Unlike their UK counterparts, Irish legislators have taken a similar approach to taxing gambling winners as those across the pond.
While they might not have imposed the same significant tax on big winnings as in some cases in the US over the last few decades, the topic has a long history in Ireland, with several changes and deviations.
While they might not have imposed the same significant tax on big winnings as in some cases in the US over the last few decades, the topic has a long history in Ireland, with several changes and deviations.
The emergence of online gambling added another headache for those Irish legislators who specialize in the taxation side of things. Ideally, it’s about finding a balance of ensuring that winners and gambling companies pay their fair share, with a percentage of it going back into services and companies that assist with problem gambling, but also not overtaxing it so it gets to a point where bettors will be driven away or forced underground.
Key points from Irish gambling tax
Irish gamblers need to be aware of which games and bets are subject to tax. It’s not a new idea in the Emerald Isle, though, so the changes to the law that have come in over the last half a century have hardly caused the same disarray as they would in the UK if there was a sudden announcement that gambling winnings would be taxed at 20% – which was the rate in Ireland back in 1986¹.
As it stands, gambling winnings in Ireland are taxed at 2%. Companies operating in the country are also subject to corporate tax on their profits. However, as a gambler, the flat rate is 2%. If a gambler is unsure about where they stand with their gambling, as not all gambling is taxable, it is crucial to seek the paid advice of a tax professional who can assist.
The majority of gambling falls into this bracket, so casino games, sports betting and lottery competitions all fall into this 2% remit – a tax rate that doubled in 2019, which is the last time it was checked. While this probably wasn’t welcome news to gamblers in Ireland, it was far better than the previous taxable amounts, ranging from 5% to 25% over the last 60 years.
A brief timeline of Irish gambling taxation
Here are some of the main points in the timeline that have helped shape the taxation of Irish gambling into what it is today:
1954
The original law that regulated gambling was ratified in Irish law, laying the foundation for companies looking to set up their gambling operations in Ireland. While the 1931 law originally allowed lotto competitions, the 1954 changes meant that the wheels were in motion for other types of gambling to emerge.
1956
A couple of years later, the gates opened for casino gaming in Ireland. While legislators wanted to slowly introduce the idea of casino gaming, and large, commercial casinos were not allowed to operate in the Emerald Isle, small licensed venues could mimic the type of action in a commercial casino. As long as they adhered to the regulations, they could operate in the same industry.
1986
It wasn’t until 30 years later that there was a revamp of how betting winnings were taxed in Ireland. Up until this point, there was a flat rate of 20% on wagers. Many Irish bettors saw this as excessive, and there were many cases of people claiming they lived overseas in a bid to avoid tax on their winnings.
2015
As regulators, casino platforms and sports betting companies tussled to find a fair compromise in the Irish betting market, the 80-year-old legislation still holding many of the regulations in place was finally amended.
The most significant part of this update resulted in operators being taxed, regardless of where they operated from. Companies also had to register in Ireland, and as long as they were providing a licensed service, they had to pay their fair share of tax – as did their bettors.
2019
Offshore casino companies looking to provide services to Irish gamblers had to pay excise duty of 2% on bets placed by their Irish clientele. If you’re unaware, it’s best to become acquainted with the regulations that govern gambling taxes in Ireland. Broadly speaking, companies are taxed 12% of their profits, but this varies for private licensed venues that provide gambling services.
Discouraging the rise of a black market
Irish regulators swiftly applied legislation, unlike countries such as the US, which saw a huge market go underground. For instance, black market Super Bowl bets in the US in 2024 comprised over 60% of all bets².
Given that the 49ers were in the final, and California, the most populated state in the US, is so vehemently anti-gambling³, this should indicate the level of disparity. While there’s an argument to be had here, and California has such a diverse economy that it doesn’t need to rely on a gambling tax base in the same way other territories or states may, it’s an eye-watering sum of money that isn’t going back into the economy.
Why taxation is important
Yes, we’re going to make an argument for why gambling winnings should be taxed. While this isn’t the case in all countries that tax gambling winnings, Ireland focuses on channelling a lot of the money and profits into organisations that spend their time and resources developing problem gambling services for those seeking help.
In the UK, for example, the UK Gambling Act of 2005 broke ground in many ways, but many believe the biggest, longest-lasting impact was the fact that gambling winnings are not taxable – which remains the case. In the US, all gamblers must report their wins and losses to the IRS?, and it follows a much stricter, regimented process than it does in Ireland. For example, the winner of the biggest ever Powerball in the US will have to pay in excess of $124 million in taxes.?
Ultimately, the idea behind taxing gambling is that the money can go back into the economy, helping to develop companies that assist people with their issues, and allowing central or local legislators to rotate the cash back into infrastructure projects that can alleviate some of the social issues that unfettered and unregulated gambling markets can cause.
There’s also the argument that taxation can deter people from gambling, and while that certainly would’ve been the case back in the 1980s when the tax rate was 20%, the current 2% tax is one of the lowest in Ireland’s history, and it’s rare to hear gamblers complain about it.
Relationship between safe gambling, taxation and legislation
The legislation will no doubt undergo many amendments or discussions, because legislators are not as open to the idea of allowing gambling companies to have free rein or the final say on how the laws should look. Obviously, this is healthy for any governing body; there needs to be a balance representing the different opinions and voices that ultimately sign off and ratify the legislation and any amendments that accompany it.
By ensuring a tax, even if it is a minimal amount compared to other countries, significant sums in Ireland go back into the tax base each year and bolster problem gambling services. While there will probably never be be a middle ground that suits all legislators in this argument, this is the best they can hope for, and it has proved to be a recipe that works.
If you or anybody you know begins to develop a problem with gambling, it’s vital to seek out assistance from the appropriate services. It can take many forms – but the most common ones are spending too much time or money on betting, money being spent on bets instead of life’s essentials, or harmful impacts on friendships and close relationships. Services like Gamblers Anonymous aim to provide support networks for those struggling; those with an issue can also reach out to medical professionals who will be able to assist.
Final thoughts
Gamblers who have any questions about taxation on Irish gambling winnings should always seek professional advice. As the gambling industry is becoming more intertwined in broader international markets, keeping updated on the latest developments is always a good idea. While it might not always result in changes in Ireland, it can indicate where the industry is heading globally and where the Irish market might head.
While there haven’t been any significant changes in the Irish gambling tax since 2019, it is not set in stone, so there could be amendments that either raise or lower the rate, or seek to include different types of gambling markets. Although legislators aim to keep the taxation laws as clear and easy to understand as possible, if you are unsure of anything, always seek the advice of a tax professional in Ireland to ensure you aren’t underpaying or overpaying on what is due.
