Turf Club call for higher betting tax

Sun 6th Jan 2013, 12:37
Roddy Ryan, the Senior Steward of The Turf Club made the following speech at the annual Moyglare Dinner held at the K Club in Co. Kildare last night:

"I want to cover 3 topics in my remarks this evening, being the current and prospective state of our industry, the Turf Club’s regulatory role and the redevelopment of the Curragh.

Racing along with the rest of the country has struggled significantly in Ireland since 2008. The figures for reductions in foals produced, horses in training and attendances at racemeetings are testament to that. It is hard to know the precise impact of this on employment within the industry but clearly it has been negative.

It is also hard to identify the precise contributors to this downturn. Clearly the economic recession in Ireland has been a major factor. Far fewer people in Ireland can afford to buy and keep a horse in training. But racing in Ireland has faced and overcome these downturns before and the issue for the Irish racing and breeding industry is to plan for the next 5 to 10 years.

The question that Ireland as a country must ask is do we wish to have a racing and breeding industry that continues to be amongst the leaders in the world, and if so, what must we do to achieve that?

Currently we are fortunate in that on a regular basis we see the equine equivalents of Messi and Ronaldo competing here week in and week out, except not at facilities equivalent of the Bernabeu or the Nou Camp. We cannot take this for granted and without investments in both facilities and prizemoney we risk our industry becoming the equine equivalent of the League of Ireland, where we produce many good home players but they all get exported.

The world is littered with countries which once had but then lost major industries. For example the UK was once the leading ship building nation in the world but today the Clyde, and Harland & Wolfe lie idle. But for President Obama’s brave and controversial decision to invest some $30 billion in General Motors, car making in the US might have gone the same way.

Ireland has also seen many examples of industries which have benefited from stimulus provided by Government. Our own industry is one example, the IFSC is another.

Unfortunately due to a combination of the country’s current economic circumstances and poor decision-making under a previous administration, our industry now finds itself struggling internationally. I speak here principally of flat racing as national hunt racing faces much less international competition. The flat racing and breeding industry is facing increased competitive pressure from the UK and France not to mention the tremendous growth and prosperity of racing in Dubai, Australia, Hong Kong and elsewhere, all of whom have magnificent facilities. Our prize money on the flat is slipping well behind our international competitors who are stepping up their efforts on all fronts.

The industry needs to articulate the benefits to the Irish nation of a strong racing and breeding industry that is a world leader. The benefits include:

Employment

Strong export earnings

Foreign direct investment, such as in farms, breeding stock, racing stables

Tourism spin offs

Domestic consumption through entertainment facilities and the like

International prestige,

Strong rural benefits

Spin-off to the Exchequer in the form of tax and other receipts

We should not forget that the Dukes Report identified our sector as comprising over 1% of the nation’s GDP.

In all of this an appropriate funding model is key. Government in Ireland currently provides stimuli and incentives to agriculture and a whole range of industries. I am thinking for example of support to industry provided by IDA Ireland, Enterprise Ireland, Science Foundation Ireland and other bodies; supports provided through the universities to the IT and pharma industries. By and large, none of these supports are available to our industry which relies exclusively on its own wits and the Horse Racing and Greyhound Fund. Further, our industry no longer has any special tax incentives.

Ireland as a nation generates the lowest percentage return from betting of any major racing nation. The Minister has been hugely supportive in helping to have the Betting Amendment Bill introduced and we look forward to it being enacted. I also believe that an increase in the betting duty rate is warranted. I fail to understand how a rate that is markedly lower than all major international comparators, or markedly lower than the equivalent rate of VAT in the domestic economy, can be justified in a domestic context. Clearly the rate has to be set at a reasonable rate but the current rate is not reasonable.

We need an appropriate funding model to amongst other things create a new narrative for flat racing in Ireland. I do not accept that we should give up on racecourse attendances as some commentators seem to suggest. Flat racing is flourishing in many other jurisdictions and it can do so here also with better facilities, exciting race programmes, the elimination of the tax advantage enjoyed by off-course betting, innovative marketing, in due course better prize money and obviously, and let’s hope, a better economy will help too.

The Turf Club, like so many organisations in Ireland, has faced significant challenges in reducing its cost base to meet the reduced funding available. We have reduced our total costs by 25% over the last 4 years and I want to thank all our staff for the sacrifices they have made in achieving that. Arising out of the Indecon report we are engaged with HRI in seeking to identify further ways to save additional costs in the two organisations. We also welcome the Indecon recommendation that the industry should be able to plan on a multi year basis. This would enable us also to plan for some of the investments we need to make in areas such as betting integrity and drug testing.

The Turf Club comprises its staff and some 150 members who come from all walks of Irish life and give of their time freely, and without any expenses, for the benefit of Irish racing. The concept of “amateur Stewards” is used occasionally as a term of derision by some commentators, but the fact is that amongst our members are found many of the most dedicated and knowledgeable people in Irish racing with ability and top quality experience in a wide range of areas. We strongly welcomed Indecon’s affirmation of the importance of independent regulation of racing.

The Turf Club is committed to securing redevelopment of the Curragh Racecourse. It is dated and now ranks well behind major international racecourses, not to mention major sporting facilities in Ireland such as Croke Park and Lansdowne Road. We are working with prospective donors and are in discussions with HRI about bringing this project to fruition. Our preliminary calculations suggest that any HRI grant would be virtually recouped by the Exchequer in terms of VAT, PAYE and other benefits.

This month we plan to commence the process of procuring consultants for the design and planning phase of the project."

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