Online Poker Escapes Taxation in Ireland

Like so many other European nations before them, Ireland has been looking to better regulate their online gambling marketplace. In most cases, this means not only greater protections for consumers, but also valuable tax revenue for the governments involved.

Sure enough, Ireland’s Betting Bill 2012 adds a 1% tax on any company operating certain online gambling products. That includes online sports books and betting exchanges – but doesn’t seem to apply to online casinos or poker rooms.

“This bill will bring into place a fair an equitable licensing and regulatory regime for all bookmakers and betting intermediaries,” said Minister Michael Noonan. “This bill, once enacted, will allow for the extension of betting duty to remote bookmakers and will ensure that all bookmakers activities offered in the State are taxed equally.”

At issue before the bill was passed was the idea that Irish bookmakers faced a competitive disadvantage in their own country. While this tax was already levied against them, foreign bookmakers who offered online betting weren’t taxed at all.

The bill will also bring greater regulation to the online bookmaking industry in Ireland. Any foreign company that does any online business with Irish customers or any Irish bookmaker that does a substantial portion of their business online will have to receive a remote bookmaker’s license (betting exchanges will need a remote betting intermediary’s license, and will pay a 15% tax on their commissions), which will cost €5,000 to obtain or renew. The new laws are expected to comply with European Commission regulations, and will likely go into effect in 2013.

The absence of online poker from these regulations represents a hands-off approach that is becoming increasingly uncommon in Europe. For instance, the United Kingdom is expected to propose a 15% point of consumption tax on all online gambling – including online poker – by the end of 2014.

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