Over the course of the past number of years various sources have raised the issue of the tax on betting (gambling) in Ireland. This year it was reported that on-line gambling in Ireland would incur a similar tax to bets that take place within a bookmakers.
Currently, bookmakers in Ireland 'cover' the cost of the 1% tax so that punters are not forced to hand over the tax along with their stake. Previous taxes of 3% and 5% were not covered by the bookies so punters will more than likely pay if this tax is increased.
What impact might tax changes likely have?
A 2015 paper by Philip Newall from the University of Sterling called How Bookies Make Your Money suggests that bookmakers herd geographically in less-affluent areas. Their increased presence in less-affluent areas is supported by the work of Ramesh (2014) and Reed (2014). There is a logic behind this which is supported by anecdotal evidence if one ever decides to visit a bookmakers.
Of course, it can be argued, that taxation of this product is designed to reduce or prevent people from gambling. Sadly, the evidence of increased taxation on products such as cigarettes demonstrates does little to deter consumption.
How much might this cost the average punter? Let’s try three scenarios where the tax is raised by 2%.
- Weekly stake of €70: The Casual Punter. A daily allowance of €10 per day. The total tax paid over the course of the year is. €109.20.
- Weekly stake of €175: The Seasoned Gambler. A daily allowance of €25. Total tax liability of €273
- Weekly stake of €350: The Serious Punter. A daily stake of €50 equates to a tax bill €546.
A return to the 5% tax would see the three named punters pay annual tax charges of €182, €455 and €910.