Yesterday, Ireland’s Minister of Finance released a budget that confirmed something long speculated: The Irish government intends to place a tax on all bookmakers who take bets from Irish citizens, regardless of the location of the bookmaker.

Currently Ireland levies a 1% betting duty on all transactions between Irish citizens and Irish bookmakers located within the borders of the Emerald Isle. Bets placed online or via telephone with foreign bookmakers, however, escape that tax. Seeking additional revenue, Finance Minister Brian Lenihan wants to apply the tax to those overseas bookmakers if they conduct transactions with Irish citizens. Betting exchanges are thought to be in the crosshairs as well.

On Tuesday, the Minister of Finance proposed the Annexes to the Summary of 2011 Budget Members. That legislation states that “the government intends to include provisions in the finance bill and revise the Betting Act 1931 to ensure that all bookmakers taking bets from Ireland will pay 1% duty on those bets in the same way that betting shops currently do.”

Adding a tax is the easy part, though. Collecting a tax from foreign-owned and foreign-operated companies that don’t have a physical presence in your country is the tough part. To do so, most likely Ireland would have to create a licensing framework and refuse to allow unlicensed bookmakers to do business with the Irish. Those who become licensed would do so with a contract that includes the 1% tax.

That in itself would also be problematic. Before awarding licenses to overseas bookmakers, the Irish government would have to block or ban all current foreign bookmakers, which would violate the EU’s free trade rules. Minister Lenihan understands the difficulties ahead, but is determined to tax foreign bookmakers at the same rate as their domestic competition. Doing so would even the playing field and bring in additional revenue for the nation.

Spain, like the United States, has had a ban on online gambling. However, the Spanish government is taking steps to legalize and regulate the online gambling industry. As the market begins to open up, online casinos are rushing to get their place at the table. Two online casino giants, Bwin and William Hill, are currently under negotiations for licensing deals. Studies say that Spain has a potential a market of 50 million people. Bwin and William Hill want to be the first online casinos to hit the market, giving them an early competitive advantage.

 Spain’s move to legalize online gambling is in response to the European Union claim that the ban on online gambling violates EU trade agreements. The United States has been criticized of the same thing in regards to trade agreements within the World Trade Organization. With the possibility of America legalizing gambling soon as well – with a bill to repeal the Unlawful Internet Gambling Enforcement Act (UIGEA) currently in the House of Representatives – you can bet that the US would face a similar licensing rush from casinos. Most people believe that the US would give preference to current land-based casinos for licensing, though it would have to allow some foreign online casinos to abide by its trade agreements.

 Until then, Spain is the new pretty girl in the class and all of the online casinos want to meet her and get her phone number. Bwin and William Hill are the first to start talking to her, but expect the shyer casinos to say hello soon.