The Irish Bookmakers’ Association (IBA) has submitted their recommendations to the government review of local betting taxes, as part of the plan to update the gambling laws in the country.
The review is part of the Tax Strategy Group process to initiate change in the betting tax regime from 2015. Experts argue that this regime is likely to increase the betting duty rates on the Irish bookmaking industry.
The IBA has urged the government to create a betting tax regime that is fair to local bookmakers, while remaining competitive for international companies. They have particularly slammed a plan to increase betting tax in the country, arguing it would lead to the closure of local shops.
The horse racing industry suggested to Minister for Finance, Paschal Donohoe, to double the betting tax from one to two percent, potentially increasing the tax from €50 million to €100 million. However, the chairman of the IBA, Sharon Byrne, argued that this would result in the closure of betting retail outlets and job losses.
According to Ms Byrne, there are 851 betting shops in the Republic and many of these would not be able to handle the proposal, which would apply to turnover, not profit. She explained that a betting shop with turnover of €2 million only produces profits of €9,000 to €9,500 after paying taxes and expenses, but that a 2 percent betting tax on turnover would be €20,000.
Even without this proposal, the Irish retail bookmaking industry has experienced significant decline in the past ten years with 3 shops closing in the last month and 450 closing over the last decade.
The recommendation from the IBA was to reduce the betting tax from 1 percent to 0.25 percent for shops that generate less than €2 million in annual revenue.