The Irish government recently confirmed that all bookmakers could expect tax relief from 2020. This should amount to up to € 50,000. The higher sales tax, which has been around since January 2019, was named as the reason. After the increase, betting providers across the country had joined in protests. The gaming market in Ireland is currently undergoing restructuring, here is the key information.
National bookmakers should be protected
Tax breaks for Irish bookmakers – Germany CasinoTop Element 02For this purpose, the Government of Ireland has published a budget plan, which confirms that bookmakers should be relieved of around € 50,000 a year thanks to the sales tax, which has risen to 2%.
However, this is only one of the tax changes that the Irish budget provides for. There is also the fact that there will no longer be any obligation to broker betting from 2020, and that betting tax will no longer apply. If the government did not make this change, many independent bookmakers would go bankrupt.
Specifically, this means that the playmakers no longer have to pay tax on the first € 50,000 that they collect each year. Every calendar year, the upper limit of € 50,000 is renewed and set to zero. However, as already mentioned, this relief should only be for bookmakers who are also registered as sole proprietorships in Ireland.
Larger gaming companies such as: Boylesports, Paddy Power and Ladbrokes Coral ensure that the smaller bookmakers are at the mercy of a tough battle. At least, Finance Minister Paschal Donohoe made this clear. The tax doubling that took place last year had pulled the ground out of the way for smaller companies in the sector. The daily “The Irish Times” wrote that this relief is part of EU state aid law.
In an interview, the finance minister said that he had checked the tax again and had personally contacted bookmakers. In this way, an alternative system was created that relieved the burden on independent bookmakers.
Explanation: There was a cooperation between Minister of State David Stanton and Donohoe. Together, they had raised VAT from just 1% to two last year. A bookmaker has to pay this tax on every bet he makes. This step is expected to generate around € 95 million in the tax fund as early as 2019. This new law is directly related to government levies used to support the greyhound and horse industries. In 2020, this sector will receive funding of more than 80 million.
Tax breaks for Irish bookmakers – Germany CasinoTop BannerTax fiasco despite aftercare?
Even if the discharge is already planned, the forecasts, however positive they may appear, could not come about. An economic study, which was published in November 2018, calculated that several small bookmakers will be eliminated. This would create a budget deficit of € 35 million. The study was published by economics professor Anthony Foley. He currently works at the University of Dublin. According to the professor, the government only cited the positive effects, but not the negative ones. Therefore, there is a possibility that the losses will be much higher than the planned profits.
According to Foley, the big minus is caused, among other things, by fewer jobs and the resulting loss of income tax. He calculated this from the possible closure of 400 companies in the betting sector. This is almost half of the betting shops that exist in Ireland. Jobs of up to 2500 people are threatened. If you add their families, tens of thousands of people are affected in the long term.
In order to avert a crisis, the bookmakers had already pulled out all the stops at the end of 2019. In doing so, they wanted the tax increase to be suspended. Nationwide, the betting shops closed half a day to protest against the new tax law. A marketing campaign and a petition named “United” were also set up. The coordinating marketing company was McEnaney Media.
If you look at the international competition, the concern of Irish bookmakers is quite justified. The tax relief that was announced is therefore seen as consistently positive. It remains to be seen whether the forecasts will work out or whether Professor Foley’s calculations will turn out to be the sad truth.
Ireland is planning a new regulator
Tax breaks for Irish bookmakers – Germany CasinoTop Element 01In addition to all tax reforms, a new gaming authority will be set up in Ireland. It is scheduled to start operating in June 2020, rounding off the innovations on the gaming market. In this way, all license activity can be monitored. Customer protection, advertising standards and other measures are also part of their tasks. The Gaming and Lotteries Amendment Act, which dates back to 1956, was also updated. As a result, the maximum winnings and stakes of the slot machines were set at a fixed amount between 10 – 750 €. The lottery license system will then be renewed in further steps.
It is no coincidence that Ireland’s gambling sector is currently facing such extensive reform plans. Finally, the national health service HSE (Health Service Executive) went on the barricades. The number of addicts to gambling had risen dramatically in 2018. It is no longer surprising that the government is currently doing everything it can to reduce this number again. The aim is not only to modernize the sector, but also to adapt it to European standards. The developments that the Irish market is currently going through remain exciting.