Paddy Power profits rise 21% in Q1

PADDY Power is committed to job creation in Ireland, despite the effect of the proposed tax on revenues from online operations potentially putting it at a disadvantage to some of its competitors.

The Irish bookmaker — which yesterday reported that group revenues have risen by 21% since the beginning of 2011 on a year-on-year basis — said it will be a meaningful contributor to the Government’s jobs target.

Since the onset of the economic downturn, Paddy Power has created 480 jobs in Ireland and is set to create another 500 by 2013.

Speaking after the company’s annual general meeting in Dublin, chief executive Patrick Kennedy said that while two-thirds of Paddy Power’s profits are now generated outside of Ireland, firmly making it an international company, it was born and bred in Ireland.

“Paddy Power is now one of the ‘go to’ companies for honours maths graduates from Irish universities. In fact, we can’t get enough of them due to the lack of supply. These are exactly the type of jobs that this economy needs right now,” Mr Kennedy said.

However, the mooted 2% tax on betting firms’ online revenues would hit Paddy Power’s annual operating profits by about €5 million.

A long-standing fear has been that the company could move its online operations (and future jobs in the division) to a tax-free location such as Gibraltar.

Mr Kennedy reiterated the company’s long-standing view that it supports the tax as long as it’s equally applied to all players in the market. He said the concern was that it could be near impossible to tax the 80% of the market that is tax domiciled outside Ireland — something which the French authorities have found in their online betting market.

Mr Kennedy was more critical of the Government’s attempts to tax bookmakers in order to fund the Irish horse racing industry. He called this “a fig leaf for the Government, as they find it difficult to admit that in these tight economic times they’re providing €50m per annum of direct funding for horse racing prize money”.

He added: “Almost 90% of the bets we take online and on the telephone, have nothing to do with Irish racing. It’s akin to levying Google to fund the DAA because they use Dublin Airport on a frequent basis.”