A REVIEW is under way of the government fund that supports the horse racing industry and could result in an increase in the tax on betting.
Minister for Sport Séamus Brennan said that everyone "should be slow to disturb" the fund if it was succeeding. "However, that would not prevent the Government from reviewing it to ensure it is succeeding and that review is under way."
He was responding in the Dáil to Fine Gael spokeswoman on sport Olivia Mitchell, who suggested that a tax increase was viable. She said it was "quite shocking" that the Sports Council, "which funds a considerable number of sporting bodies, received approximately €57 million this year while the racing fund, which admittedly also includes greyhounds, amounts to €66 million in current spending. This cannot be justified or sustained."
Ms Mitchell acknowledged that Horse Racing Ireland (HRI) and the bloodstock industry together "constitute one of our critical industries and it is appropriate that the State should ensure that horse racing is facilitated, if not subsidised. As this is such an expensive sport obviously it has difficulty breaking even and traditionally, betting has been used as a way of funding it.
"However, the Minister must realise the present position simply is not sustainable."
She pointed out that tax had been reduced from 5 per cent to 1 per cent "because of the threat posed to bookmakers' shops by online betting. However, I'm uncertain of the validity of that argument as I have not noticed any falling off in off-course betting. This year's results for Paddy Power show its profits were €72 million, half of which is attributable to online betting. But the remainder came from the retail betting done in off-course shops."
She said that Paddy Power had opened 18 new shops, "10 of which were new and the rest being acquisitions. I find it hard to believe it could not sustain a higher rate of tax, if that is what is required."
The Minister said the legislation that set up the horse and greyhound racing fund was enacted in 2001.
It is due to expire at the end of this year, so a review is being undertaken. He said that if an extension of the fund was needed it would have to be approved by the Oireachtas.
The fund "receives guaranteed finance based on excise duty on off-course betting" and any shortfall in the tax generated is made up directly by the Exchequer, and this year HRI is to receive €61 million from the fund.
Mr Brennan said the funding "has allowed Ireland to develop into a world centre of excellence for horse racing".
