'We can't take another increase in betting tax' - bookmakers fear viability of shops if Irish betting tax increases in budget

Retail bookmakers in Ireland are holding their breath over Tuesday's budget and waiting to see if the government will implement another increase in betting tax which the Irish Bookmakers Association (IBA) has labelled "unsustainable" and "detrimental".

The Tax Strategy Group (TSG), which is chaired by the Department of Finance and whose proposals are to be considered in the budgetary process, released a report in July which suggested a 0.5 per cent hike in betting duty from the current two per cent,  just four years after it was increased from one per cent.

On a crucial day for the sport the budget will also reveal government funding for horseracing in Ireland, which rose by €2.4 million to €72.8m in 2023. That represented a 3.5 per cent increase on the 2022 figure, which was down from €76.8m in 2021, a sum that was inflated due to the need for pandemic support. The pre-pandemic figure for 2020 was €67.2m.

Horse Racing Ireland (HRI) previously advocated for an increase in betting duty but IBA chair Sharon Byrne said such an increase would have a profound impact on the viability of retail shops in Ireland.

Byrne said: "We’re all very anxious. We had submitted a very extensive submission to the government this year and we did a paper with Tony Foley [emeritus associate professor of economics with the DCU Business School] that delved deep into the workings of betting shops and the financial pressure they are under. With the announcement of the 21 shop closures in Paddy Power last week, we’re down now, for the first time in the recorded history of the IBA, to around 750 shops.

Sharon Byrne: "We’re all very anxious"Credit: Patrick McCann

"The paper we produced demonstrated exactly just how detrimental the 100 per cent increase was to the viability of betting shops in 2019. Hopefully the government will see that we cannot take another increase in betting tax.

"There’s no doubt about it that there are a lot of shops just teetering on the edge. Unfortunately, a lot of members are stuck in leases with personal guarantees and they can’t get out of them. If the tax goes up again, they will be in deeper trouble. Hopefully we have provided enough data and facts to demonstrate how another increase at a retail level is just not sustainable."

In August, Anthony Kaminskas, founder of AK Bets, said the increase would lead to Irish punters receiving an "inferior offering" due to the extra tax being passed on to the customer, while he predicted there would be a boom in black market operators as licensed bookmakers would struggle to compete.

Byrne echoed these sentiments, saying the threat of illegal layers was real and that the scope for bookmakers to tailor what they are offering had been severely curtailed as costs go up meaning punters will inevitably seek better value elsewhere.

"I think that the black market threat is visible to most people," said Byrne. "Anyone who frequents a pub will have seen someone sitting in a corner taking bets. More recently, these WhatsApp groups have been going around taking bets so it is far from an idle threat."

She added: "It’s very difficult as everyone in a betting shop has a phone in their pocket and if you’re offering less attractive prices than what is on your phone then why would those punters bet in your shop? The freedom to choose what you’re offering is a lot more limited now."

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