The government in Ireland has made attempts in the past to tax the online betting industry by taxing the profits of bookmakers who operate online or via telephone. As of now, these attempts have not borne fruit and the government has recently revealed that there are no immediate plans to tax bookmakers who operate over the telephone or online. This, it claims, is because it simply needs more time to examine the industry, so there may yet be changes in the future. The online gaming industry in Ireland is one of constant growth (far more so in today's modern gaming world than land based casinos) and as such the government is continuing to look into ways that it can impose taxes on the winnings from the online sector of the gambling industry.
Despite the decreases that can be seen in the profits from land based casinos in recent years, Brian Lenihan, the Minister for Finance in Ireland announced last month in his budget speech that he planned to increase the tax on licensed bookmakers with land-based operations from 1 percent to 2 percent on their turnover. This increase will come into effect at the beginning of 2009. However, at this stage, there will be no changes to the taxation laws regarding bookmakers who operate online or via telephone and they will in fact remain tax-free.
When the Irish government has attempted in the past to tax the online gaming industry, bookmakers have moved their operations to tax havens such as Gibraltar. Many of these bookmakers continue to operate from there. The Independent newspaper recently reported that as the bets that people place online are often routed through other jurisdictions it makes it difficult for the Department of Finance in the Irish government to impose taxes on them.
The United Kingdom is expected to follow Ireland's lead and increase taxes imposed on land based bookmakers as an attempt to raise some much needed revenue. It is expected that Chancellor Alistair Downing will target gambling machines in his pre-budget report, for increased taxes. An investigation conducted by the Gambling Commission watchdog expressed concerns that gambling machines may be addictive and in recent years, it has been noted that gambling done on these machines has increased the profits of bookmaker in the UK. It is due to this report that Darling is expected to target gambling machines specifically.
