The Irish blood boils at the news that the government has decided to double the gambling tax and foist it on sports and racing. What does this mean for the industry? Lay-offs, dipping revenue and the withdrawal of some of the flagship names from the country
Taking a Chance at Taxation
Ireland has officially done it. The country has concluded legal actions that will see gambling taxes doubled. In a sense, this brings the long polemic to an end, but after the shock has subsided, analysts expect the real drawbacks of this move to come in plain sight.
On Tuesday, the Irish government confirmed that all sports and racing companies in general will have to contribute 2% of their total revenue as tax. The sum is definitely steep, but it will be accompanied by a slew of other changes intended to make life for the average punter easier.
However, the increase of the tax rise on betting exchanges jump to 25% from previously 15% is quite the reason for concern. All of these modifications will come in force as of January 1, 2019.
The new and arguably onerous legislation was passed under the veneer of inaction. In his speech to Irish lawmakers, Ireland’s Minister of Finance Paschal Donohoe said that it had been high time for the country to act on the legislation that hasn’t been changed in 13 years .
However, there have been quite a few points that merited further explanation, but Donohoe simply didn’t care to elaborate enough on. There was a contentious point whereby bookmakers weren’t bound by any specific rules on whether they should bear taxes themselves or pass them on to gamers.
The Hopes that Government Will See Reason
Now, it is the Irish Bookmakers Association (IBA) that is trying to reason with the government. The bulk of the country’s 850-odd betting shops are members of IBA. They have tried to convince the government that enacting such measures would make the industry so unsustainable as to immediately lead to a 35% shut-down of existing operators’ properties.
According to IBA representative Sharon Byrne, each closed property would take down at least five jobs. So, in no time, the government may have 1,000 people out of a job on little more than a whim.
Byrne even ventured further, quoted by the Irish Examiner, of predicting the very end of the entire gambling industry for the country if such measures are not alleviated by actual laws that safeguard the interest of both gamers and the business that operates there. The Irish Examiner had gone even further to comment on Ireland’s commitment to boosting taxes for all businesses.
Ireland is hardly the only place in the region where sports betting and gambling in particular are in the crosshair of regulators. GVC has been calling for a specific ban on gambling ads through its Chief Executive Kenny Alexander.
Meanwhile, the number of overall gamers and punters in the United Kingdom has continued to fall, the newly-introduced reams of restrictive legislation are definitely not welcome by anyone involved.
Ireland’s woes are just an example of how politicians would hurry up to regulate betting and gambling ham-fistedly in a bid to score points with their constituencies.