When dealing with the gambling industry, the Irish Gambling Regulatory Authority may find enforcement challenging.
The Irish House of Representatives passed the Gambling Regulation Act of 2022. The reforms in this act include a ban on gambling advertisements from 5:30 AM to 9 PM and the establishment of a social impact fund to raise awareness about compulsive and excessive gambling.
The act also proposes the establishment of the Gambling Regulatory Authority of Ireland (GRAI), which will be responsible for a range of functions including licensing, monitoring, and controlling gambling activities within the state, maintaining a national self-exclusion register, and overseeing and enforcing compliance by licensed operators.
From RTÉ Radio 1's Drivetime, is the Gambling Regulation Act sufficient to curb gambling problems?
About one in every 30 Irish adults exhibits gambling addiction behavior, and one of the most important responsibilities of the new agency is to take measures to protect vulnerable problem gamblers. Problem gamblers are characterized by gambling beyond their means, being addicted to gambling, and being unable to quit despite the harm it causes.
This is a particularly tragic phenomenon, linked with severe economic difficulties (including debt and bankruptcy), depression and anxiety, and even suicide. Its harms often extend beyond the individual, affecting the gambler's family and friends, and causing social costs through lost work time and the need for funded treatment.
The challenges brought by gambling problems are exacerbated by their prevalence; recent figures from the Economic and Social Research Institute, reminding us that gambling issues are not a marginal problem in Irish society, limited to a few unfortunate individuals. Instead, as stated by Minister of State at the Department of Justice James Browne TD during an April debate in the House of Representatives, it is a "public health crisis".
Minister of State at the Department of Justice James Browne discussed the new gambling legislation on RTÉ Radio 1's Drivetime program
The discussions around this act show that there is an awareness of the need to address this public health crisis. Although the act removes the "vulnerable groups" category from the 2018 act, its lengthy title indicates one of its purposes is "to eliminate or reduce compulsive and excessive gambling".
Senators Lynn Ruane and Alice-Mary Higgins proposed an amendment, later withdrawn, that would have incorporated the necessity to "take measures to reduce or eliminate compulsive and problematic gambling" into one of GRAI's functions. Even without this, the proposed agency seems aware of its role in addressing gambling issues. In October 2023, the agency's incoming CEO Anne Marie Caulfield noted in an RTÉ News interview that protecting problem gamblers is a "very important theme in the legislative bill".
A notable example of the act's commitment to protecting problem gamblers is the introduction of a national self-exclusion register. Simply put, self-exclusion is a means by which problem gamblers can request not to be allowed to gamble for a specified period. Thus, the act stipulates that operators must not provide gambling services to self-excluded individuals, nor communicate with them in ways that might invite them to gamble. While it's important not to overstate the effectiveness of self-exclusion, studies have consistently shown that it has at least some effect in reducing the frequency and intensity of gambling and alleviating some symptoms of problem gambling.
It's important not to be overly optimistic about these proposed reforms. While the desire to protect problem gamblers is encouraging, the crucial factor of ensuring industry compliance cannot be overlooked. The gambling industry's revenue largely comes from problem gamblers, unsurprisingly, hence it has a strong economic incentive not to act in the best interests of gambling addicts.
This industry has many reprehensible practices, including exploiting findings from cognitive science research and using artificial intelligence algorithms to addict gamblers. In cases of self-exclusion, the motivation to not comply is particularly evident. In short, as stated by the Senate Special Committee, denying self-excluded gamblers contradicts the industry's natural business desire to "maximize profits".
The regulatory body hopes to protect problem gamblers, while the industry seeks to exploit them, and the gap between them can only be bridged by enforcement sanctions. For this purpose, the proposed agency has the authority (albeit through a complex process) to impose financial penalties (up to 10% of an operator's annual turnover or 20 million euros, whichever is greater), suspend or revoke operator licenses, and impose conditions on operator licenses.
However, the enforcement powers of the UK Gambling Commission are comparable to those of the new Irish authority, and their findings indicate that enforcement is not simply about implementing sanctions and thereby achieving compliance. For example, in a 2017 enforcement action by the UK Gambling Commission, 888 UK Limited was fined a record £7.8 million at the time for serious failures to fulfill social responsibilities, including failing to widely and long-term prevent self-excluded individuals from gambling, and failing to identify particularly severe problem gamblers' disordered gambling. This operator was not deterred; in 2022, the company was fined £9.4 million for failing to fulfill social responsibilities and anti-money laundering duties.
While the latter case's violations of social responsibilities were unrelated to self-exclusion, they were related to similar flaws in obligations to vulnerable consumers. Thus, the £7.8 million fine did not deter gambling operators from non-compliant behavior, indicating that financial penalties may not be sufficient to compel operators to fulfill their obligations to problem gamblers.
The Irish gambling regulatory landscape is currently in a period of uncertainty. While the new act responds to long-standing calls for a regulatory body, it remains unclear whether the agency will be able to control the harmful and irredeemable gambling industry. Only time will tell, but the experience of the UK Gambling Commission suggests that the Irish agency must adopt a proactive, dynamic, and research-driven enforcement approach. In particular, it must be willing to implement meaningful sanctions, including exercising the power to suspend and revoke business licenses when financial penalties fail to produce compliance.
