Many online casino and sports betting providers in Ireland have expressed concern over a proposed betting tax hike. The announcement about the hike was made by the government’s Tax Strategy Group, and it comes ahead of the 2021 budget plan.
According to the announcement, the plan is to include the proposed tax hike in the national budget this month. Senior civil servants who form part of the Tax Strategy Group said that the move could result in millions in extra revenue for Ireland over the course of next year. However, the revelation has sparked concern among bookmakers and led to a warning from the Irish Bookmakers Association.
Businesses Still Reeling from Pandemic
There are various reasons why bookmakers and industry bodies are concerned about the hike. One of the key reasons is that the global pandemic has hit all industries hard, particularly brick-and-mortar casinos and sportsbooks. After several months of closures as a result of the lockdown, many have made huge financial losses that they are still struggling to cope with.
The pandemic impact has also resulted in many people in these businesses losing their jobs, which has put the bookmakers under added strain. On top of this, with consumer confidence still very low and many people on limited incomes, the level of custom is still low, which means that bookmakers are still feeling the impact of the ongoing crisis.
By increasing taxes, there is a big risk that businesses will be put under unmanageable strain, and this could see many of them go under. The Tax Strategy Group does plan to bring in some tax relief measures as well, but this will be counteracted by the tax hikes and will not apply to all bookmakers.
Struggling with the Last Hike
The Tax Strategy Group has said that it is looking to increase betting taxes by 0.25 percent, which would take the rate of 2.25 percent. However, one of the other key issues is that there was a hefty hike in betting taxes last year, which saw rates double from 1 percent to 2 percent. Many betting businesses are already struggling as a result of the last hike, so another one could be the final nail in the coffin for their businesses.
One industry official from the Irish Bookmakers Association said that smaller and medium-sized betting businesses would be particularly hard hit by any new tax hike. In fact, she went as far as to say these bookmakers will have no hope of surviving if the government goes ahead with the tax hike. She added that even for larger businesses, the tax hike would most likely wipe out the profitability of most of their retail establishments.
Tax Relief Won’t Help All Betting Businesses
The Tax Strategy Group has tried to allay concerns by stating that there will also be a tax relief scheme for betting shops, and this will help them in terms of their finances. However, the IBA said that this would only benefit a handful of businesses.
An official from the IBA said, “That helps someone who owns one or two shops, and there are about 30 of those left in the country – everybody else who owns three, four or five [shops] are in dire straits because of the tax.”
She also said that it was vital to save as many jobs as possible, as the future was a very uncertain one as a result of the impact of COVID-19. However, these tax hikes could have the opposite effects and could result in even more people losing their jobs.