Paddy Power is well known for its Irish roots. Therefore it comes as a surprise to hear recent news that that the betting firm is considering a move abroad. The company’s chief executive Patrick Kennedy recently went on record last week to announce that Paddy Power was considering moving its operations offshore if the Government introduces plans to tax telephone betting operations.

In 2009 Paddy Power reported a 15% decrease in pre-tax profits, down to €67.2M.

The strict tax regime in Ireland is a major problem for Paddy Power, and the company is sensing new plans by the Department of Finance to impose more taxes.

Kennedy said that if the 1% turnover tax was imposed, a further €2.5 million would be dropped from its profits. This is especially problematic since the company has intentions of expanding their operations over the next few years, adding another 250 employees to their company to keep up with the growing popularity of online sports betting.

Consequently, Paddy Power is now considering taking its operations elsewhere to more tax friendly country like Gibraltar.

"This is a very competitive, cut throat market," said Kennedy. "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."

Kennedy maintained that the company was not keen to leaving the country and said that the group retains a "strong commitment" to Ireland but the Government’s tax policies must change.

Paddy Power currently controls nearly one third of Ireland’s sports betting market.

Miss B says: Operating offshore could lessen the company’s tax burden. Take William Hill for example, last year the company moved operations offshore and since then they’ve seen an increased advantage over their competitors.