Racing industry calls for betting tax reform

OIREACHTAS COMMITTEE:TOTAL BETTING in Ireland quadrupled from €1.3 billion to €4.5 billion from 2001 to 2009, but the return to the exchequer more than halved to €31 million, an Oireachtas committee heard yesterday.

The agriculture, food and forestry committee was told by Horse Racing Ireland chief executive Brian Kavanagh that the reduction of the betting levy to 1 per cent was at the core of the problems facing the equine industry.

“The rate is so low that the bigger betting operators can absorb it as part of their costs while the smaller operators find themselves struggling to pay a turnover tax irrespective of their level of profitability.

“The bigger operators also have online betting operations which avoid paying even this 1 per cent levy.

“Online is effectively offshore and even telephone call centres based in Ireland route their calls offshore and thus accrue no duty.”

Mr Kavanagh said the betting levy was introduced in 2001 to finance the industry. It was set at 5 per cent and worked well but was progressively reduced to 1 per cent in 2006 and the liability transferred from the punter to the bookmaker.

As a result, he said, the Horse and Greyhound Racing Fund had been reduced progressively and had fallen from €76 million in 2008 to €57.2 million this year, which was an unsustainable position from which to develop a key industry.

“The racing industry does not want the taxpayer in Ireland to directly subvent the industry through the exchequer. But this is an urgent matter and one that addresses the very survival of our racing and breeding industry.

“While Ireland is proud to be the biggest producer of thoroughbred foals in Europe and third in the world behind the US and Australia, we are under significant threat.”

Mr Kavanagh said the main threat came from France, which was actively seeking to attract the world’s leading bloodstock investors who currently base their operations in Ireland.

He said returns to the French equine industry from higher betting taxes there meant it could provide attractive incentives to owners and breeders to breed and race their horses in France.

“For example, King’s Best which sired Workforce, the winner of the Epsom Derby, has moved from Ireland to stand in France,” he told the committee, which voiced cross-party support for taxing online betting.

The committee also heard the horse industry in Ireland was a world leader, supporting 16,500 full-time jobs which contributed in excess of €1 billion to the Irish economy every year.

Mr Kavanagh said it was a sustainable industry spread all over the State, and was closely linked to farming, where 92 per cent of the breeders of world-class horses had less than five horses.

Some of the committee members, including Seán Sherlock (Labour), Shane McEntee (Fine Gael) and Martin Ferris (Sinn Féin), complained of the damage online betting was causing to families.