Irish gambling tax hike set for immediate review

Ireland’s government has committed to an immediate review of its gambling tax hike in a move that could lead to its repeal next year.

Legislation doubling gambling tax from 1% to 2% of turnover was last night passed by the Dáil and is expected to proceed through the Upper House of the Irish legislature shortly, thereby bringing the measure into effect from January 1.

However, in a dramatic 11th-hour concession to the gambling industry, Finance Minister Paschal Donohoe ordered a report on the tax rise’s impact to be presented to the Finance Committee by the end of the first quarter of 2019. The industry has warned that the increase will be massively damaging to the sector, with recent report commissioned by the Irish Bookmakers Association (IBA) claiming that the tax rise will lead to 400 betting shops closing and 1,500 job losses.

In a debate in the Dáil, Donohoe said that a tax on gross profits – proposed by Independent Member of the Dáil Éireann Michael Healy-Rae and backed by the IBA – could be considered as a means of raising tax take while not decimating the nation’s retail gambling industry. 

Speaking to iGamingBusiness.com, a Department of Finance spokesperson said the door remained open to changes beyond January 1.

“Minister Donohoe will continue to engage with the industry with the potential to look at the issue in the context of Budget 2020,” the spokesperson said.

Healy-Rae’s amendment backed the IBA’s alternative proposal for a 10% tax on gross profits for shops, and a 20% rate for online operators. The IBA believes this change would raise the industry’s tax contribution by €25m while allowing businesses of all sizes to remain viable.

IBA chair Sharon Byrne told iGamingBusiness.com today: “We are grateful the government have committed to doing a review early in 2019. This is critical as it will prove how a 100% increase is simply a tax on jobs and unsustainable. It cannot happen quick enough.”

The government believes it can raise €50m through the rise in turnover tax, but this has been branded a “fantasy” by the assocaition, due to projected shop closures. The government plans to use the tax hike to increase funding for problem gambling treatment and the racing industry.

Image: CraftyCaedus