The Irish online gambling industry got a temporary reprieve this week,
after the government announced that it was putting its plans to tax this market
on hold for the moment. This means that all bets and wagers taken online over
the telephone in Ireland would remain tax-free.
The government said that it needed more time to examine the options available
to it as it searches for a way to derive revenue from this industry.
The Irish government has, in the past, attempted to tax the Irish online
gambling and betting markets. The response to this was that betting operators
simply upped and left their Irish bases, shifting their headquarters to tax
havens such as Gibraltar.
While the government wants to avoid this happening again, it still feels that
taxing this industry in some form of another will be of benefit to its state
coffers, since online gambling makes up the bulk of the Irish gambling market.
Gambling operators such as Paddy Powers, with much of their business done
online, continue to turn excellent profits, while the land-based gambling
industry has seen profits nose dive in the past year.
This has not stopped the Irish government, however, from imposing double
taxation on land-based operations. In his budget speech last month, the
country's Finance Minister, Brian Lenihan said that from the beginning of 2009,
land based betting operations would need to pay a 2% tax on their turnover.
It remains to be seen if and how the Irish government plans to impose
taxation on the internet gambling community.
