The Government will collect €20 million less in betting taxes this year compared to 2001, putting additional pressure on the public finances, new figures show.
But the public's appetite for betting continues to grow as full-year turnover from bookmakers is set to reach €1.65 billion, well above the €1.37 billion recorded in 2001.
The dip in tax revenues follows a Budget decision by the Minister for Finance, Mr McCreevy, to cut the rate of betting tax to 2 per cent from 5 per cent on May 1st, 2002.
Just €43 million in betting tax was collected by the Revenue Commissioners in the 10 months to October 31st, 2002, compared to €68 million for the full year in 2001.
The provisional figures - which were compiled from the tax returns made by off-course bookmakers to the Revenue Commissioners - show the tax take dipped sharply from May 1st, when the betting tax rate was cut to 2 per cent.
In the first four months of 2002, when the tax rate was 5 per cent, the Revenue Commissioners collected €27.7 million betting taxes. In the following six months, just €15.3 million betting taxes were collected at a rate of 2 per cent.
Taking an average of the betting tax collected during the past six months, it is likely the full-year tax take will come to a total of about €48 million.
Turnover from off-course bookmaking during the first 10 months was €1.31 billion, suggesting that full-year turnover will be about €1.65 billion this year.
Mr Stuart Kenny, former managing director of Paddy Power Bookmakers, said the increase in turnover demonstrated that the reduction in betting tax had been a good decision.
"The betting tax cut has been a success. Turnover is up and this has safeguarded employment," he said.
"Bookies are facing stiff competition from betting exchanges which pay no tax at all," Mr Kenny added.
But the precarious state of the public finances and the sharply lower-than-expected tax take in the economy for 2002 could put additional pressure on Mr McCreevy, who is renowned as a friend of the horse-racing industry.
Since being appointed Minister for Finance in 1997, Mr McCreevy has cut the rate of betting tax to just 2 per cent from 10 per cent .
