An imminent rise in gambling tax to two per cent could see large swathes of Ireland’s landed betting trade, and maybe other gaming sectors, hewn away, say industry advocates.
Budget 2019 in the Republic of Ireland is set to double the rate of gambling revenues, from one to two per cent.
Finance minister Pascal Donohoe has included the proposal as a concession to government coalition partners the Independent Alliance – who had stipulated that part of the anticipated E50m in additional tax revenue be directed towards gambling-addiction services.
Alliance-member John Halligan earlier this year laid out what appeared to be the group’s stance on gambling, claiming, “when you speak to individuals or organisations dealing with addictive gambling they will tell you that it is destroying the lives of thousands of people and families.”
But industry stakeholders have been quick to raise concerns over the tax-hike – particularly those within the country’s landed betting-shop trade.
“We are extremely worried about reports that the betting tax is to be doubled in the upcoming budget,” said Sharon Byrne, chair of the Irish Bookmaking Association. “An additional one per cent tax on turnover will force almost all independent bookmakers out of business overnight, along with many of the smaller shops controlled by multiple operators.”
Retail betting has already taken a battering in Ireland. Steep economic decline following the 2008 financial crisis saw the sector much reduced: with just 800 betting shops currently in operation – out of nearly 1,400 a decade ago.
“While the market decline has now stabilised, we remain extremely vulnerable to any changes in our cost- base as overall staking levels remain under threat,”continued Byrne.“ The business is characterised by very low margins and any change in our cost base could be catastrophic, particularly to the smaller operators.”
Whilst heavyweights like PaddyPower make up the bulk of landed betting presence in the Republic, a sizeable chunk – nearly 35 per cent – remain independent, local operations, which collectively employ around 1,500 people. The IBA has cautioned that any increase in tax could place these jobs in jeopardy.
Irish ministers have been quick with rod and scant with carrot when it comes to relations with the gambling industry of late. Earlier this year the government engaged in a wave of inspections and seizures of unlicensed gambling machines – resulting in a rush of licensing applications as operators hurried to meet compliance.
Irish operators might be forgiven for disinterest in regulations – as legislators have shown nothing but disinterest towards them for over sixty years. Legislative redress and modernisation of machine standards remain stubbornly elusive in the country. The last time an Irish government passed a law pertaining to gambling regulation was in 1956 – eighteen years before minister Donohoe was born. Perhaps he’ll have the foresight to realise you can’t tax an industry without permitting it a framework to sustain itself.