Ireland to tax egaming, impose licence regime

Thursday 18th February 2010 | EGR Magazine

IRELAND has confirmed it is to tax online betting and introduce licences for overseas betting providers, citing the need to secure funding for the racing industry.

The Irish head of government (Taoiseach) Brian Cowen said at a dinner last night hosted by racing newspaper The Irish Field that legislation would be introduced requiring overseas operators to attain a licence in order to offer products into the Irish market.

“This will have the additional benefit of facilitating the extension of the tax regime for the betting industry to all those providing online and telephone betting and so underpin funding for the racing industry,” Cowen was reported as saying by broadcaster RTE Business.

Paddy Power chief executive Patrick Kennedy has consistently argued that the solution to safeguarding the future of the Irish racing industry does not lie with licensing and taxing all online operators active in the country and banning those without permit to advertise.

Kennedy told the Irish Times recently that such a ban would be doomed to fail as online operators do most marketing and customer acquisition online, citing the example of Australia, a territory Paddy Power entered last year via its Sportsbet buy.

“Australians now spend more per head on poker than in the UK, where it is legal,” he told the paper in February. Australia's advisory body recently recommended repealing the laws.

UK bookmakers William Hill and Ladbrokes cited pressure from low-tax operators such as Paddy Power and Gibraltar-headquartered Bwin when they moved their operations offshore last year.

The bookmakers’ offshore move was swiftly followed by the UK government in January announcing plans to introduce a licensing regime for all egaming operators active in the UK market.

Ladbrokes credited the move of its sports book offshore with a 40% rise in operating profit from its egaming division.

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