Bookmaker alarm in Ireland following suggested 0.5 per cent hike in betting duty for next year's budget

Bookmakers in Ireland face an anxious wait ahead of October's budget as the Tax Strategy Group (TSG) has again suggested increasing the betting duty by 0.5 per cent to raise an estimated additional €25 million.

It is the second year in a row the industry has been confronted with such a suggestion and there was considerable concern before last year's budget when a similar hike was proposed.

While the TSG is not a decision-making body, it is chaired by the department of finance and its reports are to be considered in the budgetary process. Ireland is one of the few jurisdictions to apply betting duty as a turnover-based tax and it was doubled from one to two per cent in 2019, a rise which, according to the Irish Bookmakers Association (IBA), triggered 100 shop closures and 600 job losses.

Anthony Kaminskas, head of bookmaker AK Bets, previously warned that Irish customers are at risk of experiencing a tailored and inferior book if firms have to make further contributions based on turnover.

Anthony Kaminskas (centre): has warned of consequences for punters if bookmakers have to increase contributionsCredit: Caroline Norris

The TSG estimates that increasing the betting duty percentage to 2.5 per cent would raise an extra "€25m in a full year" and also suggested that the current tax credit of €50,000 available to bookmakers, which is applied on a single undertaking basis, be increased to €65,000 per firm to "benefit small independent retail bookmakers whose turnover is less than €2.5m". 

The report read: "Overall, betting duty generates a modest amount of revenue for the exchequer compared with the other excise taxes. It is clear however that increasing the percentage rate from one per cent to two per cent has resulted in an almost doubling of receipts from 2018 to 2023. 

"In their pre-Budget 2025 submission, the Irish Bookmakers Association indicated that the introduction of the €50,000 relief in budget 2020 has provided some respite for smaller operators in relation to the increased rate. However, it is acknowledged that as the relief applies on a single undertaking basis, the impact of the measure reduces where a bookmaker or group has a number of different operations.

"Increasing the betting duty rate by 0.5 per cent is estimated to raise €25 million in a full year, while increasing betting intermediary duty commission by 5 per cent to 30 per cent would raise €800,000 in a full year.

"These estimates are based on the betting market continuing as normal in 2024 and 2025 and take no account of behavioural changes, either amongst providers or consumers of betting services. It is understood the burden of such additional tax increases would mainly impact large bookmaking firms."

The paper noted that receipts from betting duty totalled €102.7m in 2023 with 46 per cent of the contribution coming from the retail betting market.

The proposed increase comes at a time when the Gambling Regulation Bill is negotiating the final stages of the legislative process in Seanad Eireann (Ireland Senate). The bill, which legislates for a contentious watershed ban on gambling advertising, also provides for the establishment of a social impact fund, which will be governed by the newly formed Gambling Regulatory Authority of Ireland (GRAI).

The fund's purpose will be to finance research, training, public education and other initiatives aimed at reducing problem gambling while also providing treatment services to those affected by gambling addiction, but it is understood it will not be eligible for state funding. Instead, bookmakers will pay a mandatory annual contribution to the GRAI that will be based on turnover and additional to betting duty.

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