Ireland eyes gambling tax increase to offset hospitality VAT cut

Ireland’s coalition government is reportedly weighing an increase in gambling taxes as a means to support the hospitality sector while maintaining overall budgetary balance. The potential move comes as authorities aim to reduce VAT on hospitality services to cushion the sector from the impact of an impending minimum wage hike.

According to sources cited by The Sunday Times, policymakers are considering raising the current 2% betting duty to help bridge the revenue shortfall expected from the VAT cut. The proposed tax shift would align with a wider review of gambling taxation and follows a growing trend of governments treating gambling revenues as a potential source of public funding.

The review is taking place amid the transformation of Ireland’s gambling regulation sector. In 2024, the Oireachtas (the bicameral parliament of Ireland) passed the long-anticipated Gambling Regulation Bill of Ireland (GRBI), which replaced laws dating back to the early 20th century.

While the GRBI did not include direct fiscal measures, government ministers emphasized during debates that the new legislative platform would support future reforms in gambling taxation.

As part of the GRBI framework, the newly established Gambling Regulatory Authority of Ireland (GRAI) has been tasked with developing a “Social Impact Levy” on gambling revenues. This levy is intended to fund national programs focused on gambling harm prevention, addiction treatment, and support services.

Although the specific rate of any revised betting duty remains undecided, the ongoing discussions appear to mirror developments in the United Kingdom, where gambling tax policy is also under scrutiny.

The Labour government in the UK is facing increased pressure to generate new public revenues for infrastructure spending and social welfare measures. Former Prime Minister Gordon Brown has called for higher betting duties to finance the removal of the two-child limit on child benefits and to support anti-poverty initiatives.

Despite differences in policy motivation, the two countries share significant regulatory and commercial overlaps in the gambling space. The Irish and British gambling sectors are both seen as lucrative and growing. In Ireland, the overall gambling market is projected to reach €1.24 billion ($1.45 billion) by the end of 2025, with the online segment alone expected to grow by 2% annually to €1.35 billion ($1.58 billion) by 2029, according to data cited by IrishCentral.

In the UK, figures from the UK Gambling Commission show that online gross gambling yield rose by 2% year-on-year to £1.49 billion ($2 billion) for the second quarter of 2025. While retail gambling experienced a decline during the same period, the total sector value remains high.

These markets are particularly important for major international operators such as Flutter Entertainment, which has roots in Ireland through Paddy Power and has expanded significantly in the UK through its mergers with Betfair and Sky Bet.

In Q2 2025, Flutter’s UK and Ireland segment posted revenue of US$936 million, up 1% from the previous year. Other major firms with sizable exposure include Entain and Evoke.

While Ireland’s regulatory overhaul proceeded more swiftly than the UK’s lengthy review of the 2005 Gambling Act, similarities between the two nations are becoming more evident. Both have established independent regulatory bodies, GRAI in Ireland and the Gambling Commission in the UK, with comparable oversight responsibilities. 

Each country has also signaled a shared interest in strengthening player protection measures and holding gambling operators more accountable for harm mitigation.

Should Ireland move ahead with a betting duty increase, the industry is expected to resist, echoing the opposition seen in the UK. In Britain, tax-related pressures have already prompted unrest in the racing sector, which is planning industrial action later this month.