Sunday 15 September 2019

Proposal to tax bookie profits instead of sales

Bookies are lobbying hard for change to 2pc betting tax plan, writes Samantha McCaughren

Sharon Byrne of the Irish Bookmakers Association
Sharon Byrne of the Irish Bookmakers Association

Several TDs are supporting an alternative plan to the doubling of betting tax from 1pc to 2pc as announced by Finance Minister Paschal Donohoe in Budget 2019. Under an alternative plan, the betting tax would be levied on gross profits rather than turnover.

The bookmaking industry is lobbying hard for a change to the increase in betting tax as outlined by Donohoe, claiming it would result in the loss of more than 3,200 jobs.

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An amendment to the Finance Bill proposed by Independent TD Michael Healy-Rae would see shops paying a 10pc tax on profits while online operators would be subject to a 20pc rate. It is claimed this would deliver €25m for the Exchequer. A number of TDs are expected to support this amendment, taking the view it will protect jobs.

Gross profit tax is the way on which betting is taxed in most other jurisdictions, including the UK, where the level is set at 15pc.

Fianna Fail has also submitted an amendment requesting an economic analysis be carried out on the impact on the independent sector within months of the bill being passed, while Sinn Fein has also raised an amendment to the current proposal.

There had been calls prior to the Budget to raise betting tax in order to fund gambling addiction support. Independent Alliance Minister John Halligan said ahead of the Budget: "Every day of the week, you speak to individuals or organisations dealing with addictive gambling. They will tell you it is destroying the lives of thousands of people and families. With 1pc, what they are paying in Ireland is one of the lowest in Europe. And we are asking for 1pc more."

However, Sharon Byrne, chairwoman of the Irish Bookmakers Association, said it is not about how much tax is raised but about how it is levied.

"A 10pc/20pc gross profit tax model is fully costed, is progressive, has full industry support, is politically supported, is legally sound and will return over €25m additional revenue to the exchequer and will save 3,264 jobs at the same time."

Last week UK betting group Ladbrokes said it was likely to terminate all its on-course bookmaking activity in Ireland after the betting tax was doubled to 2pc in the latest Budget.

The betting firm also sponsors some races at certain fixtures at those racecourses. However, Ladbrokes Ireland director Jackie Murphy said the race sponsorship at locations where it exits the on-course betting shops will also cease.

Meanwhile, Irish firm Boylesports has claimed that 50 of its shops would no longer be viable with the new tax rate.

A recent report by Davy Stockbroker said: "Ireland is arguably now among the more penal regulatory environments for gaming in the world."

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