Recently it was announced in the news that Ireland has been seriously examining the possibility of making changes to its existing gambling tax law. These changes to gambling taxes would ultimately shift the tax load from the operators to the players.
The Department of Finance in Ireland announced last Friday that it launched a review of the imposition of new taxes on both online bettors and exchange betting operators that were introduced in the middle of 2015 with the Betting (Amendment) Act. This review is said to be part of the broader Tax Strategy Group process by the government, which aims to examine the effects that the tax change had on the bookmaking industry, as well as exchequer revenues.
Consequences of the Act
The Betting (Amendment) Act, which had been delayed for a long time, shook up the gambling industry when it was passed back in 2015. It required that all Irish online betting operator possess a local license. The Act also imposed that Irish gamblers would have to pay a 1% tax on all of their turnovers. On the other hand, betting exchanges were subject to a 15% tax on all of their Irish commissions.
The Department of Finance stated that it was asking for the input of stakeholders in a few particular areas, to examine the effect the taxes had on the entire industry, in order to come to a more informed conclusion. The areas where this input would be welcome are whether the turnover tax model and the various approaches to betting exchanges are in the best interest of the gambling industry at the present time. Also, the Department has asked for more input on what the appropriate level of a betting tax would be for both conventional bookmakers and exchanges.
The Department, in order to find the most appropriate strategy that would benefit all involved, also asked for advice on the following issues:
- What would be the expected impact if the burden of taxes went from the bookmaker to the player, or should the Department try to impose a higher tax percentage on winnings that are paid by the player;
- Should the remote sector be included into the betting regime under the Betting (Amendment) Act of 2015;
The Department has put a deadline for all submissions of suggestions, expiring on June 19th, 2017.
More Reasonable Approach
Operators have generally been fond of the turnover tax, but Ireland’s plan to ask for the industry’s input seemed a lot more sensible than what Poland and Portugal did when they introduced immensely high turnover tax rates to the markets. Ireland has a relatively low tax rate, which is due to the number of operators applying for Irish online betting licenses. On the other hand, Poland and Portugal have had troubles in attracting any interest beyond domestic land-based casinos, which ultimately end up having online monopolies.
The Irish gambling regulations and anti-betting laws have been in place since 1931 and are regarded as obsolete and don’t take into account the effects of modern gambling. Experts say that the laws need reformation and that new regulations are required as soon as possible to avoid illegal activities.