Ireland will act as the European Union‘s (EU) lead broker in negotiations to settle the 2028–2034 budget, which aims to raise €2trn for the economic bloc’s next funding cycle of key initiatives, projects and programmes.

Beginning 1 August, Ireland has taken on the Presidency of the Council of the EU, and will be in charge of a decisive period of negotiations of 27 member states to settle terms of the Multiannual Financial Framework (MFF).

The negotiations have been deemed as the most important in the EU’s history, as the bloc undertakes a fundamental change in its economic policy and outlook. The EC has proposed a minimum budget of €2trn, equivalent to around 1.26% of the EU’s average gross national income between 2028-2034. 

Entering a new cycle, the EU has chosen to overhaul its expenditure that previously favoured regional development, market cohesion and agricultural subsidies.

The new package will be focused on fixing EU concerns and liabilities on defence, IT securities, migration and climate change. In addition, the EC calls on the union to fix its ‘productivity gap’ by funding digital competitiveness, improving enterprise and the re-skilling of workforce for technology and AI. 

Of significance the budget guarantees the EU’s repayment of COVID-debt at €600bn and a guaranteed €150bn in structural and military aid for Ukraine and its defence against Russia.

But unlike previous budget negotiations, the Commission wants member states to place more emphasis on EU “own resources”, which would enable Brussels to finance more of its programmes through dedicated revenue streams rather than through direct national contributions.

The Commission President, Ursula von der Leyen, has supported the move towards greater European fiscal self-sufficiency as Brussels has to find new sources of financing for its greater responsibilities and repay the bloc’s debt.

The EU gambling tax

The EC has been urged to consider union-wide tax-plan based on electronic waste, tobacco excise duties and contributions from large companies operating in the Single Market. 

All together, the Commission estimates that its proposed new resources could generate around €58.5bn a year in 2025 prices.

The approach has also opened the door to proposals from the European Parliament for additional pan-Union and common levies.

Romanian MEP and European Parliament Vice-President, Victor Negrescu, has proposed targeting the gambling sector, with support from members of the Socialists & Democrats of Europe (S&D).

Negrescu suggests a 1%-to-2% EU levy on online gambling and betting, arguing that a standardised levy on the European online gambling sector could raise at least €4bn annually, generating an additional revenue stream for EU programmes from 2028 onwards. 

S&D members have called for support of a Union-level gambling tax, believing that it might be more than just the immediate funding for the MFF. Supporters believe a common taxation framework could serve as an initial step towards the harmonisation of European gambling laws in addressing the fragmentation of gambling laws across Europe.

Backing its proposal, S&D has previously noted that a common tax should help support licensed and tax-paying businesses to be more protected from operators targeting European consumers from outside regulated markets.

But the tax plan has faced immediate resistance. Robert Abela, Prime Minister of Malta, said that he will reject proposals for an EU-wide gambling levy as taxation and fiscal sovereignty should be the competencies of individual member states. 

Malta believes that a single EU tax would have a disproportionate impact on its economy and national sovereignty over specific industries. Malta is set to become a net contributor to the budget. 

Ireland’s determination on a union tax for gambling will carry significant relevance. In February, the Dali (legislature) sanctioned the new gambling regime when the Gambling Regulatory Authority of Ireland (GRAI) started accepting applications for Remote Betting Licences and Remote Betting Intermediary Licence. 

Ireland now enters the MFF negotiations with one of Europe’s latest gambling regulatory frameworks in place, which puts Dublin in a unique position of negotiating a potential EU gambling levy and having to organise its own domestic licensing and regulatory mechanisms.

However, any attempt to advance an EU gambling levy is expected to be resisted by Malta. The island’s economy is very much entangled in the European online gambling industry through companies licensed by the Malta Gaming Authority (MGA).

Such is the case with the Republic of Cyprus as well, which passed the EU Presidency on to Ireland earlier this year.

As Ireland tries to broker a settlement between the 27 member states, it must now deal with these competing demands. The task requires agreement not only on how the EU spends close to €2trn between 2028 and 2034, but increasingly on how Brussels raises the money itself.

For the gambling industry, the Irish presidency is of special importance. Negotiations will determine whether the proposed gambling levy is feasible for EU members to make it a viable EU own resource or if member states will be happy to remain in charge of taxation and the whole issue will have far-reaching implications for future coordination of Europe’s fragmented gambling market.