Ireland Considers Betting Tax Hike: Industry Warns of Black Market Surge

A significant political battle is brewing in Dublin over the taxation of sports betting. The Irish government is currently drafting the 2027 budget, seeking ways to finance planned public spending of approximately €7 billion and tax reductions totaling €1.5 billion. A central pillar of these considerations is an increase in the betting duty, which currently stands at 2% on stakes placed by customers. While the duty is presently paid by the operators, the industry is sounding a loud alarm, fearing that further burdens will make legal businesses internationally uncompetitive compared to unregulated providers.

This discussion hits the industry during a period of transformation. With the Gambling Regulation Act 2024, the legal framework was only recently modernized, and the new Gambling Regulatory Authority of Ireland (GRAI) was established. The fact that fiscal pressure is being applied immediately after this regulatory overhaul is causing resentment. Concerns about the retail sector are particularly prominent, as Ireland has already had painful experiences with tax increases in the past. The Irish betting industry feels like the nation's cash cow, while illegal online platforms operate without any tax burden.

Numbers and facts

Currently, bookmakers in Ireland pay a 2% duty on turnover. For pool betting, the rate is currently 1%, but plans for the 2027 budget suggest an alignment to 2%. The Irish Bookmakers Association (IBA) points out that the last doubling of the tax from 1% to 2% in 2019 had dramatic consequences. According to the IBA, these measures led to the closure of 222 betting shops and the loss of roughly 1,000 retail jobs. While critics note that the general trend toward online gambling might have played a role, industry representatives see the tax burden as the primary driver of retail decline.

Market projections show what is at stake financially. The total Irish gambling market is expected to reach €1.24 billion by the end of 2025. The online segment is growing steadily and is projected to increase to an estimated €1.35 billion by 2029. Anthony Kaminskas, founder of Dublin-based bookmaker AK BETS, warns urgently of the consequences of an increase. He emphasizes that licensed operators would only have three options: removing sports betting products entirely to focus on casino games, offering "awful prices," or charging customers a direct tax on their bets, such as a €100 bet costing the customer €105.

Background

However, resistance to the plans is not unanimous. Interestingly, there are voices within the industry calling for even more drastic measures. Stewart Kenny, co-founder of Paddy Power (now part of Flutter Entertainment), called for a 40% tax on Gross Gaming Revenue (GGR) for online betting and casinos in The Irish Times. This stands in stark contrast to the demands of the IBA and smaller operators, who warn of a market collapse. The government justifies the considerations by stating that the revenue is intended, among other things, to reduce VAT in the hospitality sector to shield it from the impact of rising minimum wages.

"Every euro of additional cost on a licensed operator has to be recovered somewhere, usually through reduced odds and reduced value for customers. Unlicensed operators recover nothing, because they pay no duty, no levy and no compliance cost, and they offer none of the consumer protections that licensed operators are required to provide." - Representative of the Irish Bookmakers Association (IBA), in a submission to Finance Minister Simon Harris.

The debate in Ireland is not an isolated case. Similar discussions are taking place in the Netherlands, Brazil, and the UK. Everywhere, the question arises of how much tax burden a regulated market can withstand before players are driven into the arms of illegal providers who do not implement any protection measures like deposit limits or identity checks. The new Irish authority GRAI is also set to introduce a Social Impact Levy to fund gambling harm prevention programs, further increasing the financial weight on legal companies.

Why it matters for German players

For German players, the situation in Ireland serves as a cautionary tale of regulated market dynamics. In Germany, the State Treaty on Gambling 2021 (GlüStV 2021) is the governing framework. Similar to Ireland, taxes are levied on stakes in Germany, which has already led many providers to adjust their odds or cease offering certain betting markets altogether. German customers playing with operators on the GGL whitelist enjoy high security through the LUGAS system and the cross-operator deposit limit of €1,000 per month but often have to accept lower payout ratios than on the black market. A tax increase in Ireland could serve as a blueprint for other EU states, potentially putting long-term pressure on odds across Europe.

What it means for GGL-licensed casinos

German casinos with a GGL license are closely monitoring such developments, as they already operate under strict requirements like the €1 limit per spin on slots. Any further fiscal burden in neighboring European markets increases the risk that new levies will also be considered in Germany to plug budget holes. For legal providers, this means a constant battle for channeling: they must remain attractive enough so that players do not migrate to MGA or Curacao providers who do not adhere to German tax laws. The Irish experience shows that tax increases can immediately restrict the diversity of the legal market by forcing smaller operators to quit.