n his most recent budget speech last month, Minister for Finance Brian Lenihan stated that he intends to double the tax on land-based licensed bookmakers to 2 % on turnover from the first of the year. However, online and telephone services, which now accounts for the bulk of the industry in Ireland, will remain tax-free.
Previous attempts by the Irish Government to tax the online betting industry have failed as bookmakers moved their operations to tax havens such as Gibraltar, from where many continue to operate. According to a piece from The Independent newspaper, the problem for the Department of Finance is that bets made online or over the telephone are often routed through other jurisdictions.
However, the Government stated that it is still looking into some type of tax on online takings due to the rapid growth of the sector. Despite a downturn in profits from land-based betting shops over recent years in Ireland, online gaming has remained a growth area for bookmakers with operators such as Paddy Power reporting constant growth.
In other budgetary news, Reuters has reported that land-based bookmakers could also be facing the prospect of tax hikes in the UK as Chancellor Alistair Darling follows Ireland’s lead in order to generate much-needed revenue.
The news agency stated that Darling may specifically target gambling machines, which have propped up bookmakers’ profits in recent years, for increased levies in his pre-budget report due out later today after it emerged that these had been the subject of an investigation by the Gambling Commission watchdog over concerns that they may be addictive.