From 1 August 2015, the Betting (Amendment) Act 2015 (the “Act”) made significant changes to the Irish licensing and tax regime for online bookmakers and operators of online betting exchanges. The changes will impact all online bookmakers and betting exchanges with Irish customers regardless of whether or not they have a physical presence in Ireland.

Changes for online bookmakers

The key changes for online bookmakers are:

(i) A new requirement to hold a licence

Previously only bookmakers with a physical presence in Ireland were required to hold a licence. From 1 August 2015, all bookmakers carrying on business in Ireland by remote means (eg, over the telephone, internet, etc) are required to hold a remote bookmaker’s licence issued by the National Excise Licence Office, whether or not they have a physical presence in Ireland. Bookmakers wishing to obtain a licence must first apply for a certificate of personal fitness from the Irish Department of Justice and Equality and register with the Irish Revenue Commissioners.

A licence duty of €10,000 is payable on issue of the remote bookmaker’s licence. Licence duty is payable on renewal of the licence every second year. On renewal, the duty payable is determined by reference to the bookmaker’s annual Irish turnover and is capped at €200,000.

Failure to obtain a licence is a criminal offence and prosecution on indictment may lead to substantial fines and / or a prison sentence for company officers.

(ii) Extension of Irish betting duty to include online bookmakers

In addition to the payment of licence duty, all ‘remote’ bookmakers holding a licence will be obliged to pay 1% betting duty on the value of bets entered into with Irish customers (whether over the telephone, internet, etc). The duty will be payable quarterly.

Changes for online betting exchanges

The key changes for betting exchanges (and others who facilitate the placing of bets) are similar and include:

(i) A new requirement to hold a licence

All betting intermediaries carrying on business in Ireland by remote means (eg, over the telephone, internet, etc) are required to hold a licence from 1 August 2015, regardless of whether or not they have a physical presence in Ireland. The process for obtaining a remote betting intermediary’s licence is broadly similar to the application for a remote bookmaker’s licence.

A licence duty of €10,000 also applies on issue of the licence. Similarly on renewal of the licence (every second year), the licence holder must pay a licence duty determined by reference to annual commission charged to Irish customers. The duty payable on renewal of the licence is capped at €200,000.

(ii) Extension of Irish betting duty to include online betting exchanges

All ‘remote’ betting intermediaries holding a licence will be required to pay 15% betting duty on commissions earned from bets placed by Irish customers and facilitated by the intermediary (whether by telephone, online, etc).

EU law considerations

In the UK, betting duty is similarly imposed on remote operators. Imposition of the duty has recently been challenged in the UK under EU law on the basis that the imposition of a tax at the point of consumption restricts the freedom to provide services within the EU. The English High Court has referred the question to the Court of Justice of the European Union for consideration. The outcome of the case will also be of interest to online operators liable to the Irish betting duty.