Anthony Kaminskas, head of bookmaker AK Bets, has warned Irish customers are at risk of experiencing an inferior offering if firms have to make further contributions based on their turnover as part of the impending Gambling Regulation Bill.
The bill has generated plenty of controversy, particularly given it legislates for a ban on gambling advertising between 5.30am and 9pm, which both Racing TV and Sky Sports Racing warn would make it unviable for them to broadcast in Ireland.
It also provides for the establishment of a social impact fund, which will be operated by the newly formed Gambling Regulatory Authority of Ireland (GRAI).
The fund’s purpose will be to finance research, training, public education and other initiatives aimed at reducing problem gambling while also providing treatment services to those affected by gambling addiction, but it is understood it will not be eligible for state funding. Instead, bookmakers will pay a mandatory annual contribution to the GRAI that will be based on turnover.
Prior to the 2024 budget, the Tax Strategy Group (TSG), which is chaired by the Department of Finance, released a report in July which suggested a 0.5 per cent hike in betting duty from the current two per cent. This was met with consternation from the industry just four years after it was doubled from one to two per cent, a rise that triggered 100 shop closures and 600 job losses according to the Irish Bookmakers Association (IBA).
At the time, Kaminskas warned such an increase would result in Irish customers experiencing an inferior offering given the extra cost would have to be passed on to punters.
While betting duty was ultimately left unchanged in the budget, an annual contribution based on turnover to the social impact fund would be a tax hike in practice and Kaminskas feels Irish customers will be left to endure the consequences.
“Customers are going to start being treated differently to absorb this increase in tax,” he said. “It’s going to be passed on to them. The way this is going to develop is if a customer is getting 4-5 in England, they are going to be getting 8-11 in Ireland, that’s the way this is going. It genuinely makes no sense. It’s a highly regulated industry and it’s not like it was ten years ago.”
Given Ireland is one of the few jurisdictions to apply betting duty as a turnover-based tax, Kaminskas feels that it is becoming increasingly difficult for Irish firms to compete.
He said: “Gambling is a global market and operations within jurisdictions that have a turnover-based tax just will not be able to compete with those that don’t. This has driven customers to non-taxed operations, be it the black market or abroad, and it’s only going to get worse with another increase.
“The turnover tax is incredibly tough. We don’t actively try and recruit Irish customers with our spend anymore. We are sponsoring race meetings in the UK, we’re not sponsoring in Ireland because Irish customers are too expensive to service. We will take Irish customers but we’re choosing not to market to them and it’s going to get worse with another increase, so where do they go?
“Raising the turnover tax to two per cent has wiped out the independent bookmaking sector here,” he added. “If it rises again, the problem will get ten times worse. The government is creating a serious problem, it’s not aware of the butterfly effect of what it’s doing.”
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