Knives Out for Paschal Donohoe Following Irish Gambling Tax Hike

The Irish gambling tax rate will double from one percent to two percent next year following a recent announcement by finance minister Paschal Donohoe.

Paschal Donohoe

Irish finance minister Paschal Donohoe has been accused of putting the country’s betting industry in jeopardy after doubling the tax rate. (Image: paschaldonohoe.ie)

Outlined as part of the Irish government’s Budget 2019, the new levy will apply to retail and online bets from next year. As well as doubling the rate for traditional bookmakers, Donohoe has raised the tax rate on bets made through exchanges from 15 percent to 25 percent.

Reacting to the October 9 announcement, industry insiders described it as a critical blow for the industry. Within 24 hours, Irish betting brand Paddy Power Betfair saw £250 million wiped of its value. Despite being positive earlier this year following changes to fixed odds betting terminal laws (FOBTs), the latest news has already seen shares fall by five percent.

Analysing the forthcoming changes, a spokesperson for the company told The Telegraph that its annual betting duty in Ireland will increase by £20 million. Although Paddy Power Betfair’s closest rivals will take less of a hit, the Irish gambling tax increase will have a knock-on effect across the UK.

Irish Gambling Tax Hike to Cause Countless Casualties

Tackling Donohoe on the issue during a live phone-in on RTE Radio 1, Jimmy Finley said that the change was “patently unfair.” Pressing the issue, the listener, who claims to have a background in the betting industry, said the changes will further damage an economy that’s already hurting.

“I think you’ve shot yourself in the foot, you’ve damaged a whole sector, any population in Ireland with a population of 2,500 or less is going to be left without a betting shop, illegal betting is going to take off again, you’re going to be the loser with all these businesses going out of business,” Finley said.

Defending his decision, Donohoe said decisive action was necessary give then current economic climate.

I have increased the tax because I do need to raise revenue to be able to pay for public services that we need overall. In the absence of agreement, I decided on something that needed to be done,” the finance minister retorted.

Gambling Remains Political Hot Potato

While Donohoe has been criticised for acting too quickly, the British government has come under fire for not acting quickly enough. After committing to cutting the maximum stake for FOBTs back in May, ministers have yet to implement an enforcement date.

The plan is to have bookies reduce the maximum bet from £100 to £2 by spring 2019. However, the lack of clarity has led the Local Government Association to call for the date to be moved forward as it will cost gamblers £3.6 billion.

What’s clear from the latest debates is that parties on either side of the gaming divide are happy when politics disrupts the natural order of things. However, with big businesses already losing money, the Irish gambling tax debate looks set to rage on well into 2019.

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