Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Amendment No. 67 requests a report on the options on the introduction of a 3% betting duty for both on-line and in-shop bets. There have been a number of calls for an increase in the rate of duty applying to betting. However, I have always maintained that my preferred approach has been to first put a regulatory regime in place for the sector and to extend the base on which the 1% rate applies, ensuring the tax is applied fairly and widely on a level playing field for all. This is being put in place by the Betting (Amendment) Bill 2013. All taxes are reviewed on an ongoing basis by officials from my Department and the Revenue Commissioners and this will be no different. When we can be sure that we have in place a framework that captures all betting, all other options, including rate increases, can be considered. However, the priority is to extend the tax to the remote sector. I will not accept the amendment for those reasons.

Amendment No. 68 replaces section 21 of the Betting Act 1931 and provides for the extension of opening hours for registered bookmakers’ premises from 7 a.mm to 10 p.m. year round, subject to closure on Good Friday and Christmas Day. It also provides for penalties where these opening hours are contravened. These provisions are contained in the Betting (Amendment) Bill 2013, which is currently before the Seanad. However, issues raised by the EU Commission and Malta under the EU Technical Standards Directive means that the Bill is in standstill and will not now be enacted before the end of the year. It is necessary to provide for the extension of opening hours in the Finance Bill to provide certainty for the bookmaking industry, which estimates that the existing restricted opening hours from September to March result in some 500 jobs being lost annually in the industry. I commend this amendment.

The betting Bill was introduced to the Seanad on the basis that it would clear the European Commission by the end of September or early October. At that stage, Malta launched an objection, as is its right, so the Bill is further delayed while the Commission examines Malta's objection. The reason for the objection would be well known to most Deputies, as it has an extensive on-line industry and does not wish us to follow through on our proposals. Malta cannot delay us indefinitely and I understand the Commission will make a decision some time in the new year, as the standstill period runs out in the first week of January 2015. We can complete the Bill in the Seanad at that stage before returning to the Dáil. I brought forward the element of the Bill that extended opening hours for traditional bookmakers because 500 people are losing their jobs because they are regarded as temporary or seasonal staff, as they are not retained during winter months. This will allow bookmakers to retain such staff for the winter months.

Deputy Pearse Doherty's proposal takes us back to a time when there was a more serious levy on betting. Currently, a bookmaker would absorb the levy but in the olden days, when I was in a bookmaker's office more often than recent years, the option was to pay the tax on the wager or the winnings. If the tax was paid on the wager, it became part of the bet, so it accumulated in the winnings. That was one way of doing it. The levies do not now apply to winnings but rather to turnover. Bookmakers are subject to normal corporation profits tax, so this would be an additional tax.

It is an additional tax and if one makes an assumption as to how much of a bookmaker's turnover is profit, let us say 7% or 8% at most, although they will claim that it is significantly less, and one does the sums on that basis, a 3% levy on turnover becomes a very high levy on profits. As the Deputy said himself, 93% of what they take in is given out in winnings. If one applies this turnover charge to the profit margin, it may be excessive. That said, I am prepared to discuss it. We will be back in the new year, hopefully, to have a full debate on the betting Bill once it clears the stand still period in the Commission. I am sticking to the 1% levy at the moment because I want to equalise the online market with the traditional bookmaker market. I do not want to disadvantage the traditional bookmaker by not having a levy on the online area or by having a bigger levy on the traditional bookmaker. I am open to the Deputy's input and advice on what he thinks an appropriate levy might be but the first step will be to place a 1% levy on online betting to equalise it with the levy on traditional bookmaking. We will see what level of compliance we achieve. If we have a proper base for the levy, we can then discuss whether it is in the interests of the betting and blood stock industries to increase that levy by 0.5% or 1%. My intention, however, is not to do that at the introduction of the betting Bill when it passes all Stages in the Seanad and the Dáil early in the new year.