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European tax laws blamed for demise of casinos

EUROPEAN tax laws are crippling Ireland's gambling business, according to an industry trade journal.

The London-based Gambling Compliance (GC) has pointed to changes in how governments can impose VAT as contributing to the demise of several casinos in the Ireland.

Casinos are banned under Irish law, but for years they have been able to operate as private clubs. However, a ruling by the European Court of Justice in June now means that transactions in private clubs are subject to VAT, which can cripple the smaller firms.

The ruling noted that while member states were obliged to be consistent in applying taxes to competing services, governments were afforded "wide discretion" in deciding which forms of gambling could be exempted from VAT.

According to GC, that ruling, combined with the fall off in trade that has come with the recession, will inevitably lead to the demise of more casinos.

In Dublin, the landmark Silks club was wound up yesterday after seven years, while the Dermot Desmond-backed Sporting Emporium is thought to have racked up losses of €4m since opening in 2005. Colossus Card Club revealed losses of €1m over the course of 2009 in its most recent accounts.

David Hickson, director of the FitzWilliam Card Club in Dublin, said that clubs were receiving VAT assessments going back up to five years, which could effectively put them out of business.

"If the Revenue demand 21.5pc of gross win from [small] clubs. . . for the last five years, many operators will have to just shut up shop."

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