The 2018 Cheltenham Racing Festival is now in full swing. This year’s event is the penultimate one before Brexit on March 29, 2019.
The UK and Irish horse racing communities have been intertwined for centuries.
Brexit threatens to sunder that relationship and pose a huge threat to our biggest sporting industry.
In 2010 Sport Ireland estimated that (outside of racing, which was not it is remit) the value-added, spending contribution of sport to the Irish economy was €1,830 million, equivalent to 1.4% of then GDP.
The importance of horse racing to the business of Irish sport can be seen in the fact that, according to a 2017 report by Deloitte for Horse Racing Ireland (HRI), the annual total expenditure for the racing and breeding industry in Ireland is almost exactly the same - €1.84 billion.
What impacts detrimentally on Irish racing, impacts on Irish sport.
Of itself the Irish racing and breeding industry employs over 29,000 in direct, indirect and associated jobs and markedly so in rural areas.
Annual bloodstock sales are creeping toward half a billion euro making us a world leader in that part of the industry.
There are 50 thoroughbred horses for every 10,000 people in Ireland, compared to three in Britain. There are nearly 900 horse breeders in Co Cork alone – a horse mad county in an equine mad country.
Our biggest single export market for the industry (at 65%) is Britain. Not only is the volatility of sterling affecting us but the volatility of the current Brexit negotiations between the UK and EU means that we must prepare ourselves for a hard Brexit and including possible reversion to World Trade Organisation rules which might result in tariffs of up to 11.5% on horse sales.
Brexit will also have an impact on a pre-EEC, tripartite arrangement involving Britain, Ireland and France which, in effect, allows the free movement of horses in the three countries that account for nearly 90% of horse movements to race meetings in the EU.
The arrangement, which is based on reciprocal recognition of horse passports and mandatory health certifications, has, over the decades, become recognised in EU law.
The agreement was seen to good effect during the foot and mouth disease crisis when, as part of the precautions surrounding its spread, the European Commission could easily impose extra certification requirements to protect the industry.
As facilitated by this tripartite arrangement, 10,000 horse movements occur annually between Britain and Ireland. Separately, 7,000 horse movements occur between Northern Ireland and the Republic.
And not surprisingly, given that the sport is effectively regulated on an all-island basis, 90% of horses that run at meetings in the North are trained in the Republic.
The regulatory conundrum for Irish horse racing – equivalent to the employment issues that might arise for the IRFU and Ulster players post-Brexit – will be interesting.
A small example can be seen in the long-running saga emanating from corruption claims in a race at Downpatrick in September 2010.
The allegations were that the English owners of a horse conspired with its Kildare- born jockey and an Armagh based trainer to lay bets against the horse, which was subsequently pulled up, on the betting exchanges.
Eventually, and including a trip in judicial review to the High and Supreme Courts in Dublin, the Turf Club, informed by reports from Betfair and others, cleared the trainer, banned the jockey for 4 years and pursued the other parties.
In the future, Brexit may however throw up significant legal difficulties in the cross-border prosecution of so-called integrity matters in horse racing.
One of the key ways of preventing race rigging and indeed match fixing more generally in sport is where sports bodies, regulators and commercial operators, such as betting companies, agree to share sensitive data, including personal financial details or even individual’s phone records.
That cooperation needs to be done with due respect to individuals’ right to data and privacy protection. Brexit is taking place just as a major overall of EU data protection law and including e-privacy regulation is occurring.
Such is the impact that Brexit might have on the racing industries of Britain, France and Ireland that racing executives have lobbied bureaucrats at the offices of the EU’s chief Brexit negotiator, Michel Barnier in order to press the case for a special dispensation for horse racing in any UK/EU deal.
As with a lot in horse racing, gambling plays a part here too. Fewer Irish or French horses at Cheltenham or Ascot, and such meetings lose their attraction for the betting markets. In turn, horse racing’s revenue from betting levies or taxes also falls.
Ironically, if the Irish government were to step in to assist the horse racing industry during the Brexit transition period – and presumably the greyhound industry is equally vulnerable – then such assistance might be deemed contrary to EU state aid rules.
State aid rules limit the amount of public funding a member state can give to a domestic entity or industry because such favouritism may distort the internal market and disadvantage competitors in other parts of the EU.
When, for example, the Irish government gave €30m in direct public funding for the rebuilding of Páirc Uí Chaoimh (with the Irish bid for the 2023 Rugby World Cup in mind) the grant had to be investigated by the European Commission.
From a British point of view, a crucial aspect of Brexit is that EU/EEA nationals wishing to immigrate or move temporarily to the UK to work in sport currently enjoy freedom of movement.
That may now change and such workers may need a work permit or sponsorship by a relevant sports governing body.
For British racing this has already had an impact with a shortfall of work riders and thoroughbred racing grooms. The industry is seeking an exemption from any migrant reforms post-Brexit.
The logistics for a sport such as football are also being debated. An ongoing House of Lords Committee on EU affairs has noted research suggesting that, as things stand, well over 300 current players in the Premier League, the Championship and the Scottish Premier League may have to apply for some sort of post-Brexit permit.
According to the heads of an agreement reached by Westminster and Brussels in December, a common travel area will remain for UK and Irish citizens so the above should not concern us - but who knows with Brexit?
It would not be a surprise if Kavanagh and his fellow racing executives get a special deal for the continuing free movement of horses between the UK and EU but that the free movement of those who ride them, the jockeys, are restricted in a political fallout about workers’ rights.
Indeed, that image of the riderless horse neatly encapsulates Brexit’s impact on sport – unpredictable and directionless.
Jack Anderson is Professor of Sports Law, University of Melbourne and Adjunct Professor, University of Limerick.
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