Sunday 21 January 2018

UK move should lead to HRI rethink on Betfair offer

Betting firm's deal in Britain shows up futility and hypocrisy of Irish stance, writes Ronan Groome

Susannah Gill, Betfair's public affairs manager, probably best summed up events last week when she tweeted: "The best thing about the Betfair/BHA deal is it's just the beginning. What can we achieve now we're on the same team?"

She was referring to the five-year deal which will see Betfair contributing 10.75 per cent of all revenues on UK racing from UK customers to British Racing. The significance of this sort of deal can by exaggerated by those involved, but there is every reason for optimism on both sides of this arrangement.

The deal was positively received in most areas of the industry, with BHA chief executive Paul Bittar leading the praise: "It brings many benefits, including substantial and increased guaranteed funding as well as, importantly, providing certainty for the sport in relation to Betfair's contribution. We hope that similar arrangements with other betting operators will follow."

The link between bookmakers and financial support for the racing industry has been a continuing source of debate, but with Betfair now leading the way, the path may well be paved for the UK's high street bookmakers to follow suit. The obvious question to be asked now is, what about Irish racing?

You have to go back to 2009 to find the last positive collaboration between Horse Racing Ireland (HRI) and Betfair. Between 2006-2008, Betfair had voluntarily contributed €4.5m to the industry here. As reported at that time, they had proposed to renew the deal on similar terms for a further three years, but this was rejected by HRI, who demanded a doubling in the annual sum paid by Betfair to €2.4m. Betfair said 'no', and since then, the pair have stood off each other.

The move by HRI was highly criticised at the time, with one senior government minister telling the Sunday Independent: "How in the hell can they turn down a single cent at a time when budgets all over the place are being squeezed? Someone needs to take a very quick reality check."

The HRI snub has lost the industry €3.6m in voluntary contributions to date. HRI also took the stance not to allow Betfair to sponsor any Irish races which, it has been estimated, has cost the industry a further €1m over the period. This came to a head before this year's Punchestown Festival when HRI again rejected Betfair's sponsorship offer for the Punchestown Gold Cup.

HRI said that they were not interested in dealing with an offshore online company who don't contribute anything to the exchequer. Yet curiously, Setantabet.com, a white label of Jennings Bet, which operates under that very criteria, were allowed to sponsor a race on the Saturday of the festival.

HRI declined to comment on the BHA-Betfair deal last week but the likelihood is that something will now have to give. If you compare this deal with the deal HRI turned down, the decision by Irish racing's governing body looks even worse.

The deal with Betfair in Ireland was based on 10 per cent of global revenues on Irish racing as against 10.75 per cent of the revenues raised from UK customer activity on UK racing only. It also emerged during the public acrimony in 2009 that the annual payment in 2009 equated to over 50 per cent of their revenues on Irish racing by Irish customers.

In the meantime, Betfair have gone about their business with regards to the ongoing tax legislation issues faced by all online betting operators in the Irish market. The statement given by the exchange last week outlined their plans to become regulated: "We (Betfair) are continuing to work with the relevant government departments on the implementation of a solution that is pro-consumer. We're keen to be licensed and to contribute to the Irish economy in a fair and sustainable manner. It is a matter for government to determine how best to use the proceeds of online betting tax."

Betfair, perhaps strategically, released their Irish sports betting revenue figures last week, which amounted to €10.7m, which would give a projected tax yield of €1.6m. However that is money which will go directly to central coffers and doesn't necessarily mean it will find its way to HRI.

The financial situation HRI are in doesn't need explaining, and they are right to point the finger towards betting duty and the movement offshore as the key factor in the struggle for increased funding. Nevertheless, it now seems an error of judgement to reject the voluntary contribution from Betfair.

The link has been lost and, unlike Britain, we are moving away from bookmaker funding instead of towards it. The BHA, Betfair and all other major bookmaking firms may be in the early stages of their relationship, but here in Ireland, we haven't even got started yet.

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