Ireland Rethinks Stance on Betting Tax

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Following multiple calls to reconsider, the Irish government is now going back to review the proposed 2% tax hike of the gambling and betting sector in the country.

Opposition Against Government Tax Hikes on Gambling

Ireland will now go ahead and reconsider its taxation of gambling and betting activities, sources have revealed. Previously, the Irish government announced that it would have to push up the taxation level to 2% from the current 1%. However, amid fears and threats, legislators may be brought back to the negotiation table.

While the legislation is expected to be voted through the Upper House of the Irish Parliament, and become law on January 1, 2019, last-minute changes seem to be necessary for the proper application the law without causing an exodus among bookmakers.

Finance Minister Pascal Donohoe is now reconsidering his stance from “a firm yes” to “we need more information”. Mr. Donohoe has ordered a review about the impact of the tax hike from the Finance Committee, which will be able by the end of the first quarter in 2019.

While the government is still uncertain about any adverse effects, the industry leaders have been calling for caution and warning against the “disastrous” effects that this legislation may lead to. The Irish Bookmakers Association (IBA) has been warning against the ban, cautioning that as many as 400 betting shops might be closed down and estimated 1,500 people laid off.

Debating in the Dáil, the Irish Parliament, Donohoe decided to put forth a suggestion for an adjusted tax rate for the gross profits of operators. The measure was originally proposed by a fellow Dáil member, Éireann Michael Healy-Rae and it enjoys the backing of IBA. In a sense, this is rising the tax rate without adding extra pressure on the retail industry and thus keeping bookmakers happy, and most importantly, in the country.

Mr. Donohoe however is not quite done yet and he remains available to apply adjustments to the proposed legislation, which may come after the date the tax will come into effect, January 1, 2019.

Under the new measure, shops will be charged 10% on their gross profits and online operators will be charged at 20%. As a result, IBA is convinced that the iGaming and betting sector will be bringing estimated €25 million to the country’s coffers without legislation being so stringent as to stifle small-sized businesses.

We are grateful the government have committed to doing a review early in 2019. This is critical as it will prove how a 100% increase is simply a tax on jobs and unsustainable. It cannot happen quick enough. – IBA Chair Sharon Byrne speaking to iGamingBusiness

On the other hand, the government has been hoping to raise €50 million through tax hikes, but this is an ambition that is well beyond what current operational profits allow. Ireland is a small market that has a vibrant ecosystem exactly because it’s kept fairly low-priced for bookmakers. Nevertheless, the contributions made by bookmakers under the supervision of IBA are quite substantial.

By opting for a middle-ground, Ireland will continue to enjoy the benefits of receiving financial support from its bookmakers.

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