Arabs splurge on horses as IMF rides into town
ON the day the IMF flew in to Dublin to save the economy, Dubai's oil-rich ruling family -- the Maktoums -- went on a spree in Kildare, spending more than €1.2m on thoroughbred foals.
The sheikhs spent six-figure sums picking up six of the 15 most expensive foals at a buoyant Goffs November sales in Kill, where average prices were up 15 per cent on last year.
Lot 627, the most expensive colt in the sale and a son of leading sire Galileo, was sold under the hammer for €260,000 in the final session to Mertoun Paddocks in the United Kingdom.
But the biggest spender overall on the day was Sheikh Mohammed. His adviser, John Ferguson, spent €570,000 on just three foals as well as picking up several more at lower prices.
The successful sales at Goff's is a welcome boost for Irish breeders as the cold winds of recession hit the 'sport of kings'. The Maktoum's biggest competitor in the bloodstock industry, Coolmore, has cut the prices for the services of their stallions for the second year running.
The Coolmore Stud operation, which is headed up by tycoon John Magnier, has cut stud fees on 14 out of 23 stallions and increased fees on only one horse -- High Chaparral.
Blue-blood stallions such as Danehill Dancer and Montjeu, whose prices were listed as "private" in the past but are thought to have been around €100,000 last year, are listed for the 2011 breeding season at €75,000.
Coolmore manager Eddie Fitzpatrick said: "In line with market conditions we have reduced the fees for the vast majority of our stallions including Montjeu and Danehill Dancer, despite the fact that they both featured prominently on the sires tables again this year."
Meanwhile, the conflict between the racing chiefs and bookmakers in relation to betting taxation continues to escalate.
Economist Colm McCarthy, who produced the An Bord Snip Nua report, has recommended doubling the one per cent off-course betting tax, as well as introducing legislation to compel all gambling companies operating in Ireland to be licensed and pay a two per cent levy.
Mr McCarthy was commissioned by the racing and breeding industries to prepare the 51-page report: "Financing The Irish Racing Industry" which was presented to the Department of Finance as a pre-Budget submission. Among the recommendations were:
- The one per cent off-course betting levy should be restored to two per cent of the amount wagered.
- Legislation requiring all betting and gambling companies operating in Ireland by telephone or internet to be licensed here.
- Their turnover should be subject to the same two per cent levy as traditional bookmakers.
"Betting has the capacity to contribute more to sustaining the industry which provides most of its raw material. Horse racing, notwithstanding regular assertions to the contrary, remains the principal vehicle of choice for betting," Mr McCarthy said.
"Horse racing worldwide derives a major portion of its income from fees and levies from the betting industry, in particular the off-course betting industry," he added.
Denis Brosnan, chairman of semi-State Horse Racing Ireland, told the Sunday Independent that eight years ago the Irish betting industry generated €68m in duty for the State but that annual figure is now €36m.
"It means that the horse racing industry is now dependent on State funding drawn from the taxpayer and that is untenable. The betting tax should be increased to two per cent," he said.
But the Irish Bookmakers Association (IBA) says a two per cent betting tax would close a substantial number of betting shops and lead to job losses.
"At no point has the IBA endorsed the doubling of betting taxation on turnover. The IBA has proposed a new approach to taxation on betting which would combine a licensing system -- applied to all betting operators, be they in shops, over the telephone or online -- with taxation on profits, not turnover," it said.
Sharon Byrne, chair of the IBA said: "The IBA has always been of the view that the Exchequer can derive more taxation from betting but only if the right approach to betting taxation is adopted and all platforms are captured in the tax net, not just betting shops as has been the case to date."