Online and phone betting worth €800m annually

THE TOTAL value of the Irish online and telephone betting market is just under €800 million annually, according to an industry report published yesterday.

Online and telephone, non-retail, bets placed by Irish punters are not subject to the 1 per cent tax imposed on those placed in bookies’ shops and are the focus of a row between the betting and horse racing industries.

Horse racing has traditionally benefited from betting tax, and wants it expanded to cover the non-retail business generated by bookmakers in Ireland to counter cuts in State funding for the sector.

However, bookies are opposed to such a move and warn that it will drive jobs to competing jurisdictions where it is not taxed. They say that estimates that Irish people place bets worth €1.7 billion online are wide of the mark.

A study by accountancy and consultancy firm, PricewaterhouseCoopers (PWC), values online and telephone betting in this country at €797 million annually.

The survey is backed by the country’s main bookmakers and the figure is based on high-street players such as Boyle Sports, Ladbrokes, William Hill and Paddy Power, and online specialists, Bet365 and PartyGaming.

The firms in question all provided information to PWC.

The survey did not include figures from betting exchanges, the most dominant of which is Betfair, but estimated that turnover in these businesses is €114 million.

Paddy Power chief executive Patrick Kennedy said the figures demonstrate that Horse Racing Ireland’s (HRI) estimate of the value of non-retail betting is seriously overestimated. “The reality is that taxing telephone and internet will go nowhere near to providing the ‘self financing’ solution that HRI has been advocating,” he said, adding that a 1 per cent betting levy on all sports would yield just €6.7 million.

HRI chief executive Brian Kavanagh, said he had not seen the report. But he added that he welcomed its publication as a further contribution to the debate. “It shows that online and telephone betting, excluding the exchanges and other elements, is approaching €1 billion,” he added.

Meanwhile, Ladbrokes said its winnings from Irish punters fell almost 6 per cent to £86.3 million sterling (€99 million) last year. The firm blamed the tough economic environment and a series of sports results that favoured punters for the performance.

Overall, the group, which has operations here, Britain and in Europe, saw 2009 revenues fall more than 4 per cent to £963.7 million, and profit before tax dip 30 per cent to £191.3 million.