The final review of the bookmaker’s turnover tax is expected soon, effectively it could mean double tax. Bookmakers would be obliged to pay from one up to two percent. Concerns voiced by multiple industry stakeholders include the damaging effect an increase in tax would have on the gambling industry. The main concern is how this tax hike could affect the independent Irish bookmaking sector.
Legislative Changes Proposed During 2019 Budget Speech
Paschal Donohoe, the Finance Minister of Ireland proposed the new legislation during his 2019 budget speech. He stated that the aim of the Government is to level the playing field in the area of betting by extending the tax to remote betting exchanges and bookmakers. The Irish Bookmakers Association had requested a tax review, numerous times. Donohoe promised to reassess the industry impact at the end of the first financial quarter of 2019. Still, many bookmakers believe that the tax review will not take place in the near future.
Detrimental Impact of Tax Proposal
Bruce Betting’s Managing Director, Thomas Byrne discussed the impact of the new tax and feels it could have a significant effect on the bookmaking scene in Ireland. He also commented that the proposed tax increase of 100% to Irish bookmakers effected from the 1st of January has resulted in ten shops closing. At the same time, he shared that he remains aware that Irish firms keep an eye on whether government honour their promises. This time it is reviewing the tax situation within the first quarter of the year. What determines whether more shops close, will be the outcome of tax on profits instead of a tax on bookmaker’s turnover.
Betting Shops Closing – Job Opportunities Lost
Doubling the tax would hit independent bookmakers hard and they form a noteworthy portion of the betting market in Ireland. The increased tax will affect all the remaining shops and put several into a nonviable position. What is most frustrating to the bookmakers is that as the government takes this stand the consequences are that many betting shops will close. At the same time, every closure means five to six individuals will lose their jobs.
Smaller Bookmakers Faces Tough Competing with Massive Firms
The smaller independent bookmakers are not only competing with the large bookmaking firms but are also struggling to survive. This survival will become even more challenging due to an increase in tax. There is not much that can be done to offset the tax increase, according to Byrne. Especially since the market remains extremely competitive in Ireland. It is therefore extremely difficult to cut back on any prices or specials.
Larger Profitable Online Bookmakers Set the Pace
Larger bookmaking companies owning profitable online websites set the pace. This leaves retail betting establishments fighting to uphold a share in the market. Most of the bookmakers are hopeful that the review by the government will lead to amending the tax to a workable tax level.