Irish online betting tax likely this year

With opposition members of parliament become increasingly critical of the delays in its implementation, it looks as if the Irish tax on online betting may at last be activated in 2014.

The Irish newspaper The Independent reports this week that the Betting (Amendment) Bill 2013 has continued to grind its way through the Dail with long debates in recent weeks, but that implementation is now in sight.

Giving a potted history of the drive to tax online gambling companies accessing the Irish punter, the Independent recalled that in the spring of 2009, then justice minister Dermot Ahern began a review of the nation’s outdated gambling legislation.

By 2011 a new Finance Minister, Michael Noonan, had announced a new licensing regime and an extension of the betting tax to online gambling, but for inexplicable reasons the measure did not see practical application .

Two years on, in July last year the political establishment finally had a piece of legislation before the Dail, which will ensure that companies taking bets online from Irish residents, no matter where the operator is situated, will be taxed. It’s the Irish version of the UK point-of-consumption licensing and taxation initiative.

At first, a tax rate of just 1 percent will be applied, a restrained use of the tax regime that major bookie companies like Paddy Power have applauded – perhaps because the company derives most of its group profits through the internet and mobile channels.

Other provisions in the regulation empower the minister to impose additional “social” levies, and make provision for restrictions on advertising and the use of bonus incentives.

Irish punters gamble about Euro 1.6 billion online a year, which suggests that the government’s delays in implementation could have lost it some Euro 48 million over the past three years.

Opposition MPs have seized on the delays to criticise government, with Fianna Fáil finance spokesman Michael McGrath castigating his opposite number for his unnecessary waste of an opportunity to boost government finances.

Responding to the criticism, government spokesmen claim that the bill had to first be submitted to the European Commission for its views, causing a mandatory three month hiatus.

McGrath has a rather more optimistic view of the size of the Irish market than most other estimates; he expects that gaming turnover will be around the Euro 4 billion mark.

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