Ireland mulls shifting betting tax burden from operator to punter


irish-betting-tax-reviewIreland is mulling changes to its gambling tax regime that could shift some of the burden from operators to punters.

Last Friday, Ireland’s Department of Finance announced that it had launched a review of the mid-2015 imposition of new taxes on online bookmakers and exchange betting operators. The review is part of the government’s broader Tax Strategy Group process.

Ireland shook up its gambling industry in 2015 via the long-delayed passage of the Betting (Amendment) Bill, which required all Irish-facing online betting operators to hold a local license. The changes also required online betting operators to pay a 1% tax on turnover derived from Irish punters, while betting exchanges pay 15% of their Irish commissions.

The Department says it’s seeking to determine the effects the tax change has had on exchequer revenues as well as the bookmaking industry. To help arrive at an informed conclusion, the Department is seeking stakeholder input on a few specific areas.

These areas include whether the turnover tax model, and the different approach to betting exchanges, is “the most appropriate for the industry at this time.” The Department also seeks input on “an appropriate level of betting tax” for both traditional bookmakers and exchanges.

Perhaps tipping its hand as to its preferred strategy for going forward, the Department asked for input on the expected impact of a shift “from taxing the bookmaker to taxing the punter.” The Department suggests this shift could take one of two models: maintaining the 1% turnover tax but paid by the punter instead of the operator, or a higher tax on punter winnings.

Operators have been asked to submit their views by June 19.

Turnover taxes are rarely popular with operators but Ireland’s regime was at least more sensible than the insanely high turnover tax rates introduced in markets like Poland and Portugal. The comparatively low rate is reflected in the roughly 70 operators who applied for Irish online betting licenses, while Poland and Portugal are struggling to attract much interest beyond domestic land-based operators who end up with de facto online monopolies.