Ireland facing €35m gambling tax black hole

5 November 2018

Ireland’s government could see a €35m hit to its coffers due to the closure of hundreds of betting shops because of the controversial doubling of gambling tax.

A study carried out by academic Prof. Anthony Foley, emeritus associate professor of economics at DCU, indicates that the government will raise nowhere near the €50m suggested when Finance Minister Paschal Donohoe announced the tax change in last month’s Budget.

The report, commissioned by the Irish Bookmakers Association (IBA) said the new measure "does not appear to have involved consideration of the possible negative effects on the existing tax take from the sector in such as income tax, USC and PRSI and increased expenditure from unemployment due to job losses".

Foley wrote: "Arising from Exchequer revenue reduction, due to loss of other taxes, job losses and possible closures, the Exchequer losses could be in excess of the gain from the 100% increase in betting tax for the retail sector, if shop closure rates are at the rate predicted by the industry."

The IBA has suggested that 1,500 jobs will be lost and up to 400 shops will close if the tax is increased from 1% to 2% of turnover.

Foley’s study was commissioned last month by the IBA as it responded to the Budget, which was announced on October 9. At the time the IBA suggested there was a four-week window in which the government could be persuaded to rethink the tax change. iGamingBusiness.com understands that the Finance Bill will be voted on in Parliament in around two weeks’ time. It is believed the IBA is pessimistic about its chances of forcing the government to rethink the tax change.

According to the Irish Independent, Sharon Byrne, chairwoman of the IBA, said the report "highlight[s] the fact that no costing was done in the Department of Finance for this measure."

"We are hoping that Minister Donohoe will see that the tax is flawed and might consider an amendment to bring in a more appropriate tax that can still bring in a lot more revenue for the Exchequer but in a fairer way that can keep the little guys open," she said.

Image by: Oireachtas