Two of the State's largest bookmakers, Terry Rogers and Paddy Power, will offer direct Internet gambling on new interactive websites under development.
Terry Rogers Bookmaker will open its new website - www.terryrogers.com - at the end of next week and expects an online betting service to operate within six months. Customers will be able to get odds quoted on the Internet and place bets using credit cards.
The Terry Rogers site is aimed primarily at the Irish market and will initially feature sports which do not change their betting prices very quickly such as soccer, GAA, golf and the Superbowl. If there is a strong response to the site then the bookmaker will offer real time betting enabling the latest racing prices to be quoted.
Mr Terry Rogers said the lowering of the domestic tax rate to 5 per cent was one of the main reasons he decided to enter the Internet market.
"We decided that with the tax rate coming down and our own very competitive prices we can possibly compete with offshore companies who charge a handling charge of 3 per cent," he said. Mr Rogers would not rule out setting up an offshore Internet operation that would offer tax-free.
Paddy Power bookmakers expects to set up an off shore interactive website offering tax-free betting to international clients within nine months.
For the past 2 1/2 years the company has operated a brochure website for Irish customers but wants to break into the lucrative tax-free betting market. According to a spokesman for Paddy Power, however, Irish people would be excluded from using the new site because it would contravene domestic tax regulations.
He stressed that the bookmaker would do nothing to undermine the current 5 per cent tax rate brought in at the last budget to offset the threat from offshore online and telephone bookmakers. Online gambling has hit the headlines recently as the number of offshore bookmakers has mushroomed. Hundreds of online bookmakers are based in tax-free havens such as the Caribbean, Isle of Man or Litchenstein. Last week the bookmakers Ladbrokes, parent of the Hilton Hotels group, announced plans for an offshore tax-free betting service based in Gibraltar.
Mr Peter George, Hilton chief executive, said it had to respond to bookmakers such as Victor Chandler who moved his telephone betting business to Gibraltar in May to escape Britain's 9 per cent tax and betting levy. Some Irish telephone bookmakers have also taken business after tax in Ireland was cut in half to 5 per cent.
At present, one bookmaker in the Republic, Easybets, offers a tax free online betting service operated from an affiliated off-shore operation in the Dominican Republic. The site is targeted at the lucrative US market where online gambling is a multimillion dollar industry.
But under Section 33 of the Betting Act, 1931, it is illegal under Irish law for an Irish resident to place bets with an operation outside the State. It is almost impossible, however, to enforce the act.
