Bookmakers in Ireland are braced for tough times ahead with the Irish government’s decision to double betting tax expected to compound poor results for many companies in the industry.
The tax hike was announced by Finance Minister Brian Lenihan in the budget last month, doubling the existing rate from 1% to 2% - a move which could affect Ireland’s prominent gambling industry heavily. The new rate will come into force on January 1, 2009, with many warning that there will be a significant impact on the sector's revenues, and resulting job losses.
Paddy Power, a major Ireland-based bookmaker, which released its interim results on Friday, announced that it anticipates a drop of EUR9-10m in operating profits for 2009. The bookmaker also reported a decline of EUR5m in this year's operating profits due to recent falls in the value of sterling. The bookmaker insisted that its financial stability was not at risk despite the announcement, boasting EUR72m available liquidity with no debts. Other independent bookmakers however, may not be so well placed to withstand the effects of the increased tax.
Bookmakers nationwide have disclosed that they expect profit margins to narrow and questions may be raised about the viability of operating from Ireland. The global financial crisis has also hit the sector, with both UK and Irish bookmakers reporting on average 9% less turnover.
Paddy Power's English counterpart Ladbrokes has managed 12% growth this year in a difficult economic climate, but Ladbrokes, along with other UK based bookmakers, fear similar changes in the UK. There has been much speculation within the UK gambling industry as to whether Chancellor Darling will announce an increased betting tax in his pre-budget report later this month.
.
Network Tweets Archive
| Resources | Partners
| Site Map | Links
| Newsletter
Archive | Contact
| RSS Feeds
About | Syndication |
Advertising & Marketing |
Recruitment |
Terms & Conditions |
Privacy
Copyright © 2012 - All Rights Reserved - Tax-News.com
All content provided by BSI Media
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment