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DOUBLE THE HORSERACING LEVY, SAYS HRI
Posted 1/27/11 : Association boss warns of the danger of losing the industry
The Irish Times reports that Horse Racing Ireland chief executive Brian Kavanagh has called for a doubling of the horse racing levy, warning that the consequences of not doing so could be serious for the horse breeding industry and the Irish economy.
Kavanagh also proposed that the same betting levy be imposed on offshore operators as those bookmakers operating on Irish soil. Bet on horses now.
The HRI’s position is that the current one percent levy for off-track betting should be doubled – something which bookmakers oppose - and that online betting firms should be swept into the same tax net as their high street cousins.
Kavanagh told the government's agriculture, food and forestry committee that total betting in Ireland quadrupled from Euro 1.3 billion to Euro 4.5 billion from 2001 to 2009, but the return to the Exchequer more than halved to Euro 31 million. He said that the reduction of the betting levy to 1 percent was at the core of the problems facing the equine industry.
“The rate is so low that the bigger betting operators can absorb it as part of their costs while the smaller operators find themselves struggling to pay a turnover tax irrespective of their level of profitability," he said. "The bigger operators also have online betting operations which avoid paying even this 1 percent levy. Online is effectively offshore and even telephone call centres based in Ireland route their calls offshore and thus accrue no duty.”
Kavanagh said the betting levy was introduced in 2001 to finance the industry. It was set at 5 percent and worked well but was progressively reduced to 1 percent in 2006 and the liability transferred from the punter to the bookmaker. Consequently, the Horse and Greyhound Racing Fund had been reduced progressively and had fallen from Euro 76 million in 2008 to Euro 57.2 million this year, which was an unsustainable position from which to develop a key industry.
Kavanagh described the need for action as "urgent," quoting statistics to prove his point that included the 16,500 full-time jobs in the industry, the sector’s value of over Euro 1 billion to the economy and its ability to attract 80,000 visitors annually.
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