Written answers

Tuesday, 27 November 2018

Department of Finance

Betting Regulations

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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147. To ask the Minister for Finance the analysis undertaken regarding increasing betting taxes; if the industry was consulted in relation to the issue; if revenue raised from a betting tax will be held in central funds; his plans to redistribute funds to support services for persons with gambling addiction; and if he will make a statement on the matter. [48906/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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As announced in the Budget I have increased the rate of betting duty from 1 per cent to 2 per cent for all bookmakers and the rate of betting intermediary duty from 15 per cent to 25 per cent on the commission earned for betting intermediaries. These measures will take effect from 1 January 2019. All receipts from betting duty go to the Exchequer.

The rate of betting duty at 1 per cent on the amount of bets wagered in Ireland is at an all-time low, and betting duty receipts are exceptionally low when compared to other sectors subject to excise taxes. It is also the case that there is no VAT applied on betting transactions. With the Betting (Amendment) Act 2015 now well embedded in, I believe it is timely to increase the rates of Betting Duty and Betting Intermediary Duty.

I am familiar with arguments put forward by the betting sector regarding the impact of the increase in betting duty. I acknowledge that advances in technology have challenged existing business models and have changed the structure of many markets, including the betting market, with more betting taking place online. I further acknowledge that smaller bookmakers may have ongoing difficulties competing in that environment or indeed with large retail bookmakers. While I have sympathy for small bookmakers I cannot apply the increase to some bookmakers and not others. Ultimately many taxes on goods or services are passed through to the end consumers and bookmakers will need to make commercial decisions on such matters.

I should point out that my Department held a consultation with the sector last year asking if the current model was appropriate and the overwhelming response was that it was. The main focus of the sector's engagement during this consultation was to oppose any increase in the betting duty, which leaves me with few options in this regard other than to impose a straight forward increase in the current regime.

We must acknowledge the raised public consciousness of the problem of gambling in society. While problem gambling can result in the problem gambler, and their family, bearing the severest of economic and of course personal costs, the social costs of problem gambling can extend to their employers and to public institutions in the health, welfare and justice systems, such costs ultimately borne by taxpayers. This needs to be better reflected within the betting duty regime.

The Government fully accepts that the issue of problem gambling is a serious one that needs to be addressed. Earlier this year the Government approved the drafting of a new general scheme of a Gambling Control Bill which will provide for a strengthened regulatory framework for the wider gambling sector. My colleague, Minister of State Stanton, has stated that a key element of the proposed new Gambling Control legislation is that it would permit the establishment and operation of a social fund supported by industry levies, further that such a fund will support those professional expert organisations involved in addiction treatment.

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