Kavanagh again calls for off-track betting levy to be doubled

THE very survival of the horse racing industry in this country depends on offshore betting firms being subjected to the same betting levy as those bookmakers operating on Irish soil, according to Horse Racing Ireland chief executive Brian Kavanagh.

The HRI’s position is that the current one per cent levy for off-track betting should be doubled – something which bookmakers are none too keen to embrace – and that online betting firms should be swept into the same tax net as their high street cousins.

It was the latter point which Kavanagh stressed yesterday.

As things stand, tax-free offshore operators are not subject to the one per cent betting levy although legislation, which has broad cross-party support on Kildare Street, is currently being prepared with a view to altering that situation.

Enforcing such regulations will be another matter, as other countries have already discovered, but Kavanagh told the Joint Committee on Agriculture, Fisheries and Food that such measures can hardly be drafted quickly enough.

“It is imperative that we get this right for the very survival of our industry. We believe this is a potential win-win situation as it could save the exchequer €30m, which is the top-up that it has been putting in annually on top of betting tax.

“It would remove the funding of horse and greyhound racing from the central exchequer and could actually protect jobs in the betting industry by creating a level playing pitch. It can also protect jobs in the horse and greyhound industry by creating a security of funding which is not dependent on a government grant.

“It would still leave Ireland with the lowest rate of betting tax in the world. This is a showpiece industry,” he pointed out. “If it wasn’t here it is exactly the type of industry that the country would be trying to create.”

As Kavanagh also made clear, it was never intended that the government, through the taxpayer, would be asked to put its hand in its pocket for the sector’s funding when the Horse and Greyhound Fund was established in 2001.

The irony is that it should now find that to be the case despite an extraordinary growth in betting activity in the last decade.

Ten years ago total betting in Ireland amounted to €1.3bn — a figure that generated a return to the exchequer of €68m — all of which was ring-fenced for the sector and sufficient to cover the needs of the horse and greyhound industries.

That picture had soured nine years later by which time the return to the exchequer had more than halved to €31m despite an almost four-fold increase in betting to the tune of €4.5m. “That is the core of our problem,” Kavanagh said.

“We believe it is unacceptable that the exchequer should have to top up the Horse and Greyhound Racing Fund and it is extraordinary that that should have to happen against a background of extraordinary growth in betting turnover.”

A number of goalposts have shifted since the Horse and Greyhound Fund was established ten years ago.

The betting levy has been shaved from five to two and one per cent; the liability to pay tax on a bet has shifted from the punter to the bookie and more and more betting has moved to tax-free offshore betting platforms – hence the need for government funding.

The government announced in May of last year that they intended to introduce legislation to reform the betting industry and address the increased amount of betting which is being routed outside the state to avoid payment of betting duty.

Kavanagh described the need for action as “urgent” and pointed to a list of figures – the 16,500 full-time jobs, the sector’s value of over €1bn to the economy and ability to attract 80,000 visitors annually – as it’s importance to the country.