Domestic bookmakers confident of not having to pay tax on online turnover

By Geoff Percival

Friday, December 11, 2009

IRELAND’s leading domestic bookmakers are confident of not having to pay a tax on the turnover they make from their online operations, despite analysts suggesting it might become a replacement strategy for the Government’s scrapped retail betting tax plan.

While the Government didn’t make any budgetary mention of its earlier controversial plans for an amended tax on bookies’ turnover from retail operations, analysts – Davy Stockbrokers and Goodbody Stockbrokers, in particular – suggested yesterday a tax on online operations could prove a reality.

That suggestion was based on this week’s budget proposals’ inclusion of a funding cut to the horseracing sector as a whole.

According to David Jennings of Davy Stockbrokers: "While the issue of tax on retail operations may be diminishing as a risk factor, there remains a veryreal opportunity that the Government could look to introduce a betting turnover tax online. The horse and greyhound industry had its funding cut by 13% in the budget to €59.2m and the Government may look to impose an online tax to make up this shortfall."

"However, against this is the argument Government may be reluctant to impose a tax on a growing global online business that has recently announced a further 250 jobs for the economy."

Goodbody analyst Killian Murphy said that such an online tax would potentially place the likes of Paddy Power and Boyle Sports at a competitive disadvantage to the likes of William Hill and Ladbrokes, as they would be the only ones liable to tax because they’re the only Irish betting chains with online gaming facilities.

Seemingly, both of the Irish companies aren’t expecting an online tax any time soon – both of their online businesses are headquartered in the Isle of Man, which would make the issue of taxing them more difficult – but a review body is understood to be examining the possibility of a tax being levied on the non-retail side of the betting industry.

In September, Finance Minister Brian Lenihan said it was his intention to widen the tax base to which betting duty would be applied, adding that his officials were looking "at the scope to overcome legal and operational difficulties in this area and will continue to do so on an ongoing basis."

This story appeared in the printed version of the Irish Examiner Friday, December 11, 2009