Paddy Power latest gambling firm to consider relocation offshore

04/03/2010

The chief executive of betting shop chain Paddy Power is the latest in a string of industry high-flyers to consider relocating his company offshore.

Patrick Kennedy, whose firm is currently based in Ireland, says he will relocate if the tax burden in Ireland continues to worsen.

The firm reported a 15 per cent profit decline to EUR 67.2 million, despite betting turnover rising by 31 per cent to EUR 2.75 billion.

The Department of Finance is currently considering imposing a tax on telephone and internet betting transactions, which would be enough to drive Paddy Power offshore, says Kennedy.
He claims that a 1 per cent tax on turnover from these sources of income will cost Paddy Power an extra EUR 2.5 million from its profits annually.

In 2008 the firm paid a huge EUR 18 million in taxes including VAT and corporation tax. Kennedy claims that if the firm had relocated offshore to Gibraltar, this bill would have been halved.

Although Kennedy said the firm had a “strong commitment” to Ireland, he added, "this is a very competitive, cut-throat market. The gap between doing well and underperforming is very, very narrow. You can't take too many structural impediments to your cost base, and that could lead to the tipping point.”