Some proposals 'unworkable'

RACING GAMBLING LAWS REFORM:SOME OF the Labour Party proposals for the reform of gambling laws in Ireland, and ensuring Irish racing's financial footing, have been described as "unworkable" by the world's largest internet betting firm.

Betfair was responding to a document published yesterday outlining Labour’s idea on taxing off-shore and remote betting, and reforming the funding of the Horse and Greyhound Fund.

Central to the proposals are efforts to levy the flourishing off-shore betting market which has seen a boom in internet and telephone gambling which in turn has seen the tax take from betting drop significantly in recent years.

Labour wants all firms taking bets in Ireland to be licensed, and pay a 1.5 per cent levy to government, or else face having their services blocked to customers in this country by Irish Internet Services Providers.

Similar proposals are being considered by the British government as official recognition of the financial betting drain deepens throughout Europe.

The proposals come on the back of Horse Racing Ireland’s 2009 report earlier this week which saw dramatic drops in almost all key areas of the industry and which prompted officials to renew calls for Government action on off-shore betting.

The Department of Justice is carrying out a review of gambling laws and Labour’s proposals were yesterday welcomed by HRI, whose funding under the Horse and Greyhound Fund has been dramatically slashed in the last 18 months.

“It says a lot of things we have been saying for the last two years,” said the HRI chief executive Brian Kavanagh.

Labour estimates that a 1.5 per cent levy on all bets placed in the State, whether on-course, in shops, by phone, online, or on betting exchanges, would yield the exchequer €90 million, based on a total betting market of €6 billion.

The party insists this could easily provide for the Horse and Greyhound Fund and also provide significant funding for the support and development of other sports, local sports partnerships as well as funding organisations for people with gambling problems.

Labour’s Arts, Sport and Tourism spokesperson Mary Upton also dismissed fears of a legal challenge to any such legislative moves under European law.

“In European law, each country does its own business. Italy has introduced measures, France is looking at the issue and Portugal is organising its own system,” she said.

“There is no reason why Ireland cannot set out its own requirements.”

Upton added: “Technically it is a challenge. Technology moves on and we have to make sure we are up to speed. But it can be done. The matter would also have to be underpinned legally so service providers are not vulnerable.”

However, bookmaker reaction to the possibility of services being blocked was more circumspect, with Betfair throwing cold water on some of Labour’s ideas.

“We accept in general the principle that bets placed in Ireland should be taxed but some of the details in these proposals are unworkable and could result in less tax being paid to the Irish State,” said Betfair spokesman Graham Ross.

“I don’t want to go into those details because we will wait and see what the Government proposes in terms of its bill later in the year. We have made our submissions and it is important to remember that this is just a proposal document,” he added.

Paddy Power bookmakers said it was happy to pay online tax but insisted it had to be fair and equitable.

“What is happening in Italy, for instance, is that an industry has grown up out of trying to police this,” said Paddy Power.

“If a website is banned, all it has to do is change its name and start again. Obviously reputable companies won’t do that but there are tens of thousands of sites out there and it is vital the reputable companies aren’t penalised.”

Labour wants exchequer funding of the Horse and Greyhound Fund to end by next year’s Budget and recognised yesterday the important economic role of racing and betting in Ireland.

It also recommends an investigation into the possibility of benchmarking prizemoney in this country to a level slightly above that of Britain and other European racing countries.

However, it also recognises that betting levels are rising on other activities.

“Gambling takes place on other sports and it is only fair that some money goes back into them, €31.5 million went into the Horse and Greyhound Fund last year, while the Sports Council got €50 million for a variety of other sports,” Upton said.

Kavanagh said he had no objection to money going to other sports but insisted the basic issue remained funding.

“What’s needed is an appropriate level of tax. How it is distributed is up to the Government. We’re looking for a fair return to racing but we have no claim on all the money,” he said.

“We have no objection to a 1.5 per cent levy. It is currently one per cent and the Government were looking at putting it up to two per cent but that was delayed pending a review,” Kavanagh added.

The HRI chief also said that Betfair, who had been making a voluntary €1.2 million payment to racing in Ireland, have contributed nothing since the start of 2009.

Main Points of Labour's Proposals

1. Direct exchequer funding to Horse and Greyhound Fund to end by Budget 2011.

2. All operators required to register and pay tax on the national portion of their revenue, ie a tax on gambling placed in Ireland.

3. A system to develop, register and collect the betting tax from remote operators should be developed by a specialised sector of Revenue, operating with the Departments of Arts, Sport and Tourism, Finance, Justice, Equality and Law Reform.

4. Betting Levy should be revised to 1.5 per cent in the Finance Bill, based on all bets placed in the State.

5. Potential revenue to the taxpayer is currently estimated at €90 million, based on a 1.5 per cent levy of €6 billion.

6. Other sports supported by gambling, and not confined to horse racing and greyhound racing.

7. Any online operator who doesn’t sign up will be filtered (blocked) by Irish Internet Services Providers to prevent provision of service to Irish customers.

8. Issue of exchanges and online gambling as platform for laundering money to be investigated by Criminal Assets Bureau.

9. Establishment of mandatory code of practice for all operators in all aspects of gambling industry with regards to problem or addictive gambling.

10. Recommends an investigation of benchmarking of horse racing prizemoney to a level slightly above that of our European and British counterparts to ensure State funding is put to best use.