Wednesday, 10 November 2010
Tax Free Betting
Question 50: To ask the Minister for Finance his views on the possible introduction of an on-line betting tax; if he has considered in depth the implications of such a tax for employment within this industry here; and if he will make a statement on the matter. [41906/10]
I have stated previously that it is my intention to widen, if possible, the tax base on which betting duty would be applied.
We have a situation where bets placed through one platform, namely, betting shops, are subject to 1% betting duty but bets placed through other platforms are generally not. This is because bets placed either on-line or over the telephone are generally with out-of-State companies and applying betting duty has been difficult. This is an uneven situation and as the Minister responsible it makes sense to explore options to even out the position.
Consequently, I asked my officials, in conjunction with the Office of the Attorney General, the Office of the Revenue Commissioners and the Department of Justice and Law Reform, to look at the scope to overcome legal and operational difficulties in this area. I have stated previously in this House that any extension of betting duty will be applied on a fair basis and should not be perceived as an attempt to threaten jobs. Also, tax changes will be in tandem with ongoing work by the Department of Justice and Law Reform on issues surrounding licensing and regulation.
Some of the leading figures in the betting sector in Ireland have publicly stated they have no problem with the extension of the betting duty once it is done in a manner that is enforceable for all and, consequently, does not disadvantage Irish-based services.
I am trying to ensure that we can put together a solution that is fair and reasonable, has a sense of balance and will not threaten jobs.
Does the Minister recognise the substantially important aspect of this question related to jobs in this country, particularly businesses in my constituency but also throughout other constituencies where real people are employed by real businesses? How can he possibly introduce an on-line betting tax when seven of the top ten operators in this country are not based here in terms of their servers? It is a very complex matter.
Is the Minister aware of a recent announcement by William Hill that it has decided to get out of the British market in respect of Internet betting, where it describes the challenge of competing with betting exchanges and off-shore tele-betting operators, all of whom have been benefited from significant cost and tax advantages over UK bookmakers? Does he accept that if we are serious about this, we must keep people employed in this country and the introduction of an arbitrary tax could ensure that jobs are lost?
My answer makes clear that I agree with Deputy Brian Hayes that there are two very difficult issues here. One matter is the complex legal and operational matters associated with the introduction of such a duty and the other is the importance of ensuring that any such duty will not impact on jobs or employment in Ireland.
The third consideration that must be taken into account is that an Irish resident punter can place a bet at a racecourse or off-course in a main street betting shop and the entire burden of betting taxation in this country falls upon those categories, while the Internet bet is entirely exempt from any taxation contribution. That is a matter that any Minister for Finance must examine and he or she must ensure in the context of broadening the tax base that bets by Irish residents are treated in an equal manner.
Broadening the tax base is one matter but ensuring the hole is plugged because of a reduction in the receipts from excise duty on off-course betting is quite another. Does the Minister agree with the Taoiseach's comments in a speech, which, I understand, he gave at a dinner hosted by The Irish Field at the Irish Farm Centre on 13 May, where he suggested that "All forms of betting including betting offered over the Internet, other remote platforms or over the telephone should make a contribution". Why should they make a contribution exclusively to greyhounds and to the racing industry? Why should they not be making a contribution towards other sports in the country as well?
Has the Minister departed from his statement to the select committee on 10 December 2008 when he said "in the absence of a prohibition on such activity [that is, Internet betting] it is impossible to tax it because the server can be located in any part of the world". Has he changed his position from his statement in 2008?
Yes. We have managed to advance beyond that position and we are exploring various options that would ensure that those who are resident in Ireland and place bets can be subject to the same rate of duty. On the application of the proceeds of any such duty,-----