Racing’s ruling body predicts that the sport in Ireland can be fully funded from betting levy revenue before the end of this decade and it plans to push the Government for an increase in betting tax rates.
Off-course betting duty receipts are up 63 per cent to €50.74 million, according to Horse Racing Ireland (HRI) in its latest financial report for 2016. This is a significant narrowing of the gap between what the exchequer gets in tax and what it pays into the Horse and Greyhound Racing Fund.
The racing industry will get €64 million from the Government this year, a €4.8 million increase on 2016, and although off-course duty is collected quarterly – and doesn’t reflect a calendar year – HRI believes the trend is towards betting tax fully financing Irish racing by the year 2020.
"We will have a truer picture by the end of March, but there has been a significant change from two years ago when the gap between what the government was taking in from betting and then paying out was in the nature of €28 to €30 million, " said HRI's chief executive, Brian Kavanagh. "Racing got €58 million last year, which means a gap of seven or eight million. It has closed significantly. We have always said the racing industry should be self-financing through betting duty, and before the end of the decade the number-one priority for us will be for racing to be fully funded."
On the back of a generally positive set of statistics for 2016, Kavanagh also said that betting levy rates should be increased.
Currently, there is a levy of 1 per cent of turnover in betting shops and phone betting, while 15 per cent of commission on gross profits in betting exchanges has been taken since government introduced legislation in that area in 2015.
“They are low rates by international standards, and I would argue that extra funding can be achieved,” Kavanagh said. “In fairness to the government, their first step was to tax offshore betting activity, and they did that in their 2015 legislation. The next step is to look at the rate.
“I think the Government is missing a trick in terms of betting duty. If the rate is right, enough tax is there to fund racing without having to go to the exchequer.”
The most glaring negative in HRI’s 2016 report was the continuing decline in on-course betting with bookmakers.
The levy paid by on-course bookies was recently cut to 0.25 per cent and Kavanagh said an argument could be made for eliminating it completely.
“It’s not a big figure materially,” he said. “I strongly feel costs for on-course bookmakers need to be reduced, but they also need to be more flexible. The days of the traditional betting ring have changed.”
As well as the levy, on-course bookmakers pay racecourses a pitch fee of five times the cost of admission to each race meeting.
