Westmeath’s bookmakers are fearful for the future of their businesses following the doubling of betting duty announced in this week’s Budget, with a number fearing they may have to let staff go.
The increase in betting duty from 1 to 2 per cent means that instead of paying one cent for every euro they take in, bookmakers will have to pay two cents from January 1 2009.
“It is a major burden for bookmakers to carry the extra 1 per cent betting duty. We can’t claim this back against expenses, so we are being doubly taxed,” Joe O’Meara of O’Meara Bookmakers, Athlone told the Advertiser.
Mr O’Meara believes he may have to let one staff member go as soon as the new rates come into effect on January 1 2009. “There will certainly be job losses, both here in my own business and across the country. It is thought there will be job losses for up to 7,000 people nationwide.”
Manager of Mullingar’s Sports Room Bookmakers, Tony Collins, says that the increased rates of betting duty will mean bookmakers are being “doubly hit” by the economic downturn. “Things have gone quiet anyway. Smaller firms are just about hanging in as it is, and this means we are being doubly hit,” said Mr Collins, who says he will be unable to take on any extra staff or expand the business in the new year.
“The bigger bookmakers call the shots. In the past customers used to pay the betting duty, but when the big firms came in they absorbed the duty and paid it themselves, so smaller firms had to lower their rates and pay the duty themselves,” he added.
According to the Irish Bookmakers Association (IBA ), a number of Westmeath bookmakers will be forced to close following the “irrational and disastrous” decision to double the rate of betting duty.
“This move will immediately force the closure of sole trader bookmakers and make it extremely difficult for small companies to survive,” according to an IBA statement released yesterday.
The IBA believes the move penalises small independent businesses to the benefit of online and telephone gambling, which they say are operated through offshore companies which make no contribution to the State.
“Betting duty is unique in Ireland as the only double taxation levied on any business in any sector. It is paid directly by bookmakers on the basis of gross turnover, and is payable even if the business suffers a loss. Any profits made by the business are then further subject to tax in the normal manner, with sole traders paying at the appropriate PAYE rate. Bookmakers are not permitted to claim the taxation as a deductible business expense. The tax is paid directly by bookmakers and not passed on to consumers.”
IBA chairperson, Sharon Byrne, added, “The IBA is fully committed to the national economy and the support of the Horse and Greyhound Racing Fund, but increasing an already unfair tax which will drive small operators out of business is not the way to achieve these objectives. We have proposed a number of measures including the capture of online gambling revenues and the introduction of modern technologies to allow independent bookmakers to compete on a level playing field.”
The IBA is calling on the Minister for Finance to reverse the decision, and is seeking an urgent meeting with the Minister to discuss the matter.
