Irish budget changes to impact overseas betting companies

Some important changes were announced in the Irish budget last week that will have a significant impact on overseas betting companies.

The Irish Minister for Finance announced in his budget speech that the Irish Government intends to impose a tax on all bookmakers taking bets from Irish customers. It is as yet unclear as to whether the duty will apply only to bookmakers with an Irish physical presence, albeit that they may be licensed in Ireland or offshore, or whether it will apply to all bookmakers irrespective of where they are based, provided they take bets online or by telephone from customers located in Ireland.

The Minister for Finance has confirmed that betting exchanges will also be subject to tax under these new arrangements, but that the calculation of the tax will differ from that applying to bookmakers.
 
According to Maire Conneely, senior associate partner at A&L Goodbody, it has long been argued by bookmakers with an Irish physical presence and licensed offshore, that this would put them at a disadvantage relative to their offshore competitors, and effectively amount to a tax on Irish jobs. "If betting duty is to apply on this basis, bookmakers with an Irish physical presence are likely to consider moving part or all of their operations offshore, with a resultant loss of Irish jobs," said Conneely.

"One would have thought that to effectively enforce such measures against bookmakers based outside of Ireland that it would be necessary to introduce a licensing system to allow such bookmakers to operate in the Irish market. The duty itself would probably then be collected by requiring all bookmakers taking bets from Irish punters, regardless of the method used to place the bet, to pay one per cent of the revenue collected from these bets to the Revenue Commissioners in Ireland," added Conneely.

This approach could potentially lead to a requirement for bookmakers based in offshore jurisdictions to register for tax in Ireland, or alternatively lead to offshore bookmakers refusing to accept bets which Ireland based punters seek to place.