HRI look off-shore in attempt to solve problems
2008 STATISTICS: Brian O'Connorreports that the numbers released for Irish racing in 2008 make for bleak reading for an industry feeling the effects of the recession.
THE LONG-TERM solution to Irish racing’s financial woes could be off-shore if the sport’s rulers can persuade the Government to tax the €1.5 billion that is being wagered outside this country through telephone and internet betting.
Horse Racing Ireland (HRI) are in the midst of delicate negotiations with the Department of Sport over the future of the Horse and Greyhound Fund, which has financed the rapid growth of the sport in the last eight years.
The deadline for those negotiations is the end of February.
HRI chief executive Brian Kavanagh yesterday declined to comment on specific details or on the state of those negotiations, saying it would be unfair to both sides.
However, he again stressed the importance of securing long-term funding for racing, and pointed to the off-shore situation as the financial route down which the Government should go.
“When the fund started (in 2001) a total of €1.1 billion was being bet in Ireland with €68 million of that going to the State. Now betting is generating €5.5 billion with the State receiving €38 million. That is not sustainable,” he said.
“With so many demands on Government resources and finances, now is the time for the racing industry to become truly self-financing, as it is in most other countries. This can be done with a meaningful levy on betting, including all off-shore internet and telephone betting, which has wrongly escaped taxation up to this point. Working with Government, we can ensure that the mechanisms of the fund can be fully financed by betting duty.”
An estimated €1.5 billion is currently generated in telephone and internet betting from Ireland and it is the fastest growing area in the betting industry. Getting a slice of that revenue is becoming more and more important to HRI as the economic climate gets even worse.
“Working together with the Government we believe there is a way,” Kavanagh said.
“We have an open betting market in Ireland, unlike in France, for instance, which has a Tote monopoly. But what we are proposing has to be done to secure a long-term future.”
The affect of the global financial crisis has already hit racing’s finances. Last October’s Budget saw a nine per cent cut in Government funding for 2009, with €55.7 million going to the sport this year. That has already resulted in cutbacks throughout the racing industry.
However, yesterday there was more evidence of the precariousness of the economic situation, as HRI reported dramatic decreases in key performance indicators from 2008.
They include an 18.2 per cent drop in total on-course betting in Ireland, as well as a nine per cent slide in attendances and a 43.6 per cent collapse in bloodstock sales at public auction. In a statement, the HRI authorities also warned that “staff cutbacks and redundancies are now a stark reality for many businesses within the industry”.
The most dramatic impact on racing’s statistical balance sheet came in the second half of 2008 when the full brunt of the credit-crunch started to take hold. However, the appalling weather from August to October also resulted in the sport contracting for the first time in 15 years.
One of the most obvious areas of that was on attendances at the country’s 27 tracks which dropped nine per cent overall to 1,390,794. The figure includes the two courses in the North of Ireland.
“More than 50 per cent of the overall drop can be attributed to the significant number of meetings lost due to inclement weather,” the HRI statement read.
“There were 42 cancellations in total, including important days at Tramore, Tralee, Galway (September) and Listowel festivals, as well as the Irish Champion Stakes at Leopardstown.
“More than 112,000 racegoers attended the equivalent fixtures in 2007, whereas re-scheduled dates in 2008 saw a combined attendance of just 38,000.”
Racing’s ruling body did concede that “the most dramatic decline in 2008” was in bloodstock sales, which it said, reflects “a breeding industry under significant pressure”.
Kavanagh expanded: “There is always a lot of focus on prizemoney by many people, but beneath that is a real industry that is suffering.
“No business is immune from the recession and clearly it is going to be a very difficult year. Already we have anecdotal evidence of trainers and stud farmers all having to cut back, or letting people go or freezing salaries.”
He added: “With a range of cutbacks already in place for 2009 due to the reduction in our Government funding, owners, trainers, breeders and all of the 16,500 people who rely on the industry for their employment will need to brace themselves for the tough times ahead.”
Horse racing by the numbers
Total on-course betting:Down 18.2 per cent from €282.3 million to €231 million.
On-course bookmaker betting:Down 21.5 per cent from €205.2 million to €161 million.
Tote betting:Down 10.1 per cent from €61.3 million to €55 million.
On-course shops betting:Down 5.7 per cent from €15.8 million to €14.9 million.
Bloodstock sales at public auction:Down 43.6 per cent from €176.5 million to €99.5 million.
Total attendances:Down nine per cent from 1,527,078 to 1,390,794.
Sponsorship:Down 5.4 per cent from €9.2 million to €8.7 million.
Number of fixtures:Up 2.7 per cent from 333 to 342.
Cancelled fixtures:Up 250 per cent from 12 to 42.
Re-scheduled fixtures:Up 116 per cent from 12 to 26.
Prizemoney:Up 1.3 per cent from €59.6 million to €60.4 million.
Number of runners:Up 0.9 per cent from 34,291 to 34,591.
No of individual runners:Up 2.6 per cent from 8,810 to 9,042.
Number of horses in training:Down 0.6 per cent from 12,188 to 12,119.
Number of owners:Up 0.9 per cent from 5,588 to 5,641.
Number of new owners:Down 14.7 per cent from 1,449 to 1,237.