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Northern Ireland’s gambling laws – changes afoot

Northern Ireland's Executive announced last month that it intends to update the province's outdated gambling laws to align them more with those that operate throughout the rest of the UK.

March 2013

What are the main motivations behind the announced review of Northern Ireland’s gambling laws, do you think?

The current gambling law in Northern Ireland (NI) is complicated, written in an antiquated style (which makes it difficult for businesses to navigate) and much of it is overly-restrictive compared with other markets. The review is much needed. The rules, for example, on prize competitions do not permit people in NI to participate in prize competitions and free draws on the same basis as those in the rest of the UK. The fact that bets placed with bookmakers remain unenforceable, treated as "gentlemen's agreements", also emphasises the need to modernise the current law.

complete a surveyAnother motivation is the NI Executive's priority to minimise the harmful effects of gambling. NI's Department of Social Development (DSD) has released survey results which indicate that one in 50 adults in NI has a gambling problem; four times higher than in Great Britain. The introduction of modern forms of gambling (such as online and through interactive television) has undoubtedly made gambling more accessible than was the case when NI's gambling law was passed in 1985. These modern forms of gambling clearly need legal recognition if problem gambling is to be effectively tackled in NI.

How similar do you envision the NI laws will end up in comparison with the rest of the UK?

The literature review discussed in the Consultation Document published by the NI Executive in 2011 concluded that the current system in Great Britain is the simplest, most efficient and easy to understand. This is a clear indication that elements of the Great Britain regime will be seen in future legislation for NI.

The UK Government is regulating the activities of online gambling operators based overseas and has recently published the draft Gambling (Licensing & Advertising) Bill. This proposed legislation requires all operators (irrespective of where they are based in the world) to obtain a licence from the UK's Gambling Commission to deal with British consumers. It seems unlikely that there will be separate legislation in NI to regulate operators based overseas as this issue is clearly being addressed by the UK Government.

There is also little incentive for the NI Executive to attempt to regulate online gambling operators based overseas as the levying of duty on gambling is a reserved matter for the UK Government and the NI Executive has no relevant fiscal powers.

The NI Executive's statement covers amendments to several areas of gambling but not online gambling – has online gambling been excluded entirely and why is this the case?

Globe in handIt is unlikely that there will be separate legislation in NI to regulate the activities of online gambling operators based overseas as this issue is currently being addressed by the UK Government. There is also little incentive for the NI Executive to attempt to regulate online gambling operators based overseas as the levying of duty on gambling is a reserved matter for the UK Government and the NI Executive has no relevant fiscal powers.

The NI Executive will have noted that recent proposals of the UK Government to strengthen the regulation of online gambling operators based overseas. In December 2012, the UK Government published the draft Gambling (Licensing & Advertising) Bill which will require all operators (irrespective of where they are based in the world) to obtain a licence from the UK's Gambling Commission to deal with British consumers. These measures will also help to protect consumers based in NI as it is likely that online gambling operators active in NI are also active in Great Britain.

Do you think that NI's Executive is mistaken not to consider a reform of online gambling laws at this time?

The online gambling sector is not easy to regulate as it is a fast-moving, innovative, market. The online gambling sector in NI is small and limited in scope, relative to other jurisdictions. The NI Executive appears therefore unsurprisingly reluctant to agree to the creation of an independent regulatory body (similar to the Gambling Commission) which would be costly and bureaucratic.

In any event, it could be said that the changes proposed by the UK Government to regulate online gambling operators is sufficiently robust. This is because the Gambling (Licensing & Advertising) Bill which, if passed into law, will require all operators (irrespective of where they are based in the world) to obtain a licence from the UK's Gambling Commission to deal with British consumers. Those online gambling operators who target the Great British (who almost certainly target the UK as a whole) will be regulated by the UK Gambling Commission – therefore there is little need for the NI Executive to reform its online gambling laws (or lack of them!).

How will NI's rules on prize competitions and free draws be amended?

Although the draft legislation has not yet been published, it is likely to enable people in NI to participate in prize competitions and free draws on the same basis as those in the rest of the UK.

The current position

No 1 badgeIn NI there is a general prohibition on any prize competition which involves forecasting the result of an event in which success does not depend on a substantial degree of skill.

Companies in Great Britain promoting UK-wide prize competitions associated with the purchase of a product/service must either: (i) exclude NI from their competitions, (iI) offer a free entry route to NI participants; or (iii) offer a free entry route throughout the UK.

The proposed position

The position in NI will be the same as that in Great Britain.

Prize competitions (where the outcome is determined by the application of skill, judgement or knowledge) and genuine free draws in Great Britain are free from control under the Gambling Act 2005. They can be run for commercial or private gain and can be used as a fun way of offering prizes or promoting a product. The law in Great Britain is written in such a way as to keep a clear boundary between these activities and what otherwise may constitute an illegal lottery. Lotteries are the preserve of good causes and may be organised subject to strict controls.

If you have any questions on this article please contact us.

Four Leaf Clover
Graham Hann

Graham gives his views on the rationale for the announcement and speculate how the NI laws will end up in comparison with the rest of the UK.

"Although the draft legislation has not yet been published, it is likely to enable people in NI to participate in prize competitions and free draws on the same basis as those in the rest of the UK."