Regulation is key to boosting tax revenues and could provide consumer protection, writes Steven Carroll.
FAILURE TO regulate the gaming industry amounted to a missed opportunity for the State to generate employment and boost tax revenues, the Gaming and Leisure Association of Ireland has said.
David Hickson, an association member and managing director of Dublin's Fitzwilliam Card Club, said the lack of regulation meant Ireland had also missed out on chances to attract lucrative online gaming companies and software developers, which would be economically advantageous as in these less certain times.
"Regulation and licensed operators will provide consumer protection, huge potential for employment, professional training opportunities and the development of a responsible policy to protect problem gamblers," he said.
Ireland is the only country in the European Union with no law governing casinos and the association, which comprises 12 private members clubs, has made representation to Dáil Éireann calling for industry wide regulation.
Hickson believes legislation could bring about the development of the online gaming industry in Ireland, which he said offered huge scope for a country with a slowing IT sector.
"The online sector has a massive potential for job creation, not just in gaming companies but for software development, customer support services and PR, on top of the tax revenue it would generate for the State," he said.
Despite the lack of regulation, a small number of high profile and high volume online gaming and software companies have partly moved their bases to Ireland.
Full Tilt Poker, one of the biggest name online poker networks, is operating out of Cherrywood in Dublin under the name Pocket Kings, while another poker network, Cake Poker, is also said to be considering a move to Ireland.
One of the largest gaming companies to have moved to Ireland is the software developer Cryptologic, which generated revenues of $19.3 million (€12.45 million) in the first quarter of this year.
The company began in Toronto, Canada almost 15 years ago and has grown steadily ever since to become one of the four largest gaming software suppliers. Its clients include big hitters in the industry such as William Hill, Littlewoods and Interpoker.
For a lot of companies who have relocated to Ireland, the State's 12½ per cent corporation tax rate has proved an incentive. However, Cryptologic chief executive Brian Hadfield said tax was not a major incentive in moving.
"We saw Ireland as a good climate to operate in and we have not been disappointed," he said.
Hadfield said Ireland was well positioned geographically for companies wishing to expand their businesses across the world.
"While our business developed we had a strong presence in the US and our market in Europe grew steadily. The Asian market was also developing and we wanted to get closer to our clients.
"Unlike many areas of industry, the Irish Industrial Development Agency, IDA Ireland, does not support gaming companies moving into the State," he said.
Hadfield said this was not a problem in Crytpologic's decision to move to Ireland.
"We chose to go in on our own and we planned how to do it well in advance . . . we knew Ireland would be a good location regardless," he added.
Last week, Minister for Justice Dermot Ahern signalled his intention to liberalise the Sate's gambling laws by legalising casinos and creating a new regulatory authority for all forms of gaming.
Speaking to The Irish Times, Mr Ahern said the existing laws on gambling were past their sell-by date but he promised no changes would be made until cross-party agreement was reached
