The government of Ireland is working on legislation to tax online gambling bets placed in the Emerald Isle. It is an attempt to recoup revenue that is currently going overseas. Michael Noonan, the Minister for Finance, says that work is ongoing on the legislation, but is hopeful that something will be completed this year.
The hardest part is figuring out how to capture that revenue. When Irish citizens wager at online casinos, sports books and poker rooms that are located overseas, the transactions are processed overseas under the jurisdiction of a foreign government, out of the authority of Ireland. Taxing those transactions would be difficult for Ireland.
One way Noonan plans to bring in revenue from transactions with foreign companies is through licensing. The legislation being crafted would require any online gambling website to obtain a license from Ireland if they are going to accept bets from Irish customers. In addition, the companies would have to pay a duty on any bets placed by Irish citizens. The amount of duty is not yet known. A lowering of local betting duties from 2% to 1% is partially blamed for gambling revenue in Ireland dropping from €54 million in 2007 to €30 million in 2010.
Every country faces the same problem as Ireland. Due to the borderless nature of the Internet, people can gamble online at a website located anywhere in the world. If the website is located in the country, that government can tax the transaction, but that is difficult to do if the company is located overseas. Noonan is hopeful that the legislation will make major strides toward correcting that problem.