Leading firms say online wager tax not viable

BOOKMAKERS:PROVISIONS IN the Finance Bill that would see betting tax extended to online operators are unenforceable, leading bookmakers have claimed.

Boylesports, which operates 141 stores throughout the State, in addition to its online betting service, has said Irish-based bookmakers will be penalised unfairly by the move because the exchequer will be unable to collect tax from online operators based in other jurisdictions.

Minister for Finance Brian Lenihan announced in the Budget last December that the Government intended to extend the existing 1 per cent levy on betting turnover in bookmakers to online bookies that had previously been exempt from the charge.

The measure is expected to raise about €20 million extra in a full year, but commercial lawyers have warned it could force Irish online operators to move offshore at the expense of jobs in Ireland.

The Finance Bill also includes details of a new “betting intermediary duty” for betting exchanges, such as Betfair, which will apply at the rate of 15 per cent on the commission they receive from Irish punters.

Mark Nunan, head of marketing at Boylesports, said extending betting tax gave online operators located outside the State an unfair advantage.

“We don’t have a lot of industries doing well right now and one of the sectors that is held in high esteem is the bookmaking industry,” Mr Nunan said. “To be overtly penalising us, while at the same time offering incredibly strong tax incentives to foreign companies to base themselves here, seems a little strange.”

The State’s biggest indigenous bookmaker Paddy Power was also sceptical of the provision, saying that “a bullet-proof approach” would be required to make it work fairly.

“We have to wait to see how they are going to enforce this but it’s hard to see how they will, short of sending out civil servants to the Caribbean to check the books,” said the group’s head of communications Paddy Power.

“These bookmakers are people who make their living by playing ‘catch me if you can’ with the authorities and no government in the world has been able to nail the collection issue yet.”