There has recently been strong speculation that Fixed Odds Betting Terminals will be introduced in Ireland.

Fixed Odds Betting Terminals (FOBTs) have been a regular feature in UK licensed betting offices since the mid to late 1990s. It is fair to say that FOBTs are old news when it comes to the UK, but FOBTs, if introduced, will be ground breaking in the Irish gambling sector. Currently, there is strong speculation that FOBTs will be introduced into licensed betting offices in Ireland in the next twelve months or so. However, licensed betting offices are not the only places that FOBTs could be introduced. Other operators such as amusement halls, licensed premises and private member club casinos would also be very interested in introducing FOBTs into their premises.

An FOBT consists of a touch screen and/or button functionality terminal which displays particular events (e.g. virtual horse/dog racing and roulette). The events represented on the screen or terminals are the visual expression of the results of automated draws from a random number generator, which determines the outcome of the event. Unlike traditional gaming machines, where the results are predetermined on site, the events on the FOBT are not predetermined and the random number generator is located off site. Essentially, the bookmaker or other operator offers bets to customers on the outcome of the events shown on the terminal at a fixed rate of return. The customer can place bets on the machine and watch the outcome of the virtual horse race or roulette on the terminal screen.

One might think that it is somewhat strange that Irish bookmakers, amusement operators and publicans have not yet followed UK bookmakers in introducing FOBTs, especially given their success in UK betting offices. In relation to the licensed betting offices, both Irish and UK bookmakers argue that they are experiencing a high level of competition from off shore internet and telephone betting, as well as the increasing number of private members club casinos in Ireland. The Irish National Lottery has also attracted the casual bettor away from the betting shops with escalating jackpots and a wide variety of scratch cards. Publicans have also seen their profits decrease with the introduction of the smoking ban and, consequently, are keen to find new ways of diversification.

In response to this level of competition, bookmakers have responded by introducing new betting products. The introduction of the National Lottery in Ireland in 1987 and in the UK in 1994 prompted the development of 'numbers betting' products. These products appeal to a more 'chance' driven audience, albeit through the same regulated environment of the licensed betting office. For example, bookmakers have introduced a variety of number based betting opportunities, including virtual horse and dog racing, betting on the results of the lotteries and other numbers products such as 49's. Some would argue that the FOBT is merely a technical and logical development of such products and many in the industry would like to introduce such machines into their premises. Bookmakers and publicans are at the head of the queue.

So what is the underlying reason for the reluctance of Irish bookmakers to introduce FOBTs into licensed betting offices? Irish bookmakers are well aware of the historical experience of the UK and, in particular, the case between The Gaming Board of Great Britain v Association of British Bookmakers. In this case, the Gaming Board of Great Britain alleged that FOBTs involved 'gaming' within the meaning of the UK Gaming Act 1968, with the result that the use of them in licensed betting offices was alleged to be illegal. This case settled on the basis that a limited number of FOBTs were allowed in each betting office subject to bookmakers adopting the Code of Practice Governing the Supply and Use of Fixed Odds Betting Terminals in Licensed Betting Offices.

Due to the fact that the case settled, there is now a lack of judicial guidance in the area, a fact that is not lost on Irish bookmakers. Accordingly, it seems that the main reason for the reluctance of the Irish bookmaking industry is the lack of legislative and judicial clarity in this area. After all, the relevant legislation - namely the Betting Act 1931 (as amended) and the Gaming & Lotteries Acts 1956 (as amended) - pre-dates the technology driving these products now entering into the marketplace.

The position in relation to the publicans is clearer and their reluctance to introducing slot machines or gaming machines is obvious. The Gaming and Lotteries Acts 1956 (as amended) prohibits gaming on licensed premises and accordingly, unless legislation is changed, publicans could not install slot or gaming machines on licensed premises . It is suspected that publicans may well wish to lobby for a change in legislation.

In Ireland, the principal legal issue is whether the operation of FOBTs constitutes a 'bet' or 'gaming' and if the latter, whether it would constitute 'unlawful gaming' under the Gaming and Lotteries Acts 1956 (as amended).

At the core of whether FOBTs constitute 'unlawful gaming' is whether the making of a bet at a FOBT constitutes the 'playing of a game' .

Bookmakers would contend that the FOBT is merely a bet acceptance terminal and not a gaming machine. The contrary argument is that the operator of a FOBT is playing a game and is interacting with a machine similar to a normal gaming machine. Over the past year, there has been speculation in newspapers surrounding the intention of bookmakers to install FOBTs .

Indeed, according to those newspaper reports, FOBTs were expected to be introduced in December 2006, but a statement to the industry from the then Minister for Justice, Equality and Law Reform apparently prompted bookmakers to think twice. The Minister expressed a view in Dáil Eireann (Irish Parliament) that 'fixed odds gaming machines are illegal and they are liable to be seized from anyone who installs them'. In June 2007, a new Minister for Justice, Equality and Law Reform will be appointed and it will be very interesting to see whether the new Minister takes the same view.

The Gaming and Lotteries Acts 1956 (as amended) provides that a member of An Garda Siochana (Irish police) may seize any 'gaming instrument' which is being used for unlawful gaming and following conviction be liable for forfeiture . Fines and a term of imprisonment may also be imposed .

A judicial decision that the use of a FOBT constituted 'gaming' in Irish law would expose a bookmaker to a number of difficulties. A conviction under the Gaming and Lotteries Acts 1956 (as amended) is one ground for the police authorities to refuse to issue a Certificate of Personal Fitness, as required for the renewal of a bookmaker's licence. In addition, if a bookmaker is convicted of an offence including an offence under the Gaming and Lotteries Acts 1956 (as amended), the Court in sentencing the bookmaker is empowered to revoke the bookmaker's licence if the Court is of the view that the offence committed was of such a nature or character, or was committed in such circumstances, that the commission of the offence rendered such bookmaker unfit to hold a bookmakers licence.

Further consequences arise for a bookmaker under the Betting Act 1931. Section 19 (3) of the Betting Act 1931 prevents the carrying on of any business other than that of bookmaking at the registered premises. Section 20(1) prevents 'the maintenance within registered premises of any attraction (other than the mere carrying on of the business of bookmaking) which causes or encourages or is likely to cause or encourage persons to congregate in such premises".

It has widely been publicised that a Committee on the Regulation of Casinos has been established in Ireland to report to the Minister for Justice, Equality and Law Reform as to the possibilities for a legislative basis for the strict regulation of casino style operations in the State. The Report of the Committee on the Regulation is Casinos still has not been published and it is not certain whether the issue of FOBTs will be addressed in the Report. Commentators and industry body statements suggest that certain submissions did not address casino operations alone. However, given the soundings from the last Minister for Justice, Equality and Law Reform, it will be no surprise if FOBTs are mentioned in the Report, and hopefully some clarity will be provided.

In the UK, FOBTs were first introduced into licensed betting offices. It is expected that the same approach will be taken in Ireland. The difficulty that Irish operators have at the moment is the lack of legal certainty in the area. Operators examining FOBTs are attempting to interpret FOBTs in light of legislation that pre-dates even the invention of the computer, not to mention FOBTs. FOBTs are being mooted as an important product to assist bookmakers, publicans, amusement operators and private member club casino operators and others to increase turnover. Unfortunately, the legislative environment is unclear and interesting times lie ahead if FOBTs are introduced into licensed betting offices or elsewhere in Ireland.

For further information please contact Áine Matthews.

May 2007.

This article was first published in the worldonlinegamblinglawreport,
Volume 6, Issue 5, May 2007.