The new regulatory authority for gambling is to be welcomed. Except, it doesn’t actually exist yet. All that happened this week was the Cabinet approved new legislation and a chief executive has been appointed.
There isn’t actually a regulator yet. This is because there has been zero sense of urgency from government about this issue for some time. How long is some time?
Well Justice Minister Helen McEntee said during the week that as a former minister with responsibility for mental health, she has “seen the damaging impact gambling addiction can have on people and families, particularly on their mental health”.
How come after nearly 12 years of her party being in government, we are now finally getting close to having a regulator, but aren’t quite there yet?
The political timeline on this issue has been shameful and it makes comments about understanding the damage gambling addiction can cause sound hollow.
Dermot Ahern was justice minister in 2008 when he published the outcome of a report on gambling regulation in Ireland. A year-and-a-half later, a newspaper headline in December 2010 read: “Ahern publishes options for regulating gambling.”
Here we are, 12 years later, and with an explosion in online gambling and technology during that period, the regulation will have to wait until 2023.
Bear in mind we have had two former chairmen of the biggest gambling company in Europe, formerly Paddy Power but now called Flutter Entertainment, say several years ago that we really needed regulation.
We have had years of a kind of self-regulation in the sector while the main players have said publicly they were all in favour of regulation.
In case you are wondering how bad exploitative practices might be in gambling in Ireland, the answer is that without a regulator we have no idea.
A useful place to look for an assessment is across the water in the UK, where they have had a strong regulatory regime for gambling and a highly legally empowered enforcement commission legislation was enacted in 2005.
Yet, in the first 10 months of 2022, the Gambling Commission in the UK still had to issue 12 fines and two licence suspensions. The fines totalled a staggering £53.5m (€61m).
It had given a customer it knew was an NHS worker earning £1,400 a month a monthly deposit cap of £1,300
If that is the level of sharp practice and irresponsibility going on under the nose of a regulator with strong enforcement powers, what must it be like in Ireland with no regulator at all?
In the UK, firms have been fined for all kinds of breaches of the rules. The biggest fine of £17m was awarded this year against Entain, a firm that had “completely unacceptable anti-money laundering and safer gambling failures”, according to the regulator. Operators were reminded they must never place commercial considerations over compliance.
“This is the second time this operator has fallen foul of rules in place to make gambling safer and crime free.”
Gambling operator 888 was fined £9.4m for several breaches relating to social responsibility and anti-money laundering protocols.
The firm had not effectively identified players at risk of harm because their policies determined financial checks should be carried out after a customer had deposited £40,000.
888 had not carried out a customer interaction with a customer who lost £37,000 in a six-week period during the Covid-19 pandemic.
And it had given a customer it knew was an NHS worker earning £1,400 a month a monthly deposit cap of £1,300.
Is it possible that once you cross the Irish Sea there is a huge change in corporate culture in this sector which means this kind of thing doesn’t happen? I doubt it.
Any advancement of gambling regulation in Ireland should be welcomed because it involves going from zero to one or two. Based on the UK experience, our new regulator will be knee deep in rule breaches and fines every year for many years to come.
The sooner they start the better.
Forget Twitter for a moment. If you want to get a sense of what is really going on in the tech sector, look at Wayflyer, the Irish unicorn firm that is shedding 40pc of its workforce.
Twitter has been caught in a double whammy of industry and Elon Musk issues. Wayflyer is purely exposed to what is happening in its international markets.
After buying Twitter for $44bn (€44bn) Musk is likely to have lumped $12bn of bank borrowings associated with the deal on to the company. If it is paying an interest rate of 5pc on that debt, then Twitter has to make $600m in interest payments every year. This is $600m more than it had to pay last year or the year before that.
If you were one of the investors and you stuck $50m into Wayflyer, you would own just 3.1pc of the company
Wayflyer is a fast-growing business aimed at providing affordable revenue-based finance to smaller companies. It has been very successful to date and it raised $150m in its last funding round earlier this year which valued the company at $1.6bn.
Put it this way, if you were one of the investors and you stuck $50m into Wayflyer, you would own just 3.1pc of the company.
Wayflyer needs smaller firms to commit to borrowing money from them often to fund expansion. That decision will depend on how those customers see their turnover going and how they see the short term future trading environment.
A general downturn affects all of that.
Wayflyer also needs a steady supply of cash to lend out and so it works better in a low interest rate environment, where it can source funds more cheaply. We are now seeing in so many countries the highest inflation in decades and higher interest rates as a result.
It is also interesting and encouraging to see Wayflyer, as an Irish company, protect its Irish jobs.
With a total cull of 40pc across the group, the Irish operation is losing a net 60 out of 220 employees here.
In one way, the remaining employee numbers are returning to where they were just 10 months ago. But a lot has changed in that 10 months and I am sure management would love for everything else to be back where it was at the start of 2022.
Environment Minister Eamon Ryan said twice on radio this week how favourable wind conditions meant around 70pc of our power generation had come from wind on certain days in recent weeks.
This is a positive, but there is little sign of it translating into lower electricity prices. Given that the raw material is free, it should begin to make some impact on price.
Wind energy providers deny they are making super profits from higher electricity prices because they say they are tied into existing price supply agreements. However, SSE Airtricity made a half year operating profit this year of €17m compared to a loss of €3.4m a year earlier.
The company also said it would not make a full year profit this year in order to keep prices lower. It sounds admirable but it also looks like wind energy providers have been pulling profits out of the air.