Racing industry looking for funding boost via betting tax
BUDGET 2011:THE COUNTRY might be bracing itself for the worst ahead of today’s Budget, but Irish racing has its fingers crossed Minister for Finance Brian Lenihan will provide it with a rare bit of good news.
The industry’s ruling body, Horse Racing Ireland (HRI), have had their budget slashed in the last two years in the midst of a general downturn for racing which has seen severe drops in vital indicators such as ownership, prizemoney and numbers of horses in training.
However, HRI and other organisations are pinning their hopes for a possible resurgence on the Government today announcing a hike in betting tax to two per cent and a follow through on the Taoiseach’s pledge last summer to bring telephone and off-shore betting into the tax net.
“Clearly it is a huge Budget for the country and major issues have to be addressed,” HRI chief executive Brian Kavanagh said yesterday. “But from racing’s perspective it is important that all forms of betting are brought into the tax net, and then there is the question of the tax rate itself.”
From a high of €76 million, the Horse and Greyhound Fund finances have dropped to €59 million this year, with betting tax bringing in only €31 million. That meant €28 million being added to the fund directly by the exchequer.
A report by UCD economist Colm McCarthy, commissioned by organisations representing the racing and breeding industries, was presented to Government last month in which McCarthy recommended a doubling of the betting tax rate to two per cent.
Some off-course betting organisations have indicated they could go along with that but only if the tax is applied across the board to telephone and betting exchange turnover. Others, however, have warned of serious job losses on the back of such a move.
McCarthy’s report indicated such a move could generate up to €70 million in revenue, which would mean a substantial, and in the current climate rare, increase in funding for a semi-State organisation like HRI.
“I just don’t know if that is going to happen,” Kavanagh said. “The Government keep budgetary plans tightly to themselves on all issues. But we have made the case that horse racing should be supported and properly funded, and hopefully that will be reflected in the budget.”
An increase in betting tax was proposed in last year’s Finance Act but was held over until the issue of taxing offshore betting was addressed.
There has been general cross-party support for the idea of the racing industry, which supports an estimated 14,000 jobs in Ireland, receiving revenue from betting tax.
“Basically we are hoping the McCarthy report is implemented in the Budget. That’s the way forward for Irish racing,” said Jim Kavanagh of the Irish Racehorse Trainers Association yesterday.
“We hope it will happen. The future of Irish racing depends on it. If it doesn’t, the industry here will suffer hugely with unemployment, and our reputation worldwide will fall down the ladder after we spent so long climbing to the top,” he added.