Ireland: Former Paddy Power CEO Calls for 40% Tax on Online Casinos

Former Paddy Power chief executive and co-founder Stewart Kenny has called on Ireland’s Minister for Finance to introduce a 40% tax on online gaming and casino businesses, arguing that the sector poses significant risks to consumers and provides little public benefit.

Kenny made the proposal in a letter co-signed by addiction specialists, in which he also criticized Ireland’s current taxation framework for online gambling companies.

Call for Higher Online Gambling Taxes

Kenny described online slot machines and casino games as “the crack cocaine of gambling” and argued that they are being marketed in Ireland as “harmless fun” despite the risks associated with these products.

He also claimed that international gaming companies are taking advantage of what he described as Ireland’s “lenient” tax regime.

The UK recently increased its Remote Gaming Duty, which applies to profits from online gaming, from 21% to 40%.

In the letter, Kenny and his co-signatories called on the Irish Government to introduce a similar levy.

“As an absolute minimum, it is necessary that the Irish Government immediately follows the example of the UK and introduces a new minimum levy of 40 per cent on gross gambling yield for online casinos.”

The group also called for further increases in future budgets.

“We believe in subsequent budgets the online casino taxes should be raised further to mirror taxation levels on tobacco, which are close to 80 per cent.”

Ireland’s Current Tax Framework

Ireland currently applies a 23% VAT rate to gross gambling yield for these companies.

Kenny argued that the country should reconsider its approach as online casino and slot-machine activity continues to expand.

He was chief executive of Paddy Power from 1988 to 2002 and resigned from the company’s board in 2016. Since leaving the gambling business, he has become a critic of industry practices, including the marketing of online gambling.

Paddy Power’s parent company, Flutter Entertainment, also owns Betfair in the UK and FanDuel in the US.

Concerns Over Online Casino Growth

The letter was also signed by Prof Colin O’Gara, clinical professor of psychiatry at University College Dublin; Dr Frank Houghton, principal investigator of the Tobacco, Alcohol and Gambling Research Group at Technological University of the Shannon; and Niall McNamee, a former Offaly county footballer and recovering problem gambler.

The group argued that gambling companies may be using traditional sports betting as a “Trojan Horse or a gateway” to introduce customers to online casino and slot-machine products.

According to the letter, online casino games can be more profitable for operators than traditional gambling products such as horse racing because they require little or no manpower and can operate around the clock.

Report Highlights Expansion of Online Gambling

The letter was accompanied by a report from Dublin City University economist Tony Foley, examining the development of online gambling in the UK and its potential implications for Ireland.

The report argued that the UK market has become increasingly dominated by online casino games and slot machines, estimating that around £84 billion (€97 billion) is gambled on online slots in the UK each year.

Kenny and the other signatories claimed that the growth of gambling websites and online advertising in Ireland over the past decade has contributed to the country's increasing exposure to online casino products.

They also argued that online casinos represent a particular concern for younger men, who, they said, may not fully understand the risks associated with gambling.

The letter further cited what its authors described as growing evidence linking gambling addiction with suicide and self-harm, reinforcing their call for stronger taxation and regulation of the online casino sector.