Tax on betting

 

Madam, – I wish to take issue with your recent report of the Paddy Power plc AGM (Finance, May 18th). As usual, the Paddy Power CEO Patrick Kennedy uses these occasions to attack any Government proposal to increase tax on betting.

The focus of such attacks is almost always the Irish racing industry. In a week where the Queen’s visit showed how, through the racing and breeding industry’s success, our economy has benefited enormously, I would have expected his attack to have merited some challenge or analysis.

Might I suggest, to use Mr Kennedy’s own words, that these attacks are merely a “fig leaf” to distract from the huge underpayment of tax the betting industry has been allowed in recent years. The following facts might help to illustrate the point: 1. The betting industry paid €37 million in betting duty in 1990 (21 years ago). Last year, this industry paid a total of euro €30 million in betting duty. This despite licensed betting turnover increasing from €370 million to €3 billion in that period.

2. No duty is paid by the internet betting firms including Mr Kennedy’s company Paddy Power plc.

3. Between the years 1999 and 2006, successive Fianna Fáil-led governments reduced betting duty from 10 per cent to 1 per cent. No other industry in Ireland received similar reductions in their level of indirect taxation.

The level of betting duty here is now the lowest anywhere in the world outside of tax havens.

In the current economic climate in which we find ourselves, it is important that we all make a contribution to solving the problems facing this country. We all have to endure measures such as the universal social charge and pension levies. It is unfortunate that, when faced with the prospect of paying a fair rate of tax, all Mr Kennedy seems capable of is to threaten to move Irish jobs offshore.

It is high time the betting industry here in this country paid its proper share of tax, as all others have to do.

– Yours, etc,

TOM HENDRON, Laurel Lodge, Castleknock, Dublin 15.

Madam, – An Irishwoman’s Diary (May 21st) covered the contribution of horse breeding in the light of Queen Elizabeth’s visit. Like many, I feel strongly that horse breeding is an industry of which Ireland can be very proud.

However, the column urged the imposition of a betting levy to fund Irish horse racing prize money. In seeking to justify this call several points were made which were misleading.

Christy Grassic of Coolmore Stud stated in the article that “bookmakers . . . rely on racing for the bulk of their business”. In fact, Irish horse racing today accounts for a small and diminishing proportion of bookmakers’ business. Ninety per cent of Irish sports bets on our internet and telephone channels last year had nothing whatsoever to do with Irish horse racing.

These days, Irish people increasingly place bets on a diverse range of sports such as football, rugby, Gaelic games, golf, tennis or cricket. It is nonsense that a bet placed on Leinster versus Northampton should be levied to provide funding for Irish horse racing prize money. The truth is that the days when Irish racing and bookmaking relied upon each other are well and truly gone.

The article stated that “Irish racing must contend with very low prize money”. In fact, Irish prize money over the past five years has averaged €23,000 per race, more than 50 per cent higher than its nearest competitor, Britain.

Given the recession, I am at a loss to understand how this huge premium can be justified.

Furthermore, Horse Racing Ireland tells us that the 20 most successful owners, most of whom are based overseas, accounted for 44 per cent of the total Irish flat racing prize money pool last year. Why should Irish employers be further taxed to provide extra prize money for millionaire overseas owners? From the days when Charlie McCreevy called the shots, the government has bankrolled racing prize money. The Exchequer has provided direct funding of €540 million for Irish racing prize money over the past 10 years. Any attempt now to create a link between the tax generated from bookmaking and the funding of racing would be a fig leaf for the Government to justify more grants for horse racing prize money.

The bookmaking industry should indeed be taxed; however, that tax should go into the overall Exchequer pot, as does every other tax, to be then allocated by the Government in the best interests of the country, particularly given our current economic and social imperatives.

– Yours, etc,

PATRICK KENNEDY, Chief Executive, Paddy Power plc, Airton Road, Tallaght, Dublin 24.