Paschal Donohoe (Dublin Central, Fine Gael)
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Amendment No. 64 from Deputy O’Callaghan seeks a report on the possible impacts of increasing the rate of betting duty. In any discussion around betting duty, it is important to acknowledge the potential harm to society from problem gambling and the need for a robust framework of regulation in this sector. In this regard, I welcome the establishment of the Gambling Regulatory Authority of Ireland which is a progressive step towards replacing our outdated gambling laws with a streamlined and simplified licensing framework.

Betting duty in Ireland is applied as a turnover based tax, whereby the tax charged is based on the amount of the bet placed by customers in the State. Betting intermediaries are also liable for betting intermediary duty on the commission charged by them to persons in the State. In budget 2019, the betting duty rate for retail and online operators increased from 1% to 2% and the duty for betting exchanges also increased from 15% to 25% of commissions earned on a bet. The rate increases introduced in 2019 were significant and resulted in a doubling of betting duty receipts since that time. It is still overwhelmingly paid by a very small number of large firms. To offset the impact of the 2019 increase on smaller operators, budget 2020 introduced a relief in the form of a tax credit of €50,000 per year, to be applied on a single undertaking basis. This relief is subject to EU state aid rules.

In consideration of any potential change to betting duty, it is important to take account of wider changes affecting the industry such as the increased level of regulation and compliance that the new Gambling Regulation Act involves. Any potential changes to betting duties are kept under review as part of the tax strategy group and budgetary cycle. This is in line with how the Department develops tax policy, and I will not be asking for additional reports. Taking these considerations into account, I do not propose to accept this amendment.

To respond to some of the points the Deputy made, I believe the majority of betting that takes place in the State is done in a responsible and low-impact way by people who are involved in it. However, I, like the Deputy, have come across a number of examples where it has grown into an addiction, and it has inflicted a huge harm on those who have ended up with addiction difficulties and caused huge harm to their families and loved ones. That is why the setting up of the Gambling Regulator is an important action. Deputy O'Callaghan may be aware that one of the steps the Gambling Regulator will be taking will be to introduce a social impact fund that will be based on the profits after payout in a percentage that will be determined by the Minister for justice. That fund will support organisations involved in dealing with the very difficulties the Deputy referred to. This is a very welcome proposal.

I have heard the argument made that we should increase betting duties so we can fund an organisation in that kind of work. There are all kinds of challenges in making sure that if tax goes up in one area, it is then used for a very specific purpose. This is a far more effective way of dealing with the matter because it will be a fund overseen by the regulator. It will be able to ensure it is used to fund organisations involved in addiction prevention and addiction support. I look forward to seeing that fund set up and the Gambling Regulator play its role ensuring those who profit from this sector do so in a responsible way because the majority of betting takes place in a responsible way. The harm that a small number of people suffer is something we have to do a better job of responding to.