Well, I’m back from Edinburgh which was a brilliant break for my brother's stag, including an archery session! (see pic).
It's back to reality now but I’m looking forward to trading again this week. But for how long will trading remain tax free in Ireland?
I was discussing this on some forums and it seems that An Taoiseach Brian Cowen is set to add a betting tax (which will include off-short operators) in December's budget – the figure discussed is in the region of five percent. What this will mean for Betfair is unclear but if you’ve to pay 5% on each back and lay (rather than on the trade itself) that will make the spread very big, considering Betfair take up to 5% commission too.
I remember the days when we were paying nearly 10pc tax on bets in the bookies and it was near impossible to make betting pay. I know the sport needs to be funded but some sort of net tax on winnings would be preferable to me as a trader as it could become very difficult to beat the spread if they take 5% immediately after you back or lay.
If they only taxed bets on Irish racing, that would be fine as I trade mainly on UK stuff but I doubt it. Also, the UK Government are also looking at ways to raise revenue from the sport so I wonder just how long they will leave the exchanges alone for.
I’ll watch this one with interest and I just hope that there aren’t too many changes.
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how exactly could the government enforce it anyway? Very few firms actually hold Irish licences, they're quite happy to operate from Gibraltar, Malta or anywhere else within the EU, so what benefit does the government plan to withhold or penalise them with if they don't comply? Betfair's business from Ireland already goes through Malta, and with the likes of Punchestown refusing their sponsorship on petty political grounds, then I could easily see them waving goodbye to an office in Ireland.
ReplyDeleteNot exactly sure how they could enforce it to be honest Scott – but they seem intent on doing something according to the Taoiseach last week:
ReplyDelete“We have a plan... finding a legal mechanism (to tax offshore betting) that will withstand legal challenge is not an easy task. We have, I know from discussions we have had internally within the departments, a way forward on that and we will give legislative expression to this in the months ahead”
It’s not just Betfair of course, it’s all the off-shore bookmakers too so it’s going to prove difficult to put into law without being too draconian.
The funding of horseracing in Ireland comes from a betting levy which is currently only paid for by the bookie shops – and the government make up the surplus. This was fine up until five years ago when the levy earned enough on its own. But with turnover in the shops way down, the government has had to foot the rest of the bill. With the state of the economy, it can’t last forever.
Really not sure how it will work in the future but I sure as hell don’t want to go back to the bad old days of paying nearly 10% on every bet!