Mr. Neville O'Byrne:

The remarks I will make will address specifically heads of the Bill. As Mr. Egan said, it was common cause from all participants and contributors to this committee that independent regulation was fundamental to the Irish horse racing industry. We have examined these heads principally on the basis that we believe they contain certain proposals which would affect both our independence as an independent regulator and our financial independence. I ask the members to listen to my comments on that basis. We will be happy to expand on any issue at a later stage. We have made a detailed submission to the committee which contains suggestions we would make for changes.

We are fully supportive of any legislation or measure which will improve the regulatory and corporate governance functions of the horse racing industry. For example, we fully appreciate and understand the requirement for greater transparency and accountability for taxpayers' money and in this regard we accept the proposals in the heads that the regulatory body should be audited by the Comptroller and Auditor General. However, we have significant concerns with a number of the heads in the proposed legislation and these are as follows.

We asked that the definition of "integrity services" be amended to include integrity services provided away from the racecourse, for example, stable inspections where we test horses for the use of illegal substances. This is a very important part of the work we do but this change has not been included in the draft scheme.

Registry office functions carried out by HRI, that is, naming horses, horse race entries and declarations etc. have been carried out heretofore in accordance with the rules of racing. This is essential for the orderly running of racing. Head 5, however, proposes that these functions would be controlled by means of HRI directives. This might result in two bodies in Ireland making rules for racing. That does not happen in any other racing jurisdiction in the world and would be completely unworkable. To digress briefly, we made a suggestion that if the drafting of this head was such that it was creating a potential risk that was not intended, it is easy to cure it by simply providing that nothing in this head on the making of directives by HRI will be allowed interfere or override any of the rules we make.

We are making this suggestion on the basis that it is not intended that this directive would have the effect that people think it might.

Head 5 requires Horse Racing Ireland, HRI, to provide a single structure for the administration and financial management of all aspects of Irish horse racing. While the regulatory body is open to the concept of appropriately structured shared services with Horse Racing Ireland, the changes to the general functions of Horse Racing Ireland proposed in head 5 would give an excessive level of control over the regulatory body to the promotional body for the sport and in effect would mean the regulatory body would no longer operate as an independent entity. We also note it is very unclear what is meant in this head by “all aspects of Irish horseracing”. On the face of it, this could include jockeys, owners, trainers, stable staff, racecourses etc. Again, this is another area in which hopefully, the drafting of the head and an amendment to it will remove any issues as to what exactly is affected. The provisions in heads 5 and 11, which relate to licensing income of the regulatory body, if enacted would remove all financial independence from the regulatory body. Even though it is proposed that licence fees paid to HRI would be repaid to the regulatory body, head 11 would require us to consult with HRI before setting licensing fees and we can only assume that the proposal that these fees will be “taken into account” in determining the integrity budget means that the integrity budget will be reduced by the amount of the licensing income. This proposal does not eliminate duplication in any way, shape or form whatsoever and would, as I have stated, remove all financial independence from the regulatory body. Again, I wish to comment on the phrase “taken into account” in the heads. It states that our income, which we make from licensing, would be taken into account in calculating the integrity budget that is given to us each year by HRI. There is no guidance as to what "taken into account" means and we urge that this be clarified when this is considered. We also have a concern that requiring licensees to pay licence fees to HRI would affect the contract between the racing regulatory body and our licensees and potentially could give rise to difficulties in enforcing the rules of racing. Head 5 also provides that point to point horses and participants in point to point racing should register with HRI. The racing regulatory body is fundamentally opposed to this proposal and my colleague, Mr. Michael Hickey, will take up this point in his presentation at a later stage.

Head 11 proposes that while the racing regulatory body will remain solely and independently responsible for the rules of racing, it must consult with HRI on the making and changing of the rules. This would fetter any ability of the regulatory body to make appropriate rules and would mark a significant erosion in the independence of the regulatory body. If I may note in this regard that while the use of the word "consult" seems quite innocuous, in reality we have done a fair amount of research into this and having a statutory obligation to consult places quite serious burdens on us and could place serious delays in the way in which we operate and make rules. We always have informed HRI of when there are rule changes and always have told it that on a non-statutory basis, we are perfectly willing to consult with everyone, provided we are allowed to do our work in a way that we consider best for integrity. To quote the chairman of the Association of Irish Racehorse Owners, “Nobody is solely ... [independent and] responsible for anything if he ... can only do so after consultation”. Finally, we have made a proposal regarding the existing arbitration clause in the 2001 legislation. It provides for the appointment of an arbitrator in the event that the parties cannot agree on an integrity budget in any given year. We have requested that this provision be extended to cover all disputes which may arise between HRI and ourselves from the provision of information to budget issues. This change has not been reflected in the draft general scheme currently under consideration.

While there are aspects of the proposed legislation we would welcome, the draft scheme as currently prepared effectively proposes that the regulator of the sport of horse racing will be accountable to and controlled by the promoter of the sport.

We believe that anything that compromises the independence of the racing regulatory body must be resisted in the best interests of the sport and the industry. We request that any new legislation affecting the industry in Ireland would unequivocally endorse the need for full and independent regulation of the industry by the following: recognising that the regulator has sole responsibility for the integrity of racing; recognising that an effective regulator needs to be independent of commercial factors in carrying out its role; and recognising that the regulator must have financial independence. These principles are in line with the standards the Government is seeking to put, or has put, in place for other regulators in the State. We ask that these principles be reflected in the legislation.

That is a summary of my points. I will be happy to expand upon them and answer any questions at a future stage, if necessary.