Is an Irish gambling tax hike on the cards?

The Irish gambling industry in general is closely watching moves by the cash-strapped government that could see gambling tax doubled during the budget presentation this week.
The Irish Times reports that the troubled Irish horseracing sector is hoping that Minister for Finance Brian Lenihan will provide more support through an increase in betting tax to 2 percent, and that the government will bring telephone and off-shore internet betting into the tax net.  The latter is a course fraught with peril, with major internet gaming companies warning that they may be required to develop new business strategies in order to remain competitive, at the cost of jobs and tax revenues.
“Clearly it is a huge Budget for the country and major issues have to be addressed,” Horse Racing Ireland chief executive Brian Kavanagh said yesterday. “But from racing’s perspective it is important that all forms of betting are brought into the tax net, and then there is the question of the tax rate itself.”
The Irish Times reports that from a high of Euro 76 million, the Horse and Greyhound Fund finances have dropped to Euro 59 million this year, with betting tax bringing in only Euro 31 million. That meant Euro 28 million being added to the fund directly by the Exchequer.
A report by UCD economist Colm McCarthy, commissioned by organisations representing the racing and breeding industries, was presented to government last month in which McCarthy recommended a doubling of the betting tax rate to two percent.
Some off-course betting organisations have indicated they could go along with that but only if the tax is applied across the board to telephone and betting exchange turnover. Others, however, have warned of serious job losses on the back of such a move.
McCarthy’s report indicated such a move could generate up to Euro 70 million in revenue, which would mean a substantial, and in the current climate rare, increase in funding for a semi-state organisation like HRI.
An increase in betting tax was proposed in last year’s Finance Act but was held over until the issue of taxing offshore betting was addressed.
The racing industry supports an estimated 14,000 jobs in Ireland, receiving revenue from betting tax.

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