Ireland Plans to Ride on Internet GamblingBy: R. Kingsley, Tuesday October 14th 2008
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The UIGEA seems to have divided the governments of countries round the globe into two groups. There are those who want to follow the United States model and ban Internet gambling. Some Scandinavian countries belong to this group. Then there are those who want to regulate and tax Internet gambling and use the taxes to provide resources to drive a strained economy. The United Kingdom and some East European countries fall in the second group. Now the Irish government has also indicated that it could be well going the regulation way.
As of now Ireland has a small land casino and a small Internet casino set up. The land casinos operate on the club system. This implies that whereas gambling at clubs is legal, the government does not get any share of the revenues. Also clubs offer limited scope of employment. Ireland presently allows Internet companies to operate out of Ireland provided they do not target the Irish online market. Such companies are even given tax breaks. Cryptologic is the largest company that has benefited from this policy.
The Irish government is actively considering a change in this policy for one that allows expansion of regulated gambling in the country. This is being done to meet the twin objectives of greater tax revenues and greater employment. This has been on the cards for quite some time but the worsening global economic situation has perhaps indicated that decisions now need to be taken quickly. The slowing global economy is reducing normal tax revenues and is increasing unemployment and therefore alternatives need to be found. Between land gambling and Internet gambling the latter shows greater promise. One reason is that Internet gambling does not have extraneous costs of travel, lodging and boarding that are becoming critical in the changed economic scenario. The other is that increased broadband penetration is providing Internet access to more persons.
Ireland's gaming and gambling agency, the Gaming and Leisure Association of Ireland has just submitted a set of numbers to the government that should make it easier for the government to take a call. The information indicates the positive effect on taxes and employment that the regulation of land and online casinos would have. The additional tax revenue has been estimated at over €50 million and the additional new jobs have been estimated as 3,000. And this would happen if the government allowed foreign casino operators to offer their services to only the Irish market. However the Gaming and Leisure Association of Ireland has gone one step further in its report. If incentives were given to Internet companies to create a hub in Ireland and offer global services from there then both the number of jobs and the tax revenues would more than double. This is a prospect that the Irish government would be hard pressed to turn down.
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