OFFICIALS from the Department of Finance advised Minister Paschal Donohoe to double betting tax in the most recent Budget due to concerns over problem gambling and not because the racing industry deserved more funding.

According to a report in the Irish Examiner, Finance Minister Paschal Donohoe was told the “opportune time” had arrived to double betting tax amid ongoing pressure to increase tax on gambling.

Mr Donohoe doubled the rate from 1% to 2% in this year’s budget and was met with fierce opposition from the bookmaking industry. His officials had warned that alternative proposals to tax punters directly or the profits of bookmakers would not be possible this year.

He approved the rate increase only seeking clarification on what share of betting revenue was accounted for by the greyhound and horse-racing industry.

In the departmental submission, officials said the percentage-point tax increase could yield an extra €50 million in tax each year.

On the doubling of the betting tax, the department said the tax had not been increased since 1975 and had consistently been cut over the years.

In a statement, officials said: “Given the increased concerns regarding the social costs of problem gambling, it is now appropriate to increase the rates to better reflect the negative externalities involved.”

The department also committed to a review of the measure in 2019 to see what impact it is having.

Meanwhile, the Italian government has announced plans to increase tax on betting (up to 20%) and online gaming (24%) as part of its budget plans for 2019. In addition, the single tax levy for gaming machines – applying to both amusement with prize machines and video lottery terminals – will increase by 1.25% from January 1st.