Ireland's Gambling Tax Debate: The Push for Higher Betting Duty and Industry Backlash

By jili tutorial · September 19, 2026

Ireland’s Gambling Tax Debate: The Push for Higher Betting Duty and Industry Backlash

A New Frontier in European Gambling Taxation

Ireland stands at a critical crossroads in its gambling policy. As the government looks to fund ambitious public spending plans, the betting industry has become an unexpected target for additional revenue. Reports suggest that Dublin is considering raising the existing 2% betting duty—a move that would align Ireland with a growing number of European nations that are increasingly viewing gambling taxes as a convenient source of state income.

This isn’t happening in a vacuum. Across the continent, from the UK to the Netherlands and even as far as Brazil, governments are wrestling with the same fundamental question: how much can you tax gambling before you push bettors toward unregulated, tax-free alternatives? Ireland’s decision could set a precedent for how smaller European markets approach this delicate balance.

The Current State of Irish Betting Taxes

Understanding the Existing Duty Structure

Before diving into the proposed changes, it’s essential to understand how Ireland currently taxes its betting industry:

Standard betting duty: 2% on the amount staked (turnover), not on profits. This crucial distinction means operators are taxed on the total money wagered, regardless of their actual earnings from those bets.
Pool betting duty: 1%—set to rise to 2% in the 2027 budget. This applies to bets where the total prize pool is shared among winners, such as certain types of lotteries or football pools.
Coverage: The duty applies to both online and physical (retail) betting operations.

Unlike some other countries that tax profits, Ireland’s turnover-based system is often criticized by industry insiders as disproportionately punitive. A bookmaker with a 5% profit margin (which is considered good) is effectively paying 40% of their profit in tax before any other operating costs.

The Government’s Fiscal Motivation

Ireland’s public spending plans are ambitious, to say the least. The government has earmarked €7 billion for public services and infrastructure, alongside €1.5 billion in tax reductions. Like governments everywhere, they’re looking under every couch cushion for revenue. Betting tax increases are attractive because:

They’re politically expedient – Gambling companies aren’t a sympathetic constituency among voters
They’re relatively easy to collect – Compared to complex corporate taxes, betting duties are straightforward
They’re non-inflationary – Unlike printing more money or broad-based tax hikes

The question isn’t whether the government needs the money—it clearly does. The real question is whether taxing betting at higher rates actually generates the intended revenue or simply drives activity underground.

The Industry Pushback: A Recurring Symphony

The Black Market Argument

The industry’s primary defense against increased taxation is the threat of a black market surge. Anthony Kaminskas, founder of Dublin-headquartered AK BETS, has been vocal about this concern on LinkedIn. His assessment is stark: raising the tax leaves regulated operators with three unappealing options:

Drop sports betting entirely – focusing only on casino products where margins are higher
Cut odds dramatically – making regulated prices so uncompetitive that bettors will seek better deals elsewhere
Pass the tax directly to customers – making a €100 bet cost €105, which is essentially a 5% surcharge

All three options, Kaminskas argues, result in one of two outcomes: either regulated operators lose their sports betting business to unlicensed competitors, or the industry becomes so uncompetitive that black market operators clean up regardless.

His prediction is blunt: “Black market is going to capture a large double digit figure of market share soon in Ireland.” He points to the UK as a cautionary tale, where recent tax increases have coincided with a measurable uptick in unlicensed activity.

The Irish Bookmakers Association Weighs In

The Irish Bookmakers Association (IBA) echoes these warnings with more formally structured arguments. Their submission to Finance Minister Simon Harris lays out the problem in stark terms:

“Every euro of additional cost on a licensed operator has to be recovered somewhere, usually through reduced odds and reduced value for customers.”

But here’s the key comparison they want the government to understand:

“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.”

In other words, every tax increase on regulated operators is a competitive advantage handed to the very criminals the government claims to want to combat.

The IBA also cites concrete numbers: when betting duty doubled from 1% to 2% back in 2019, Ireland lost approximately 222 betting shops and an estimated 1,000 retail jobs. While some of this decline can be attributed to the broader shift toward online betting, the IBA maintains that tax policy accelerated the trend unnecessarily.

The Historical Context: 2019’s Doubling Act

To fully appreciate the current debate, we need to look back at the last major increase. When Ireland doubled its betting duty from 1% to 2% in 2019, the industry warned of dire consequences. Some of those predictions came true:

Betting shop closures accelerated – The rate of closures jumped noticeably after 2019
Employment in the sector declined – Particularly in retail-adjacent roles
Online migration intensified – While this was already happening, the tax change may have speeded the transition

However, it’s fair to note that correlation isn’t causation. The global pandemic and the massive shift to online gambling in 2020-21 complicated the picture significantly. The IBA’s attempt to attribute these losses solely to taxation doesn’t tell the whole story, but it doesn’t make their concerns less valid either.

A Dissenting Voice: Stewart Kenny’s Controversial Stand

Not everyone in Ireland’s gambling industry opposes higher taxes. Stewart Kenny, co-founder of Paddy Power (now part of Flutter Entertainment, Ireland’s largest betting company by online traffic and the UK’s fourth largest), is calling for something far more radical: a 40% tax on online betting and casino revenue.

Kenny’s position, reported by The Irish Times, is a significant break from industry orthodoxy. His reasoning appears to be that:

High taxes are inevitable – Governments will keep raising taxes regardless, so the industry should get ahead of the curve
A well-regulated market with higher taxes is better than an unregulated black market with no taxes
Consumer protection costs money – The new regulatory framework under the GRAI will require funding, and the industry should expect to foot the bill

However, it’s important to note that Kenny is arguing for a profit-based tax (like the UK’s 21% on gross gaming yield) rather than a turnover-based tax like the current 2% on stakes. This is a crucial distinction—the two approaches tax wildly different amounts, with turnover taxes being far more punitive to operators with low margins.

A New Regulatory Era: The Gambling Regulatory Authority of Ireland (GRAI)

The tax debate doesn’t exist in isolation. Ireland’s gambling market is undergoing a fundamental transformation with the establishment of the GRAI, created under the Gambling Regulation Act 2024.

What the GRAI Means for the Industry

The new regulator brings sweeping changes:

Comprehensive oversight – The GRAI has authority over both online and land-based gambling, replacing a fragmented system where the Department of Justice and the Gardaí (police) shared responsibilities
New licensing requirements – Operators must meet stricter standards for social responsibility, player protection, and anti-money laundering controls
Enforcement powers – The GRAI can fine operators, suspend licenses, and even prosecute individuals for serious breaches
Compliance costs – These don’t come cheap. Operators will need to invest heavily in compliance infrastructure, staff training, and reporting systems

For lawmakers, the GRAI represents a “stick” approach to regulation. The new tax proposals, if implemented, would be the “carrot and stick” combined—forcing both contribution and compliance on an industry facing unprecedented scrutiny.

The Cost of Compliance

Here’s what gets less media attention: compliance with new regulations is expensive. Operators are already budgeting for:

KYC (Know Your Customer) protocols – Verifying every customer’s identity and financial history
Responsible gambling measures – Including self-exclusion tools, deposit limits, and mandatory affordability checks
Audit and reporting requirements – Filing regular returns to the regulator
Staff training – Ensuring every employee understands their obligations under the law

Industry analysts estimate these costs could eat up an additional 2-3% of gross gaming revenue. Add a tax increase on top of that, and you’re asking operators to absorb a 4-5% hit in a market that’s already shrinking due to competition from unlicensed operators.

The European Context: A Continent-Wide Trend

Ireland’s situation doesn’t exist in a vacuum. Across Europe, governments are discovering the easy money in gambling taxes:

The United Kingdom: The Cautionary Tale

The UK has traditionally been the biggest European market for gambling. Their experience with tax increases has been particularly instructive:

In April 2019, the UK reduced the maximum stake on fixed-odds betting terminals (FOBT) from £100 to £2, effectively killing a massive revenue stream for high-street bookmakers
Betting duty was also increased that year, and parking lot-size changes have forced major operators to consolidate
The result? A significant uptick in “betting exchanges” that exploit regulatory loopholes, and a notable migration of customers to offshore sites

The UK government’s own statistics show a correlation between tax increases and declining participation in regulated betting. While not all of this migration is illegal, it does suggest that customers have price sensitivity when it comes to betting costs.

The Netherlands and the Regulated Market Effect

The Dutch market offers a slightly different lesson. When they opened up their regulated market in 2021, they opted for a relatively high tax rate on online gambling. While their policy has been credited with curbing illegal activity, it’s also led to:

Higher prices for consumers who do gamble legally
Less choice in terms of available products
A concentration of market share among large, well-capitalized operators

The Brazilian Model: Emerging Markets Decide Differently

Brazil’s approach to gambling regulation is often cited as a template for emerging markets. They’ve opted for a licensing fee plus a low tax rate, specifically to attract legal operators and undercut the massive black market that already exists. While Brazil is a very different market from Ireland, the principle remains the same: taxation levels determine whether legal operators can compete with illegal ones.

The Numbers Game: Can Higher Taxes Actually Generate Revenue?

The government’s core argument for increasing betting duty is straightforward: more tax revenue to fund public services. But the math isn’t as simple as multiplying the rate by existing stakes. Here’s why:

The Laffer Curve for Gambling Taxes

Economists often cite the “Laffer Curve” – the concept that there’s an optimal tax rate beyond which higher rates actually reduce total revenue. Gambling taxes are particularly susceptible to this because:

Price elasticity – As taxes increase, operators raise prices (reduce odds), which causes some bettors to reduce their activity
Substitution effect – Some bettors will choose black market alternatives that offer better prices
Income effects – Individual bettors have fixed entertainment budgets; if the cost per bet increases, they may simply bet less

Based on research from other European markets:

The UK’s increase in remote gaming duty from 15% to 21% on profit didn’t generate the expected windfall
Australia’s various state taxes have resulted in significant industry contraction without proportional revenue increases
France’s high taxes (up to 57% on some products) have been linked to massive black market growth

What the Government Is Really Projecting

The Irish government’s own projections for increased betting duty revenue likely assume relatively inelastic demand. They’re betting that:

The majority of bettors will continue using licensed operators
Any decline in betting volume will be more than offset by higher tax rates
The regulatory crackdown will reduce black market alternatives

But these assumptions are questionable. The black market in Ireland is already growing, and stricter regulations combined with higher taxes could accelerate this trend.

The Path Forward: Middle Ground or Meltdown?

As the Irish government deliberates on Budget 2027, the industry is hoping for a less confrontational approach. Several alternatives to a straightforward duty increase have been proposed:

1. Switching to a Profit-Based Tax

Instead of taxing turnover, some lobbyists suggest switching to a tax on gross gaming yield (GGR) – which would tax profits rather than total bets placed. This would:

More accurately reflect ability to pay
Encourage operators to grow their businesses rather than discourage growth
Align Ireland with the UK and several other European nations

2. Targeted Surcharges for Problem Gambling

Rather than a blanket tax increase, the government could introduce a dedicated “safe gambling levy” – specifically earmarked for funding addiction services and the GRAI’s enforcement costs. This approach has precedent in countries like the UK, where the industry pays into the GambleAware charity.

3. Phased Implementation

If the government insists on increasing the duty, operating a phased approach—say, increasing by 0.5% per year over four years—would give operators time to adapt and minimize the risk of market disruption.

What Happens Next?

The betting tax debate in Ireland is unlikely to be resolved quickly. Several factors will shape the outcome:

The Political Calculus

Higher betting taxes are popular with the public, who often view it as a “sin tax” on something they don’t personally engage with. This makes it politically difficult for the government to back down from proposals that are already being reported as likely.

The Black Market Realities

If the industry’s warnings are accurate—and there’s significant evidence from other markets to support their claims—the actual revenue generated from increased taxes might fall far short of projections. Governments generally dislike being seen to implement a policy that fails to meet its targets.

The GRAI’s Impact

The new regulator was established to clean up the industry. If the GRAI is effective at cracking down on illegal operators, the black market may shrink anyway, making the industry’s worst predictions less likely to materialize. Conversely, if the GRAI proves toothless, higher taxes will only drive more business toward unlicensed sites.

Key Takeaways

For the Regulated Industry

Immediate relief is unlikely – The government is determined to increase gambling tax revenue
Adaptation is possible – Operators who differentiate themselves through superior product, better odds, or unique features will survive even moderate tax increases
The black market threat is real – But it’s not new. Operators have used this argument for decades, and while it has merit, it doesn’t always reflect reality

For Regulators and Policymakers

Taxation and regulation are two sides of the same coin – You can’t have a well-regulated industry that isn’t also economically viable
Consumer protection is the ultimate goal – Any tax policy that drives bettors to unlicensed sites actively undermines the purpose of regulation
International coordination matters – If Ireland raises taxes too high, it simply encourages regulatory arbitrage within the European Union

For the Bettor

Expect some disruption – If tax increases go ahead, odds will likely shorten, promotions may become less generous, and some operators may exit the market entirely
Protect yourself – Only ever use licensed operators. While black market sites may offer better prices, they offer zero safety net if something goes wrong
Engage with the consultation – If you believe strongly in one side or the other, the government’s budget consultation process is your chance to have your say

The Bottom Line

The debate over Ireland’s betting tax is far from unique. It’s the latest chapter in a long-running story about how governments balance the need for revenue with the realities of market economics. The outcome will depend on the government’s willingness to listen to industry concerns, the industry’s ability to adapt to a changing environment, and ultimately, where Irish bettors choose to place their money.

One thing is certain: the days of Ireland being a soft-touch for gambling operators are over. The real question is whether the government’s new regulatory and fiscal regime will create a sustainable, responsible industry or drive it further into the shadows. For now, all eyes are on Dublin and the decisions that will shape the market for years to come.