The Irish government has been forced to announce an increased delay on its impending online gambling tax. At present, it appears that operators serving the Irish market will not be subject to the new tax until first months of 2015 at the earliest.

This plan to implement the tax can be traced back as far as 2011, when the government sought to apply the 1% tax on betting shop wagers to those also placed at the websites of online gambling operators. The tax will only be applied to Irish-based punters who make the bets.

Malta is Questioning Tax

To get to this point, the new tax legislation has been delayed on a number of occasions. The current delay has been the result of questioning from Malta, who also managed to delay the launch of similar legislation in the UK, and which came into law on 1 November 2014.

Like in the situation with the UK, Malta is attempting to block the legislation because a number of Irish-serving online gambling operators are licensed under its jurisdiction. Consequently, this raises the potential issue of operators ceasing to pay Malta for licensing because they are now licensed in multiple jurisdictions. As of mid-December, the expectation is for the standstill to continue through January.

Irish Frustration

Irish finance minister Michael Noonan has spoken of his frustration at the delays and has promised "to progress all remaining stages of the Bill through the [parliament]" once the standstill has ben ended. Yet, the tax could still take months to become law, as there will be time required to pass the bill through parliament.

Irish operator Paddy Power has stated that the tax increase would have cost its organisation €7 million in profit in 2013. However, the upcoming 1% rate is far below the 15% rate that is now applied to UK online gambling operations.

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