Irish bookmakers warn of exodus if gambling tax is doubled

Irish bookmakers have warned of shop closures and an operator exodus if the country’s gambling tax is doubled as proposed next week.

The Irish government is expected to increase the turnover tax to 2% as part of its 2019 budget next Tuesday, hoping to raise as much as €50m for state funds, according to reports in the Irish Examiner newspaper.

Measures to increase the tax rate, including it in the 2019 budget, were called for by the Independent Alliance, a group of Irish MPs comprising Shane Ross, Finian McGrath, Kevin Boxer Moran, and John Halligan who are hoping to use the €50m raised to jumpstart problem gambling initiatives in Ireland.

Alan Heuston, partner and Head of the Betting & Gaming Group at Irish law firm McCann Fitzgerald said any prospective increase “needs to be considered as part of an overhaul of the current outdated regulatory regime which exists in Ireland for betting and gaming” adding that any changes need “to strike an appropriate balance between encouraging commercial and responsible gambling operators and protecting consumer and vulnerable gamblers.”

However, Sharon Bryne, chair of the Irish Bookmakers Association told EGR the estimated €50m revenue upsurge was an “absolute fantasy” adding that it would “simply be a tax on jobs in villages and towns all over the country, as an additional 1% tax on turnover will force almost all Independents out of business overnight, along with many of the smaller shops controlled by multiple operators.”

IBA estimates state that as many as 1,500 jobs could be lost, with the increase making 300 shops “unviable”.

Reflecting on the impact this tax rise might have on the online sector, Bryne added: “A doubling of the turnover tax would have huge repercussions for operators, as they trade off a much lower margin online due to the nature of the betting activity particularly the extent of in-play betting.

“I would predict that this change would force some of them to consider withdrawing their services in Ireland.”

Joe Kelly, Partner at Irish gaming law firm A&L Goodbody told EGR a tax on turnover is widely seen by Irish operators as “unfair”, adding that a tax on GGR is “a much fairer method of taxation”.

Kelly added: “Switching to a GGR model of taxation would bring Ireland more in line with how other states tax the sector in the EU but I have not seen any report that this is going to happen.”

Horseracing Ireland, which was among the first to call for such an increase, calling for a revised 2.5% tax rate to be levied on all gambling in 2017, declined to comment when approached by EGR.