The Luck of the Irish? Taxes May Shift from Operator to Punter in Ireland

Published May 30, 2017 by Brett C

The Luck of the Irish? Taxes May Shift from Operator to Punter in Ireland

The gambling tax regime in Ireland may soon change, shifting the burden from operators to bettors. The Ireland Department of Finance has launched a review on taxes on bookmakers as part of a wider Tax Strategy Group process.

The Betting Amendment Bill passed in 2015 called for sweeping changes to the gambling industry. On Friday, 19 May 2017, the Department of Finance in Ireland announced a review of the 2015 taxes for exchange betting operators and online bookmakers. According to the 2015 bill, local licenses were required for all Irish online betting operations. Additionally, operators were required to pay a 1% turnover tax from proceeds of Irish bettors. Betting exchanges are required to pay a hefty 15% of Irish commissions. The bookmaking industry has complained about these steep taxes, and the Department of Finance is currently reviewing the matter.

Shifting the Tax Burden for Greater Equity

Stakeholder input is being sought in key areas of Irish betting. Considerations are being made about different approaches to betting exchanges and the viability of the turnover tax model. More importantly the Ireland Department of Finance is seeking the most appropriate betting tax for Irish online bookmakers. To better serve the interests of the industry in a more equitable fashion, the Department has considered a shifting of the tax burden from the bookmaker to the punter. This could take 1 of 2 possible directions. Punters could pay a higher tax on their winnings, or the 1% turnover tax would be maintained but it would not be paid by the operator, rather by the punter.

Stakeholders have Until June 19 to Submit Proposals

The due date for submissions is Monday, June 19, 2017. History has shown that turnover taxes are unpopular with bookmakers and betting exchanges. However, the tax regime in Ireland is preferred over other countries such as Portugal or Poland were exceptionally high turnover tax rates are enforced. Approximately 70 bookmakers and betting exchanges applied for licensing in Ireland, indicating the favourable tax climate that currently exists in the country. In other European countries, it is increasingly difficult to attract outside operators, which gives rise to monopolies with just a handful of operators.

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