BUSINESS

Ireland to apply 1% turnover tax to online gambling operators

TAGs: Boylesports, Ireland, Paddy Power, tax

ireland-turnover-tax-online-operatorsMaking good on plans he first voiced before Christmas, Ireland’s Minister for Finance Brian Lenihan has extended the current 1% levy on betting turnover paid by Irish land-based bookmakers to their online counterparts, such as Paddy Power and Boylesports. Betting exchanges like Betfair will face a “betting intermediary duty” based on 15% of the commission they take from Irish bettors. The changes, revealed when the Government published the Finance Bill on Friday, are expected to put an extra €20m per year into the state’s pot o’ gold. Parliament is expected to pass the Finance Bill ahead of the country’s General Election on March 11.

Irish bookmakers have been quick to express their disapproval of Linehan’s announcement. Boylesports’ marketing head Mark Nunan told the Irish Times that it was more than “a little strange” that the government was increasing the online books’ tax burden at a time when it was “offering incredibly generous tax incentives to foreign companies to base themselves [in Ireland].”

Paddy Power also gave Linehan’s gambit the thumbs down, saying that the tax will penalize Irish-based companies, giving their internationally based competitors an unfair advantage. While the Irish government has publicly mused about the idea of a licensing system to level the playing field, Paddy’s head of communications thinks “it’s hard to see how they will [enforce this] … no government in the world has been able to nail the collection issue yet.”

Whether Ireland manages to ‘nail’ its gambling issues is something only time will tell. Clearly, there are pitfalls o’ plenty in how a government chooses to manage its online gaming sector. One only has to look to France, where the only voices not complaining about the country’s new gaming regime belong to the former state monopolies. The UK is expected to announce changes to its Gambling Act in March, reportedly focused on compelling so-called White List operators to apply for direct licenses from the Gambling Commission. Will the UK get it right, or will they follow their Gallic cousins down the regulatory drain? Watch this space…

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com