Ireland gambling industry review could see punters taxed

Ireland’s gambling industry may face new reforms including a move which will tax punters.

Following the increasing number of reports revealing the lack of regulation surrounding Irish betting operators, Ireland’s Department of Finance announced it is reviewing its betting tax rules.

Last Friday the country’s finance ministry announced it was reviewing the Betting (Amendment) Act 2015 under the government’s Tax Strategy Group procedure.

The amendments made to the Betting Act 1931 imposed in mid-2015 requires all betting operators based in Ireland to hold a local license. The licensed online betting operators have to pay a one percent tax on all revenue from Irish gamblers while betting exchanges are required to pay 15 percent.

The Department wants to review the impacts the amendments have had on the industry and have asked operators to submit their views by June 19.

The areas of concern include whether “the existing model of turnover tax, with different approach to betting exchanges, [is] the most appropriate for the industry at this time”.

The Department also wants an opinion on the “appropriate level of betting tax and the equivalent tax on betting exchanges commissions”.

But the most interesting area of concern is the suggestion “of a move from taxing the bookmaker to taxing the punter”. The Department recommends doing this by taxing the punter a percentage of all bets placed instead of the operator, or by placing a higher tax rate on the punter’s winnings.

Ireland’s current tax system is unpopular in other parts of the world, including Poland and Portugal, but this is due to the higher turnover tax rates. Poland has a 12 percent tax rate, while Portugal has an eight to 16 percent tax rate on betting operators meaning many international operators aren’t interested in obtaining a local license in these countries.

Ireland has not had a problem with its turnover tax rate and drawing in operators, with around 70 operators applying for an Irish license since the laws were amended.

What the country is struggling with is the lack of a gambling regulator. While betting operators need the local license, there is no regulator to check up on the operators and ensure the appropriate player protection policies are in place.

While bookmakers are meant to report any unusual behaviour under the EU anti-money laundering laws, there is no authority in Ireland to ensure this occurs, deeming the system inadequate.

Whether the Department is considering forming a regulator is not clear.