Irish Gambling Tax

Disclaimer: The information provided in this article is for educational purposes only and does not constitute professional financial, tax, or legal advice. We are not tax professionals or accountants. Gambling taxation laws can be complex and subject to change, particularly for professional gamblers or those with significant gambling winnings. If you have questions about gambling tax compliance in Ireland or your specific situation, we strongly recommend consulting a qualified accountant or tax advisor. Always ensure that you are aware of and adhere to applicable laws and regulations.

Most people don’t need to worry about gambling taxes in Ireland. You don’t pay tax on your winnings. Well, in most cases. You don’t need to report your winnings in most cases. You pay a flat 2% duty when you place your bet, and that’s that.

In this article, we’ll discuss the idea of gambling tax in Ireland and what it is meant to accomplish. However, rarely will the vast majority of gamblers need to worry about anything here unless they’re running a bookmaker/online casino or betting at an exchange. Still, it is worth reading every page to get a proper insight into the laws regarding betting taxation in Ireland, as this may help some people maximise their winnings.

What You Need to Know About Gambling Taxes in Ireland

It doesn’t matter whether you’re gambling at Irish casinos online, or a bookmaker. There is one thing you need to know — there is a 2% betting duty on wagers. This is paid at the time you place your bet. You do not need to worry about that. The bookmaker or online casino will pay the government for this.

It is also worth noting that this is not the only tax paid by the gambling provider. They will be taxed as any other business — 12% of profits. Again, this is not something that you need to worry about unless you’re running a legal gambling operation.

There is one exception to this rule, though. Gambling through a betting exchange is subject to a 15% duty on the commission earned through the exchange. This is paid at the point of the transaction.

Understanding Capital Gains Tax

Gambling profits are exempt from Capital Gains Tax (CGT), and as we said at the start, it is highly unlikely that you will pay any tax on your winnings. However, there are exemptions to this rule. There is a chance that you might have to pay tax on some profits made from gambling. That is only if it is determined that you’re a professional gambler, i.e., the bulk of your income comes from gambling. For example, a professional poker player might need to pay tax on their earnings as if it were a job. This area is incredibly grey. There is no guidance about when a person starts to become a professional gambler, so if you have sizable earnings from gambling, talk to an accountant. They can provide guidance.

You should also remember that gambling losses are not tax deductible. So, if you make a loss in gambling, you can’t take it from your taxes at the end of the year. Well, unless you are classed as gambling professionally, that is out of the scope of this guide. You do need to talk to an experienced accountant about that.

Finally, any company offering remote gambling services to residents of Ireland (i.e. online casinos and bookies) should also be paying the betting duty to the Irish government. Unfortunately, not all of them do. This is why you must gamble at reputable websites.

Evolution of Gambling Tax Laws in Ireland

With a 2% duty, gambling tax in Ireland is at one of the lowest points it has ever been (although it has been as low as 1%, at times). It doesn’t look like the government is planning to raise the duty soon, either. The 2% seems to be the sweet spot.

There have been a few milestones in gambling tax history in Ireland:

• The Betting Act of 1931 provided the framework for taxing gambling providers in Ireland. It also stipulated that a tax must be paid upon the granting of a licence to gambling providers. Online gambling did not exist at this point.
• The Gaming and Lottery Act of 1956 further extended what was classed as gambling in Ireland, including more information about gaining a licence. While taxation was not specifically mentioned in the act, it does state that a duty is paid upon the granting of a licence. Again, much of the modern legislation builds upon this.
• Betting Amendment Act (2015) brought online gambling into the tax system. The act originally set the duty at 1%, but it is now 2%. This act also stated that a duty of 15% is due on all commissions at betting exchanges (instead of the 2%). This was the first time that online gambling providers, particularly those out of the country, were starting to be taxed properly for the services they provided. Now, anybody offering services to Irish residents cannot avoid tax. They will be tried in absentia if they do.
• Gaming and Lotteries Act (2019) really regulated lotteries a little, excluding some lotteries designed for charitable purposes from paying duty. It also simplified the definition of legal gambling and indicated that overseas gambling companies may not need to be licensed in Ireland but should pay tax.

Key Features of Ireland’s Gambling Tax System

Ireland’s gambling tax system gets a lot of praise from people. There are a few reasons for this:

• The 2% tax rate is very low. Other gambling jurisdictions have higher tax rates on gambling, which can cut into any money earned, particularly through sports betting. It is easier to make a ‘profit’ through gambling in Ireland.
• The system is very simple. The vast majority of gamblers don’t need to worry about taxes. They just know that it is being paid when they make their bet. They don’t need to worry about their profits and losses, meaning that less record-keeping is needed. The ease of the taxation system means that most people can jump into gambling with very few issues. This is not the case in all gambling jurisdictions, with many places charging everybody tax on their gambling winnings, which becomes quite a mess if you’re a sporadic gambler. That being said, we do still encourage Irish gamblers to keep detailed records of their transactions, just in case.
• The system does take into account professional gamblers. The Irish system does not allow people to skip their tax obligations by becoming professional gamblers. If needed, the Irish system can ensure that professional gamblers pay their fair share of tax while not putting an unreasonable burden on the casual gambler.

Online Gambling and Remote Betting Taxes

Up until the 2015 Betting Amendment Act, there was nothing in the law that extended betting duty to online operators. This changed.

When the 2015 Betting Amendment Act came into force, any online casino, remote operator, etc., offering gambling services to residents of Ireland needed to pay a 1% duty on turnover (i.e., 1% on each bet placed). This has now gone up to 2% duty. There were no exemptions to this. It applied to all betting establishments offering services in Ireland. Legally, these companies needed to be licensed, too, but, as you know, there is nothing that says that Irish people can’t gamble at unlicensed betting sites other than the fact they lose a good number of their protections.

Irish citizens do not need to report online winnings from gambling to Revenue, with this act placing the onus of tax on the gambling establishment. Still, as we’ve mentioned before, this is not the case for professional gamblers or those winning sizable sums of cash. Professional gamblers need to pay tax on their earnings, and those winning sizable sums of money from gambling need to prove that the cash comes from gambling so they do not pay tax. So, we highly recommend that everybody keeps a detailed record of how much they’ve earned from gambling, just in case Revenue starts to ask questions. Generally speaking, there is no need to declare anything that you’ve earned from gambling.

Why Gambling is Taxed in Ireland

Governments need tax income to fund all the initiatives we’ve come to expect from the government, e.g, healthcare, road care, etc. So, the Irish government does benefit from gambling tax income in a variety of ways. However, there are other reasons why gambling income is taxed.

For starters, a gambling tax is meant to discourage people from excessively gambling. One would argue that since the gambling duty is a rather paltry 2%, it is probably not going to have a major impact. On the other hand, a lower 2% does encourage the industry to thrive, and the government will get some cash from the profits the gambling companies make.

A lot of cash made from the gambling industry will also be funnelled by the government into horse racing. As you may know, racehorse breeding is big business in Ireland, and the government always makes sure that it is well-supported, as it delivers a huge amount of cash into the treasury. Millions and millions of Euros in tax revenue each year go to support horse racing.

Finally, and this is something that will likely become more apparent over the coming years, the government spends a huge amount of money on responsible gambling initiatives. Tax revenue helps to fund initiatives that can identify problem gambling, and tackle the issue. The latest government regulations for gambling companies mean that a lot of this will now be funded by gambling companies when they are licensed. We still believe a lot of these initiatives, including research, will come from tax revenue.

We do want to point out that the government is reluctant to raise taxes on gambling since one of the largest gambling companies in the world is based here. They’re afraid if taxes went up, the millions generated by Paddy Power would disappear, too.

Practical Tips for Staying Tax Compliant

If you’re the average gambler, you don’t need to do anything to stay tax-compliant. As long as you are not earning massive amounts of cash from gambling, gambling regularly, or seeing it as your job, then there is no need to keep detailed records. Still, it is worth bearing in mind the following tips, just in case.

• Keep records of all your winnings, losses, and bets that you place. As we said, the average person probably won’t need to do this. It is wise to keep this information just in case somebody asks you where your money came from. You won’t need to pay tax on it unless you’re a professional gambler, but Revenue does still have a right to know about your income, so they can tell you that tax doesn’t need to be paid.
• If you’re a professional gambler, or you’re winning a lot of money from gambling, then talk to a tax professional. They will walk you through the process of filing a return, plus provide detailed information on whether your activities are taxable or not. Do not attempt to do this yourself because you must declare your income if you’re a professional gambler.
• There are loads of resources that you can read for details about paying taxes in Ireland. We highly recommend that you visit revenue.ie for detailed information.