulation of remote gambling should nto be approached from the narrow angle of tax revenue from some operators active in Ireland but rather from the angle that Ireland can compete with jurisdictions such as the Isle of Man or Malta and become the European hub for remote gambling purposes. Recommendation 30: The Committee recommends that work should commence on the development of a separate regulatory framework for remote gaming, under the same regulatory authority as terrestrial gaming. The Committee notes that while the objectives and principles attached to the regulation of both remote and terrestrial gaming remain the same, the means of achieving them differ considerably. GLAI position: Supportive, but this needs to happen as a matter of urgency. The potential of the remote gambling sector is considerable. A regulated online gaming sector in Ireland is expected to generate by 2020 employment for 10,000 people and tax revenues for the Irish state of 229 million Euro (DKM report). The regulator should also consider the ability of land-based licensed casinos to add a remote offering to their overall offering. Finally, this exercise should not in any way negatively affect today’s operation in this sphere whereby land-based entities cooperate with remote entities to provide, for example, live feeds from a remote location, in land-based premises. Recommendation 31: The current state of development internationally of regulation of remote gaming, particularly the recent United States prohibition of payment mechanisms for gambling online, presents a window of opportunity for Ireland. The Committee recommends that the appropriate regulatory authority (in conjunction with other relevant Government Departments) address the concomitant regulatory challenges and provide a socially responsible and secure arena for the development of remote gaming based in Ireland. Should this opportunity be grasped within the appropriate timescale, Ireland, as a gaming friendly centre of excellence, can

reasonably expect to attract a reasonable portion of this dynamic industry, therefore yielding significant synergistic benefits as well as employment opportunities. GLAI position: Supportive, but this needs to happen as a matter of urgency. A regulated online gaming sector in Ireland is expected to generate by 2020 employment for 10,000 people and tax revenues for the Irish state of 229 million Euro (DKM report). Remote gambling operators should be incentivised through an interim scheme to establish in Ireland in anticipation of a workable regulatory regime. Recommendation 32: The Committee recommends that any development in remote gaming must be strictly regulated to protect the vulnerable, prevent criminals from entering the market and ensure that being licensed in Ireland is a trustworthy seal of approval for e-gambling customers throughout the world. Such strict regulation is in the long-term interest of the better remote gaming operators as well as the State. Further discussion with the Minister for Finance regarding possible competitive taxation rates and with other Government Departments is necessary to advance such a proposal. GLAI position: In principle supportive. The members of the Gaming and Leisure Association engaged in online activity respectfully submit that the means of regulation of the online sector are considerable and are cognisant of the many legal and practical issues involved. Therefore, reiterating the Committee's recommendation 29, the GLAI support the need for a full impact study to be carried out on the online sector and would be pleased to participate in this study at any level. In all instances, the EC treaties and the freedom to provide services across borders must be respected when regulating remote gambling.

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We hope that these comments prove useful in your deliberations and we look forward to discussing them with you at the appropriate time. Yours sincerely, _________________ David Hickson, Director, GLAI

Registered Address: 104 Lower Baggot Street, Dublin 2. Co. Reg. No. 419466

Directors: Mr. Steven Merrick (Secretary), Mr. David Hickson www.glai.ie

Mr. Michael Walsh

Casino Gaming Control Section Department of Justice, Equality and Law Reform

2nd Floor, Bishops Square Redmond’s Hill Dublin 2 30 September 2009

Dear Mr. Walsh, Re: The regulation of remote gambling II – marketing operations (‘skins’) active in the provision of front-end gambling services in Ireland Further to a brief discussion last week, we agreed to provide you with the GLAI position on how ‘skins’ as distinct from ‘operators’ should be regulated in the remote gambling environment. For the sake of clarity, an 'operator' is the company that actually runs the software that players play on, and will have a licence to operate this software in another jurisdiction. A 'skin' is a marketer of the operator's product, usually under a 'front end' system, and the skin may not have a licence of its own but rely on the operator's licence through contracts with the operator. As indicated in our submission on remote gambling, the GLAI recognises the freedom to provide services across EU borders and as such notes that remote gambling providers licenced in another EEA Member State should not be restricted in any way from providing their services to businesses and customers in Ireland. This does not preclude however the establishment of a remote gambling licence regime in Ireland, which in the case of ‘skins’ is necessary, not least because of the direct relationship between the skins and their customers. Although an operator and a skin may be offering the same service, this service is offered through a different marketing strategy or vehicle, whereby the skin's offering looks different, and indeed is different in terms of promotions, to the operators. Many consumers are not aware that the two companies, which compete directly with each other and which are owned by separate entities, are in fact using the same backend software system.1 However, the service offering, as far as the consumer in Ireland is ____________________________ 1 Examples of this type of arrangement are numerous, and include: 1. PaddyPower Alderney limited is licenced in Alderney as a provider of online gaming. Yet that company offers services operated and owned by a number of companies which have licences themselves. PaddyPowerPoker offers a poker system called iPoker, owned and operated by Playtech, a London listed company. Playtech have a licence to operate this platform. So, while PaddyPowerPoker would be the 'offerer' in Ireland to the consumer, it is in reality a front end of the iPoker network as operated by Playtech. PaddyPokerBingo is provided by Virtue fusion. PaddyPowerCasino is operated by Wager Ware. 2. BoyleSports Poker is also a front end of the iPoker Network. 3. Irish Eyes Poker is a front end of the Entraction Poker Network licenced in Malta. 4. Bruce Betting Poker is operated by the Ongame Network licenced in Kahnawake, Canada.

concerned, is provided by the website brand, whatever that may be. It is because of this and the fact that GGR tax can be accounted for and collected far easier from the skin rather than the operator that the GLAI believes that the skin itself should be allowed to apply for a licence to operate in Ireland. In addition to the recognition of this type of service offering, we also draw your attention to the fact that the skin operates on a much smaller scale than the operator, and as such, any licence fee should reflect this. The real value of licensing a skin operating in Ireland is less related to tax as it is to ensuring a high level of consumer protection for players playing on an Irish site, in Ireland. In addition, a clear licensing system for these skins should provide for employment opportunities in the sector. Finally, as the skins, through their contracts with the software providers, are utilising the operator's licence in another jurisdiction, it is our opinion that any Irish regulatory regime should undertake to recognise the licences of these other jurisdictions where situated within the EEA, and that Irish licences when awarded to skins should be awarded in a way that compliments the other licensing jurisdictions terms and conditions. In all instances, it will be imperative to ensure that lines for legal recourse for consumers against all licence holders – be they ‘local’ skins, or EEA-licenced operators - are clearly set out.

* * * * * We hope that these comments prove useful in your deliberations and we look forward to discussing them with you at the appropriate time. Yours sincerely, _________________ _______________ David Hickson Director, GLAI Registered Address: 104 Lower Baggot Street, Dublin 2. Co. Reg. No. 419466 Directors: Mr. Steven Merrick (Secretary), Mr. David Hickson www.glai.ie

Mr. Michael Walsh Casino Gaming Control Section

Department of Justice, Equality and Law Reform 2nd Floor, Bishops Square Redmond’s Hill Dublin 2

28th September 2009

Dear Mr. Walsh, Re: regulation of land-based casinos Despite the unregulated nature of the casino sector in Ireland, there are a range of entities which currently provide casino-type gaming to their customers and/or members. This ranges from poker clubs with online feeds of casino gaming into their establishment, through amusement arcades with some live gaming tables, to private members gaming clubs who provide the full range of casino services to their members. It is clear that the sector requires regulation and the GLAI is supportive of the Minister’s intention in this regard. We provide below a brief overview of elements which we believe should be considered by the Casino Gaming Control Section in its deliberations on how casino gaming should be regulated. As directed by the Casino Gaming Control Section, we have reviewed the casino licence system in other EU Member States and specifically in the UK and, where appropriate, have based our proposals on regimes already in operation within the EU. I. Casino licences – scope, number, timeline, arbitration The GLAI and its members agree that a licensing system for the provision of gaming services should be introduced and that in the event the regulatory process is prolonged

interim licenses should be issued to those entities already providing casino services, subject to compliance conditions. In a regulated environment, licences to provide casino gaming should be tiered in terms of the range of services permitted under the licence – all or a combination of Poker, Club card games, Amusement Machines with cash prizes, Gaming Machines, VLTs, Roulette, Blackjack, Punto Banco - the resulting qualification requirements, licence fee etc. A provisional licence should be granted for 12 months with the automatic grant of a full, open ended licence at the end of the 12 month period, further to an audit by the granting authority, repeated on an annual basis. Failure to consistently comply with licence conditions should result in the suspension of the licence until the Regulator can satisfy himself that the casino operator is in compliance with licence conditions. Further to a

request to comply and a failure to do so, should cause the licence to be revoked. This process should be subject to third party arbitration where appropriate. Providing casino services without a licence, or non-compliance with a licence, must be pursued by the Regulator in association with An Garda Siochana. The GLAI does not believe there is merit in limiting the number of licences to operate casinos per se, and is of the belief that market demand and geographical spread has already limited the number of casino-type clubs in operation. If licences are granted on the basis of very strict criteria which can ensure proper CSR in casino gaming, then the number of licences granted will in any event be tightly controlled by nature of those strict conditions. II. Licence to operate a casino The following services should be made permissible by the granting of a licence to operate a land-based casino service: � Poker � Club card games � Amusement Machines with cash prizes � Gaming Machines1 � VLTs � Roulette � Blackjack � Punto Banco An operator must be able to choose which services it wishes to provide and seek a licence on that basis. We foresee four categories, namely Category I – Full range of casino gaming services � Poker � Club card games � Gaming Machines: CAT A - D � VLTs � Roulette � Blackjack � Punto Banco Category II – Full range of casino gaming services – smaller stakes and payouts � Poker � Roulette � Blackjack � Punto Banco � Gaming Machines: CAT B-D

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1 CAT A: unlimited stake and prize; CAT B: High but limited stake and prize; CAT C: Medium-range and limited stake and

prize; CAT D: Low and limited stake and prize

Category III – Casino Gaming Services EXCEPT live gaming tables and highs stakes gaming machines � Poker � Amusement Machines with cash prizes � Gaming Machines: CAT C&D Category IV – Poker and low stake amusement machines. � Poker � Gaming Machines: CAT D These licence categories are simply headline categories – each category should then be broken down into what level of gaming is permitted for each category (number of gaming tables, machines, minimum / maximum stakes and payouts etc.) Finally, the possibility must be granted to some or all casinos categories to apply for a liquor licence should they so wish but such a licence would not form part of the services permitted by the license to operate a casino. 2. Licence Requirements It is clear that any licence to operate a casino must only be granted to those entities who can prove compliance with the licence conditions. Based on licences in other jurisdictions, it appears to the GLAI that the following compliance areas should form part of a licence to operate a casino. The level of compliance under each category should be subject to further discussion, but we limit our considerations here to headline categories. An application to procure a casino licence should be accompanied by: 1. Files audited accounts for the three previous years (for existing entities)

2. Tax clearance certificate issued by the Irish Revenue Commissioners

3. A probity check certificate (undertaken by the Casino Gaming Control Unit)

4. Registration for the purposes of anti-money laundering rules

5. Local authority certificates related to Health & Safety in the workplace, planning permission etc.

6. Proof of an appropriate Management Structure In addition to these ‘corporate governance’ requirements and in order to ensure proper protection of all consumers, the applicant should also be in a position to provide extensive information to the Casino Gaming Control Unit on: 1. Its self-exclusion policy

2. Its staff training in relation to CSR in gambling

3. Its credit rules

4. Its age verification process

5. Its house rules (as related to games played, tournaments etc.)

3. Licence fee and taxation As set down in the GLAI statement of principles, care is required in the setting of a tax rate and licence fee in terms of the casino sector so as to ensure that the overall financial obligation of an operator does not render the operation of a casino unviable. That said, the GLAI is of the view that all casino operators, regardless of the platform used to provide their service, should pay a basic licence fee which may be tiered on the basis of the categories above. Assuming any casino licence is structured in a basic fee + corporation tax + percentage of GGR model in terms of taxation, the margins enjoyed by the land-based as opposed to remote operators must also be considered. In this vein, land-based casinos will pay a higher percentage on GGR than their online counterparts, but in both instances the tax rates set must allow for a viable business for the operator. Taxation must not be used as a means to stifling the market, as is clearly the case in the UK. A system of fair taxation which allows small and medium-sized casinos to operate viably is entirely achievable. VAT should not apply to casino gambling, regardless of the platform used.

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We hope that these comments prove useful in your deliberations and we look forward to discussing them with you at the appropriate time. Yours sincerely, _________________ _____________

David Hickson,

Director, GLAI

Registered Address: 104 Lower Baggot Street, Dublin 2. Co. Reg. No. 419466 Directors: Mr. Steven

Merrick (Secretary), Mr. David Hickson www.glai.ie