The way that taxes are handled in any particular gambling regime can be a key part of how the industry becomes structured as a whole. If taxes are too low, there isn't enough money to maintain the upkeep for the regulatory commission, and standards can fall. On the other hand, if taxes are too high, then they will have trouble attracting any operators at all because the profit margins will be too small.
This issue is in somewhat of a limbo right now as Ireland considers moving tax burdens from the operators themselves over to the punters and players of the games.
The Current Turnover Tax
Right now, there are two main components to the tax scheme in this country for betting. The first has a 1 percent point of consumption tax, which results in 1 percent of all punter turnover being taxed. For betting exchanges where there is not a standardized bet size (since players can more or less set their own wagers and not all bets get accepted), there's a 15 percent tax on revenue since there's no way for the site to lose because they just facilitate bets between players.
Effects of the Tax Structuring
There's a study being done right now to see how these taxes are affecting the industry and if they need to shift some of that burden over to the players. This could be done like sales taxes are in many parts of the world where the tax is paid at the time of purchase and is simply added to the cost of the sale for the item, which in this case is "purchasing" a bet.
Future of Taxes in Ireland
It's unclear how this is going to unwind, but operators have been given until June 19 to put in their own opinions on this option. It'll be interesting to see how this affects companies like Paddy Power and others who focus strongly on the Irish market. Until later this summer, we won't know the results of this study or which changes they plan to make, but a lot of their language indicates that moving taxes to the punters could be an option they strongly consider.
Steven Stradbrooke, Ireland mulls shifting betting tax burden from operator to punter calvinayre.com, May 23, 2017