Bookmakers will be lobbying the Minister for Finance to reduce betting tax to protect their business following the abolition of this tax in the UK.
Mr Brian O'Farrell, administrator of the industry's lobby group, the Irish Independent Betting Officers Association (IIBOA), said it would request an urgent meeting with Mr McCreevy. Its main concern is that the UK chancellor's decision - announced in the budget yesterday - to abolish betting tax will prompt its customers to switch their business to Northern Ireland and UK bookmakers through the phone or over the Internet. "The Minister has always listened to us and we are expecting a reasonably good response from him," he said.
Mr Austin Rogers, telebetting manager at Terry Rogers Bookmakers, was concerned the growth in Irish betting turnover since betting tax was reduced from 10 per cent to 5 per cent two years ago would be hampered. "Betting turnover has probably risen by as much as 45 per cent since the reduction in betting tax here but there is a real danger that much of this business will once again go offshore," he said.
Mr Stewart Kenny, managing director of Power Leisure, welcomed Mr Brown's move saying the Chancellor had set a course towards tax-free betting. "It will have a positive effect on turnover and activity and now makes the UK a very attractive base for betting operations".
The initiative is being viewed as a bid to protect UK bookmakers from cheaper offshore betting. Mr Brown is scrapping the system in which the British government collects betting duty of 6.75 per cent from bookmakers, which is passed on to punters in a 9 per cent tax. Bookmakers will be taxed instead on their gross profits at a rate of 15 per cent. Bookmakers are expected to absorb all the costs of the new tax themselves allowing punters to bet tax-free in the UK.
Mr O'Farrell said the IIBOA was likely to seek a reduction in betting tax, possible to 2 per cent in shops and 1 per cent over the Internet, rather than an abolition. It will be advocating a more simple mechanism than the 15 per cent tax on gross profits that will apply in the UK.
The changes will come into effect from January 1st, 2002.
The Minister for Finance cut the rate of betting tax to 5 per cent in 1999 in line with an international trend to reduce the duty collected on betting.
William Hill chairman Mr John Brown said the international potential for British bookmakers to capitalise on free betting was huge. "The British punter wins because this will make it possible for us to offer deduction-free betting for the first time since betting shops were introduced 40 years ago."
