January 25, 2010

Irish Labour Party pushes online gambling tax reform

Just days after the UK announced stricter regulation for offshore sports betting firms that cater to local punters, now Ireland is following suite – but this time, the issue is tax. Current levies in betting shops across Ireland sit at a standard 1%, a rate which also applies to internet bookies. Under the new reform, the tax on all sports betting operations, including online sportsbooks in Ireland, is to be raised to 1.5%.

This seemingly small increase is expected to generate revenues of around €90m for the Horse and Greyhound Racing Fund. This Fund has seen a 13% reduction in government funding since October 2008, and more cuts have been promised for 2010. This recent chain of budget cuts has already started to drive betting shops out of business across the country, with more than 100 closing in the last 12 months.

Taxing foreign-based internet bookmakers, it seems, is a way to get some money back into the Fund, without the Irish government having to dip into their own pockets (the government funds half of the greyhound industry in Ireland already).

The Irish Bookmakers Association, on the other hand, believes that the 1.5% levy will only have a negative effect on local betting shops, and could lead to further closures and job losses.

Regardless, Labour is serious about the changes. Spokesperson Mary Upton states, “Online operators who are not based in Ireland but who are providing a service to Irish customers and who refuse to register and pay the betting levy will be blocked by Irish internet service providers, upon the direction of the Government.”

Upton was quick to point out that the new levy does not affect online casinos in Ireland. Foreign companies offering online gambling services in Ireland will pay the levy on sports bets only, not on other forms of internet gambling.

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