Still some way to go
The headline on the front of the Racing Post on Friday was definitive: 'Government bill to secure revenue across the whole betting spectrum', it said of the publication the previous day of the long-awaited proposals to update the country's betting laws.
There were no real surprises in the bill published by the Department of Finance, with the possible exception of a sweetener for the bookmakers in the form of longer opening hours and the overdue removal of the ban on betting shops opening on Easter Sunday.
As expected, betting exchanges and online operators will now require a licence to take or lay bets in Ireland, and the one per cent betting duty will be extended to include online and offshore bookmakers while online betting exchanges will be liable for a 15 per cent gross profit tax.
These were all well flagged, as was the fact that there are flaws in this approach too because it is not certain that it will maximise the tax take on gambling.
Clearly, something had to be done -- in 2001, betting tax returned almost €70m to the State but that fell to under €30m last year -- as traditional forms of gambling have been overtaken by online options, most of which are based offshore and so outside the tax net. At least that will no longer be the case, as all bets placed in Ireland will be liable to tax.
However, the assertion in the Racing Post that 'Irish racing must await decisions from government as to how the extra revenue generated can benefit the industry' is missing the point, as any extra revenue will have to be used to plug the huge gap between what the State takes in from betting and what it pays out to the industry.
The government wants to see a situation where the racing industry is self-financing, or at least that it can be secured through the tax take on betting. The Horse and Greyhound Racing Fund this year is due to receive €56m but one recent report, produced by Pricewaterhouse Coopers, estimated that based on current levels of betting the Exchequer would take in just under €50m. The racing industry argues, strongly, that it cannot afford to have its budget cut further, having received over €75m from the State at its height.
It will be interesting to see what, if any, amendments there are to the bill before it is enacted some time before the end of this year.
Sunday Indo Sport