Paddy Power Betfair’s shares have fallen after the Irish government announced plans to double betting taxes.
Finance minister Paschal Donohoe revealed this week that betting duties will double from 1% to 2% from next year for both real and online bets. Donohoe also announced plans to increase the betting duty on gambling exchanges, increasing it from 15% to 25%.
Shortly after the announcement, Irish gambling leaders insisted that the tax increase would “kill” the industry and it seems they’re right.
Paddy Power Betfair, the largest betting operator in Ireland, estimated that the new tax would increase the company’s annual betting duties by £20 million and the firm’s shares dropped 5% soon after.
The Irish Bookmakers Association (IBA) stated that Donohoe had just “signed P45s for over 1,500 jobs in the independent bookmaking sector”.
IBA Chairman Sharon Byrne claimed the tax hike would result in the loss of around 1,500 jobs. In an interview with The Irish Independent, Byrne said:
“Already since the budget measures were announced, I have spoken to a number of small independent bookmakers, some of whom have been in business for more than 40 years, who not believe they have no option but to let their staff go and close their doors.”
The betting tax increases will come into effect from January 1, 2019. It’s thought that the taxes will generate an additional €40 million in 2019 which will be used to fun addiction services.
The news comes after Paddy Power Betfair’s Australian brand Sportsbet suffered changes to consumption tax.
Meanwhile, GVC, the owner of Coral and Ladbrokes, and William Hill will be left unscathed due to their smaller footprint in Ireland.
In fact, GVC owner Kenny Alexander backed a ban on gambling television advertising before the 9 pm watershed period. In an interview with City A.M., Alexander stated that the number of ads appearing during football games got “out of hand”.