Saturday 25 January 2020

Martina Devlin: 'The common good should be the real winner when it comes to dishing out funds raised from gambling'

Why not take some of the betting tax and invest it in small soccer clubs which do excellent work and are being punished through no fault of their own? (Stock picture)
Why not take some of the betting tax and invest it in small soccer clubs which do excellent work and are being punished through no fault of their own? (Stock picture)
Martina Devlin

Martina Devlin

A day out at the races is an important element of the Christmas tradition for many people, a spectacle associated with glamour which remains accessible to those whose means are more modest - the great and the good rubbing shoulders with the rest of us.

Corporate hospitality boxes pop to the sound of Champagne corks and are peppered with socialites and people with well-known names. But elsewhere are plenty of racegoers who brave the elements, refuelling themselves from flasks of coffee and foil-wrapped turkey sandwiches, and enjoying the excitement no less.

Then there are those who prefer to share the excitement at a remove and tune in to the thunder of hooves on the television.

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Undoubtedly, there is much enjoyment to be had from this exhilarating sport and for some spectators a social punt on the horses is part and parcel of that.

This week, for example, one of the highlights of the racing calendar has been the four-day Leopardstown Christmas Festival which runs until tomorrow and offers "glamour and top-class National Hunt racing". No arguing with that description. A group of thoroughbred horses in full flight is an awe-inspiring sight.

It's fair to say that a lot of money underpins the sport. A proportion of the funds given over to horseracing originates with the taxpayer, that's one source.

Another is wealthy individuals with a passion for horseflesh who pump substantial investment into their animals before ever they reach the stage of competing, with no guarantee of a return.

Various organisations also help to finance horseracing. And many high-profile races are sponsored by large gambling companies which profit enormously from betting.

The betting tax was multiplied from 1pc to 2pc of turnover in last year's budget. It drew in €52m in 2018 and is estimated to raise around €100m this year for the Exchequer.

Many of the smaller Irish bookmakers argued against the hike because the levy can't be passed on and they said they were already hard-pressed by increasing competition from online gambling sites. But the doubling of tax happened anyway and the gambling industry's ongoing pleas for its reversal are falling on deaf ears.

The take is shared out primarily between horse and greyhound racing. Now this is a little odd. The nature of betting has changed but gambling in Ireland remains controlled largely by the 1931 Betting Act.

The Seanad debates on the bill from that period focus on horseracing bets primarily. They also show some public uneasiness about the existence of betting shops.

Finance Minister Ernest Blythe said: "It has been alleged that there has been a great increase in the habit of betting as a result of the opening of the betting shops… What has, in fact, happened is that betting that was done secretly before is now being done openly and publicly."

He referred to clandestine betting shops in most towns before registration was introduced, some with a couple of packets of birdseed in the window as a cover for their activities.

That was then and this is now. People gamble on all sorts of other sports today. For instance, a sizeable minority of bets are placed on soccer matches but soccer in Ireland receives none of the betting duty. Why not?

It's illogical that horseracing should have a virtual monopoly on the proceeds of the betting tax - and the League of Ireland could certainly use a helping hand.

Let's pause to consider here who wins the big-stake money in Irish racing. Number one among purse earners is Ryanair boss Michael O'Leary's Gigginstown House Stud, with €4.4m in prize money following 940 runs in the 2017/18 season. O'Leary runs the stud along with his brother, Eddie.

In second place was JP McManus with 997 runs in the same season and total prize money of €2.8m. The leading flat racing owner was listed as Ms John Magnier, with prize money of €2.3m.

So fat purses are ending up in the pockets of wealthy racehorse owners. McManus and John Magnier have spent many years as non-tax residents. O'Leary, however, chooses to be tax resident in Ireland and pays a significant sum of money to the Revenue Commissioners every year.

All of the other major winners also rank among Ireland's richest and most powerful people. Horseracing is known as the sport of kings for a very good reason.

Granted, owners' expenditure is eyewatering before they reach the point of winning races. But of all the groups in society with a passion for sport, do those rank as most in need of State subvention? Even if the answer is yes, shouldn't the money be spread around a broader range of sports which attract betting?

Or here's a thought. What about diverting some of that betting tax into services which seek to help those with gambling addiction?

Most people can manage to enjoy a flutter without losing their shirt. But some people are ruined because they are compulsive gamblers who can't control the habit.

Horse Racing Ireland (HRI) received €64m from the Government last year. That money came from the State's Horse and Greyhound Racing Fund and amounted to the bulk of HRI's net income. So that's the entire €52m from 2018 chewed up with additional funds on top.

The betting tax isn't directly related to the grant which goes to HRI but the tax raises money which goes into the Exchequer and the Government gives money to the industry.

It's not necessarily the same money - but the bottom line is the State collects money from gambling and in turn gives cash to HRI.

The argument put forward by the horse racing industry is that the activity creates employment. There are many sports which provide jobs and the one in most acute difficulty presently is soccer. I'm not suggesting ending the horse racing industry's funding but sharing the pot more widely.

Soccer is in a shambles following revelations about the FAI's crisis. Over recent weeks, we've learned that the true state of its liabilities now stands at €62m when funding and loans from Uefa are included.

As an umbrella group, the FAI supplies money to the grassroots soccer movement and the viability of local clubs - which provide an important community service - has been put at risk.

Why not take some of the betting tax and invest it in small clubs which do excellent work and are being penalised through no fault of their own?

That's one suggestion for the betting tax. No doubt there are other possibilities.

However, as a society we need to take a long, hard look at the benefits and costs of gambling - and consider, when it comes to public money well spent, whether the common good is really the winner at the races.

Irish Independent

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