Betting levy would oblige punters to hand over 2% of profits on winnings

PUNTERS WOULD have to hand over 2 per cent of their profits on any winning bets to the State under a measure that is being considered for next December’s budget.

The Department of Finance is looking at a proposal to levy the charge on returns on winning bets placed by customers in bookie shops in the Republic as part of an overall shake up of betting tax.

The department did not comment on the proposal yesterday, but two of the Republic’s biggest bookmaking chains, Paddy Power and Boylesports, confirmed that they were aware of the plan, and both warned that it would drive more business to online operators based outside the State if it were introduced. While the proceeds would theoretically be used to help fund the horse and greyhound racing industries, Department of Finance sources pointed out that any money raised from any tax goes direct to central funds, with no guarantee that any industry gets a share of the proceeds.

Currently, bookmakers pay a 1 per cent levy on every bet placed in betting shops in the Republic, while wagers placed online are not taxed, as there is a fear that this would drive business away from Irish bookmakers with internet operations based in the State.

The Government is working on devising a system for taxing all online operators, irrespective of where they are based, and has been in talks with bookmakers, Horseracing Ireland (HRI) and the Greyhound Board, since last year in an effort to resolve this issue.

The State is seeking to tax internet betting in an effort to shore up a shortfall in funding for horse and dog racing.

Up to 2008, there was a link between betting tax and funding for both sports. However, Minister for Finance, Brian Lenihan, broke this link in his budget that year, and Government aid for racing has fallen since then.

Government sources say that the 2 per cent tax on winnings is being looked at in this context, along with a number of other proposals, including a licensing system for online operators.

Paddy Power chief executive Patrick Kennedy argued yesterday that all bookmakers would be forced to absorb the charge or face the possibility of losing business to online and telephone operators based outside the State.

He said it would ultimately have the same impact as the doubling of the existing 1 per cent charge proposed by the Government in 2008, which was then dropped when the industry said it would result in shop closures and job losses.

A spokesman for Boylesports said that the plan was inequitable from the viewpoint of bookmakers operating in the Republic and employing people here.

Both Paddy Power and Boylesports have said that they would not oppose any tax on internet or other operations once it was applied equitably and did not disadvantage homegrown operators.