Should Ireland’s finance minister manage to pass the new online betting tax, the country would receive an annual inflow of EUR 25 million.
Three years ago Michael Noonan became the minister of finance and since then he has tried to introduce a new bill which would affect online gambling operators. Despite protestations from the gaming industry, both the minister and other officials believe that it would serve a great deal of good for the country as they would get an inflow of around EUR 25 million a year.
The main focus of the levy would deal with online transactions that target foreign-based sportsbooks that extend their services to Irish residents. Taking into consideration how big the gaming industry is in the country and how positive the future prospects are, the government is set to receive massive benefits for a number of years, should the bill be passed.
Online gambling a big industry in Ireland
• Michael Noonan has been trying to introduce the tax for three years
• Online gambling in Ireland generates EUR 1.6 billion per year
• Almost half the money from the tax will count towards capital, horse and greyhound racing
Gambling news reports that Ireland generates somewhere around the EUR 1.6 billion mark every year from its online gaming industry. This figure is absolutely staggering, however the problem with this is that most of the money is not kept within the country, but is transferred to overseas business that just facilitate their gambling services to Irish customers.
These companies that are located offshore enjoy great advantages in the form of lenient tax policies and other profitable pursuits. This can be somewhat likened to the “double Irish arrangement” system that many American multinational corporations use to their benefit, as it allows them to avoid paying large tax figures and keep a great deal of money for themselves.
It is expected that up to EUR 11 million of the money that will generated from the tax levy will be directed towards improving some relevant areas. A portion of the funds will go to capital and other investments that concern Ireland’s horse and greyhound racing businesses.
Since Noonan took the chair of the minister of finance, he has strongly pushed for the implementation of the tax bill. It has been a long three years but now the Betting (Amendment) Bill 2013 is almost ready to be introduced. Once the law gets in effect, a number of changes are expected to occur in the industry.
Under the law, online sportsbooks in Ireland will have to obtain a license to offer their services to Irish punters, regardless of the fact whether they are physically located in the country or not. Additionally, the providers will also have to pay tax on betting transactions that take place with Irish gamblers.
Money from the tax will go to horse racing investments
The money that is raised with the new tax will benefit not only the government but will also be distributed back into the racing business. The finance minister highlighted how some of the money from the tax will be ring-fenced and contribute towards helping the Irish bloodstock industry.
“In recognition of the importance of the Irish bloodstock industry to the rural economy and the anticipated yield of €25m per annum from betting duty, the Government will be providing an additional €6m a year for three years to the fund for horse and greyhound racing.”
Noonan also added that lawmakers have decided to make and additional EUR 5 million available for Horse Racing Ireland next year in order to help out the race courses. “The Government is also allocating additional capital of €5m to Horse Racing Ireland in 2015 to leverage investment in race courses.”
The tax bill will offer a regulatory system for mobile betting sites that are located overseas as well as gambling intermediaries that more often referred to as betting exchanges. They provide their gaming services to Irish punters despite being located outside the country. Essentially, the bill will help create a fair and equal gaming environment in Ireland.
Paddy Power’s spokesman expressed joy for the tax bill, believing it will ensure equal opportunities for all providers. “We have worked closely with the authorities in Ireland on the Betting (Amendment) Bill — ensuring that there is a level playing pitch for all companies who operate in the Irish marketplace irrespective of whether they are based in Ireland or not.”