Paddy Power warns on doubling of betting tax
PADDY Power chief executive Patrick Kennedy has again lashed out against the Government's plans to double betting tax to 2pc, and warned that hiking the levy could stymie job creation in the industry.
Speaking at the group's annual general meeting in Dublin yesterday, Mr Kennedy claimed that the tax, which is used to fund prizemoney for horse and greyhound racing, would undermine last week's jobs initiative.
The previous government extended the current 1pc tax rate to online betting at the last Budget. "Almost 90pc of the bets we take online and on the telephone have nothing to do with Irish racing," said Mr Kennedy. "It's akin to levying Google to fund the Dublin Airport Authority because they use Dublin Airport on a frequent basis."
Earlier this year, Horse Racing Ireland chief executive Brian Kavanagh told the Oireachtas Agriculture Committee that the future of the sector was at risk, as the Horse and Greyhound Racing Fund had been reduced to €57m this year from €76m in 2008. He said in January that the next government would "have to go after" online betting to raise additional funds.
Speaking after the AGM, Mr Kennedy said he had no problem with the current 1pc tax, but that there were issues of enforcement.
"Eight of the top 10 internet operators marketing their services in Ireland are not based in Ireland. They're in Malta, Gibraltar, Vanuatu, Jersey and our issue is that overseas operators simply won't pay," claimed Mr Kennedy, who said Paddy Power was happy to pay whatever tax is levied, as long as it's done so on the basis of a "level playing field".
His comments came as Paddy Power reported "strong momentum" since the beginning of the year, with group revenue up 21pc and online revenue up 33pc. Retail revenue was 7pc higher.
At its Irish retail operations, the amounts staked by punters on a like-for-like basis were down 1pc in the period from early January to mid-May, while the gross like-for-like win for Paddy Power was 10pc lower. He said the retail business in Ireland remains under pressure.
Mr Kennedy said that this year's Cheltenham festival had been a disaster for bookies, as punters cashed in on successful betting, while its operation in Australia suffered from an unfavourable run of results in the Australian Football League.
In the UK, where Paddy Power has 130 outlets, the amounts staked in outlets rose 6pc while the total gross win was up 9pc.
He added that betting on last weekend's Eurovision song contest had been substantially ahead of previous years and, had Jedward won, it would have cost Paddy Power €1m.