Levy threat to jobs, warns bookie
PADDY Power boss Patrick Kennedy has labelled the Government's plan to tax internet and telephone betting to raise additional funds for Horse Racing Ireland as a "charade" and has again warned that jobs could be lost here if the levy is introduced.
Mr Kennedy was speaking yesterday at the company's annual general meeting in Dublin, where he responded to the announcement last week by Taoiseach Brian Cowen that the Government is to advance legislation to ensure internet and telephone gambling will be taxed. Firms wanting to offer internet and telephone betting here are also likely to have to apply for a licence.
It is thought a 1pc levy on turnover is the most likely option. That would erase about €2.5m annually from Paddy Power's operating profit.
Sabre-rattling in advance of the legislation being drawn up, he warned that while he hoped Paddy Power would be able to create 350 jobs at its Tallaght base in Dublin over the next three years, he was uncertain as to the potential for those jobs if the tax was introduced but not applied to all operators.
"There's a risk that these jobs will have to be diverted from Ireland," said Mr Kennedy.
The Department of Finance has been considering the imposition of the tax for a number of months.
Mr Kennedy pointed out that Horse Racing Ireland, which was established by the Government in 2001 and funded by the exchequer, had received €540m in grants over the past decade and claimed that virtually all the money had been used for prize money at race meetings.
"It looks like prize money for wealthy horse owners is more important to the Government than jobs in Tallaght," Mr Kennedy said. He maintained that just about 11pc of Paddy Power's betting turnover was generated on the back of Irish horseracing.
Shares in Paddy Power were unchanged yesterday at €26 even as it reported that revenue performance since the beginning of the calendar year had significantly improved.
Excluding its Sportsbet operation in Australia, the amounts staked by Paddy Power customers online rose 19pc in value terms and by 39pc in volume.
However, at its Irish retail outlets, the amounts staked have fallen 2pc, while bet volumes are up 5pc year-on-year. The company has also been winning more business from punters after a strong set of bets went against it last year.