THE GOVERNMENT will introduce legislation amending the Gaming and Lotteries Act next month following intervention by the European Commission.
The change will allow Irish consumers to buy British premium bonds and other similar products across Europe for the first time.
The Act, in place since 1956, prohibits Irish residents from investing in prize bond-type investments in other EU countries deeming them to be lotteries. That stance, however, has been determined to run counter to EU rules.
The decision follows a complaint from an Irishwoman who returned here after years living abroad and wanted to continue to invest in British premium bonds.
She had been able to invest in the premium bonds while living both in Britain and elsewhere in Europe, and had some success with the investments. However, she was informed that, under section 34(1) of the Gaming and Lotteries Act 1956, she could invest in Irish prize bonds, and not similar products in other countries.
Prize bonds are State-guaranteed investments where, instead of interest, purchasers have the opportunity to win tax-free prizes.
Owners can win more than once on each bond as they are entered in regular draws. The move is likely to affect sales of Irish prize bonds, as consumers are tempted by higher prizes elsewhere.
Irish prize bond draws take place weekly, with maximum prizes of €20,000. There are also 12 monthly draws - eight of them with maximum prizes of €500,000 and the others offering €1 million.
There are over 2,500 prizes a week - the vast majority of them at €75. The bond can be redeemed for cash at face value at any time.
In the UK, premium bond prize draws are held every month with two top prizes of £1 million (€1.27 million) and £1.65 million in other prizes - most for sums of £50 - although over 2,300 monthly prizes are of £1,000 or more.
It is understood that the State argued that its prohibition on investment in foreign lotteries and gaming had been designed to protect Irish consumers.
The case was sent to Europe in 2006 and in October last year the Government was informed that the European Commission disputed its classification of British Premium Bonds as a lottery.
It also said the Irish law might contravene EU rules on the free movement of capital and services. The "letter of formal notice" sent last October is the first step in the EU's infringement procedure.
The Government has decided to amend the 1956 Act by statutory instrument to allow purchase of "premium bond-type products" by Irish residents.
European law requires that the amending legislation be circulated to all member states. They have a three-month window to submit observations on proposed changes.
That period expires on September 18th. A spokeswoman for the Department of Justice said that "subject to there being no substantive observations or objections by member states to the proposed change", the statutory instrument will be introduced after that date.
