Although internet betting in Ireland contributes significantly to the total industry revenues, but its contribution to the government’s tax revenues has not matched it.
At least that is the assessment of the Irish government, which has been promising to change Irish gambling laws in order to extend an existing 1% tax levied on high street betting shops to the online world.
One of the reasons for doing so is to finance Horse Racing Ireland and the Greyhound Board, the two government bodies that oversee these sports in the country. Although relying on betting tax for part of their funding, the shift from offline to online betting has meant decreasing revenues for the two organizations.
In order to remedy the situation, the government has been considering extending the 1% levy to online sports betting, though not all of the expected EUR 17 million tax money would go automatically to the two bodies.
Having the plan approved by the government is only the first step, as the EU Commission must also check to see whether it is in line with European rules prohibiting certain government subsidies and the creation of unfair competition.
It is precisely that unfair competition that licensed domestic bookmakers, such as Boylesports and Paddy Power are worried about, fearing that the government will be powerless to make foreign online operators pay.
Commenting on the plan, Boylesports Head of Finance, Michael Bent said that “in the event of there not being a level playing field, the only ones that will be penalised will be Irish companies.”
The biggest foreign operator is UK-based Ladbrokes, which has already indicated that it would pay the tax once it becomes law.
The Betting Amendment Bill is not expected to be voted into law until much later this year, or even early next year.