Concerns Over Video Game Gambling Continue to Grow
The Gambling Policy Division of the Irish Department of Justice has joined 14 other gambling regulators from around the globe in signing an International Declaration expressing concern about gambling in video games. The regulators presented a united front in addressing the "blurring of lines between gambling and other forms of digital entertainment".
The increasing presence of gambling in the video gaming world has been raised as a growing concern. Gambling mechanisms within games go largely unregulated at present, the rationale being that as nothing of real monetary value is at hazard, the activity cannot be considered gambling.
Efforts by individual national authorities to tackle this issue have had little success up to this point. The Belgian government announced earlier this month that they were launching a criminal investigation into Electronic Arts, arising from their continuing use of loot boxes in FIFA 19, after they had been declared illegal. EA have indicated that they intend to fight this case if prosecuted.
Increase in Ireland's Betting Tax
As part of Budget 2019, the Irish Minister for Finance announced that Irish betting tax will increase from 1% to 2% of turnover. Betting intermediary tax will also increase from 15% to 25%. The tax increases will take effect from 1 January 2019.
Parties in support of this increase have suggested that additional revenue generated by this increase should be directed towards gambling addiction services. It has also been suggested that this money could eliminate funding costs currently being incurred by the government including the shortfall between the tax take, and the €80m per year which the exchequer contributes to the Horse & Greyhound Fund.
Other parties have voiced concerns that this increase will put pressure on Irish bookmakers, and in particular on smaller businesses. As pointed out by the Irish Bookmakers Association, this tax is on turnover and takes no account of profitability. According to the IBA, the increase to 2% has the potential to wipe out bookmakers profits and put further pressure on the sustainability of smaller bookmakers. A rise in illegal gambling activity in the face of this higher tax rate could also be a concern.
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