Article Date: 20-July-2012
Heading: Mixed reaction as online betting levy moves closer
Bill Main Points
· The Bill proposes a 1% turnover levy for all remote betting
· Betting exchanges subject to a 15% tax on Gross Profit Turnover
· Betting shops will be allowed to open until 10pm
By Isabel Hurley
MIXED reaction greeted the Government’s publication of the Betting (Amendment) Bill 2012 on Thursday which laid down the legal framework for the proposed 1% betting levy on online and offshore bookmakers.
The proposed legislation will also make online betting exchanges, such as Betfair, subject to paying 15pc gross profit tax. It could be early 2013 before the legislation comes into force.
Finance Minister Michael Noonan said: “This Bill will bring into place a fair and equitable licensing and regulatory regime for all bookmakers and betting intermediaries. The fact that offshore bookmakers were not subject to the betting levy represented a competitive disadvantage to onshore firms and also narrowed the State’s yield from the levy.”
Chief Executive Officer of Horse Racing Ireland, Brian Kavanagh, told The Irish Field: “We welcome the publication of this Bill by the Government. It’s a very important mechanism to create funding for racing by taxing offshore and online betting as a key element of providing a proper funding base for Irish racing. We also welcome the greatly extended opening hours for the betting shops. We will be going through the details of the Bill and following its progress through the Dail and EU.”
Boylesports’ Sharon Byrne, chairperson of the Irish Bookmakers Association, which represents almost 750 of Ireland’s 1,080 betting shops said: “The betting exchanges are having a severe impact on betting shops so this legislation from Minister Noonan is very welcome as it allows shops to open all year round after 6pm which will definitely protect and create jobs. It allows betting shops compete with the mobile and remote competitors.
“We note that the legislation also gives customers protection that they didn’t have before with regard to not being paid out on a genuine bet. Under it, bookmaker licences can be refused if a bookmaker fails to pay out on a genuine bet.
“However, we believe that the turnover tax is the wrong type of tax to impose. It should be a gross profit tax in line with all other businesses that would attract big international companies to base themselves in Ireland, exporting their services from Ireland. This would definitely create jobs and attract inward investment and most importantly, it is applicable to all types of gambling as turnover tax cannot be applied to poker or casinos,” she told The Irish Field.
However, chairman of the Irish National Bookmakers Association, Brian Graham, described it as a “bad deal for Irish racing.” Yesterday he told The Irish Field: The Government is making a huge mistake here. Everyone should be treated the same but they are giving the betting exchanges a huge advantage over everyone else. We are going to have a migration in the business towards setting up betting exchanges. What’s to stop me opening a betting exchange and charging zero commission and Irish racing gets nothing? It’s ludicrous to have a two-tiered tax system, everyone in the business is going to migrate to the lower one, that’s what’s going to happen.
“I think this is a bad deal for Irish racing and it’s a bad decision for the Irish taxpayer. Where is the money going to come from to fund Irish racing and this moment in time, the Irish taxpayer does not have it to give.
“I’ve a good mind to apply for a Betting Exchange licence myself and I believe that everyone in this business will now want one as well – pay no VAT, no income tax, no turnover tax - a blind man can see the advantages of it. I think what’s being proposed here from Minister Noonan is a seriously bad deal, I really do. People like me are at a big disadvantage. When I’m taking bets at a course, I have to pay for a permit yet someone can lay bets on their phone right in front of me and nothing can be done about it. If I have to pay betting duty on a bet taken at a track, then all should have to pay. Betting exchanges are getting a free ride. I can’t see this being a successful way to fund Irish racing in its current form,” said Graham.
Paddy Power of Paddy Power Bookmakers commented: “We welcome the legislation and are keen to see it implemented. We welcome paying any tax as long as our competitors pay it too. Hopefully this will be policed robustly and we won’t be at a disadvantage being Irish. Hopefully it will attract foreign investors into Ireland to bring more jobs but we need to encourage homegrown operators to grow and create lots of jobs. We have created over 2,000 jobs in Ireland and 75 alone in the first two months of the year. We welcome the moves to protect the young and vulnerable. We have a rigorous system in place to verify our account holders are over the age of 18.”
Regional Manager of Betfair Ireland, Graham Ross, said: “Betfair will review the details of the Bill and continue to work with the relevant Government departments on the effective implement of the Bill. Betfair remains keen to be licensed and to contribute to the Irish economy in a fair and sustainable manner. It is a matter for Government to determine how best to use the proceeds of online betting tax.”
Welcoming the publication of the Bill, Kildare South T.D. Martin Heydon (FG) said: “The new legislation will allow for a level playing field across bookmakers operating in the Irish market whether high street or online.
“The existing betting tax regime brought in €27 million to the Exchequer in 2011 and is expected to raise €26 million this year. The extension of the duty to online operators could add as much as €14 million to that amount in a full year,” said Deputy Heydon.
To read the full text of the Betting (Amendment) Bill, go to www.finance.gov.ie
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