The Irish government is set to enjoy a €25 million boost to its budget once a new online betting tax is fully introduced.
Michael Noonan has been lobbying for the introduction of the new tax since he became Ireland’s Minister of Finance in 2011. Indeed, one of his first finance acts was to provide a new licensing regime and an extension of the current betting tax to online gambling. Three years on, the online element is about to come into force.
According to the Irish Examiner newspaper, Irish punters gamble to the tune of €1.6 billion every year, but a large percentage of the profits generated from Irish gamblers finds its way overseas to companies based in countries such as Gibraltar where they enjoy much lower taxes than they would if they were based in the Emerald Isle.
Much like newly passed Gambling (Licensing and Advertising) Act in the UK, this new tax is aimed at offshore betting and gambling companies that offer their services to Ireland’s residents. Under the terms of the new bill, the Betting (Amendment) Bill, remote companies will have apply for a licence to operate in Ireland and then pay tax to the Irish government based on profits generated from Irish gamblers – a so-called point of consumption tax.
It is a move that Irish gambling giant Paddy Power, who have remained based in Ireland despite facing a major taxation disadvantage compared to its rivals, has welcomed.
“We have worked closely with the authorities in Ireland on the Betting (Amendment) Bill — ensuring that there is a level playing pitch for all companies who operate in the Irish marketplace irrespective of whether they are based in Ireland or not.”
Up to €11 million of the taxes raises are to be set aside to improve Ireland’s horse and greyhound racing industry.
Speaking to the Dáil, Noonan said: “In recognition of the importance of the Irish bloodstock industry to the rural economy and the anticipated yield of €25m per annum from betting duty, the Government will be providing an additional €6m a year for three years to the fund for horse and greyhound racing. The Government is also allocating additional capital of €5m to Horse Racing Ireland in 2015 to leverage investment in race courses.”