Michael Creed (Cork North West, Fine Gael) | Oireachtas source

The horse and greyhound racing industries occupy a key position in the sporting and social landscape. As a nation, we have a strong affinity not just with racing but also with the social scene at its core.

One of the overarching objectives of the Government is to ensure that the horse and greyhound racing industries achieve maximum potential and, in so doing, contribute to economic and social development across a wide geographic swathe of the country. Successive Governments have staunchly supported these industries through legislation and policy initiatives over a long period. The horse and greyhound racing industries have a huge geographic spread and they deliver to the local economy like few others.

These industries receive financial support from the State through the horse and greyhound racing fund under section 12 of the Horse and Greyhound Racing Act 2001. My Department makes payments from the fund to Horse Racing Ireland and Bord na gCon. In the period 2001 to date, a total of €1.12 billion has been paid from the fund to the horse and greyhound racing industries in accordance with the provisions of the Act. The cumulative upper limit on payments from the fund provided under the relevant regulations has, therefore, been reached. Exchequer funding provided from the fund is pivotal to the survival and continued development of the horse and greyhound racing industries. To give effect to the provisions of budget 2018, this cumulative upper limit must be increased by regulation.

The Estimates for my Department, passed by both Houses as part of budget 2018, include an allocation of €80 million for the horse and greyhound racing fund. This will be distributed in accordance with section 12(6) of the Horse and Greyhound Racing Act 2001, with 80% or €64 million going to Horse Racing Ireland and 20% or €16 million going to Bord na gCon. To allow my Department to provide the moneys allocated in budget 2018, it is necessary to comply with the technical requirements under section 12(13) of the Horse and Greyhound Racing Act to increase the cumulative limit on the amount payable from the horse and greyhound racing fund by €80 million to €1.2 billion. This is achieved by way of the regulations submitted to the committee today. The aggregate limit on the horse and greyhound racing fund was increased in this manner in 2004 and in 2009 to 2016, inclusive.

The recent Deloitte report commissioned by HRI indicates that the total direct and stimulated expenditure of the Irish breeding and racing industry is estimated at €1.84 billion in 2016. The report indicates the core industry comprises €914 million of this with secondary expenditure making up the remaining €927 million. In addition, an estimated 15,200 jobs are at the core of the racing and breeding industry or in directly related industries.

The achievements of Irish-bred and Irish-trained horses abroad and the enduring influence of Irish-born jockeys and stable staff underscore Ireland's global prominence. The Irish equine breeding and racing industry is competitive at a global level despite other major racing nations having far larger populations and economies. The horse and greyhound racing fund has been pivotal in shaping the destiny of this dynamic industry. It is noteworthy that the Irish thoroughbred breeding industry has developed from an essentially amateur cottage industry pre-1969 to a position in which Ireland now is one of the leading bloodstock producing nations in the world. The industry produces close to half of all thoroughbreds in Europe. We hold the distinguished position of being the third-highest producer of foals coupled with having the third-highest number of active brood mares in the world.

Government funding is crucial to maintain and build on our position as one of the world's leading breeding and racing nations. Government funding of this industry is an excellent opportunity to yield a high return for this investment leading to a flow of income right through the economy. Support for certain strategic industries is important for future economic growth and can provide widespread benefits for our society and economy.

The greyhound industry is a significant industry for Ireland. It has been embedded in Irish society for decades and is an important activity from an economic, social and cultural perspective. It provides and supports considerable employment directly and indirectly throughout the country. The Irish greyhound sector has come through challenging times during the economic recession but it continues to make a significant economic and financial contribution to the Irish economy, especially at local level. The Bord na gCon annual reports indicate that, despite a severe recession, the industry is recovering and showed an increase in operating surplus in 2015 and 2016. The industry remains significant for the economy and has the potential to grow with the necessary investment in facilities and support infrastructure. Funds generated from racing are re-invested in the industry through contributions to prize money and grants to various bodies involved in the greyhound racing and breeding sector, as well as promotion of greyhound welfare and the regulation of the industry. The funding provided to the greyhound racing sector helps to sustain a long-standing tradition as the industry is part of the social fabric of our country. This funding underpins economic activity in what are, in many instances, less affluent regions of the country. It has also contributed significantly to the improved facilities now available at greyhound tracks throughout Ireland. Greyhound racing is an activity that is inextricably linked to the farming community. While it is undoubtedly part of the fabric of rural Ireland, it also enjoys a strong urban base.

The advent of new technologies and business models has challenged the Government to re-evaluate the funding mechanisms for the industry. As part of its overall commitment to the industry, the Government has addressed, through legislation, the anomaly whereby remote and online betting operators were outside the tax net. The Betting (Amendment) Act 2015 came into force on 15 April 2015. The Act brings betting exchanges and Internet and mobile betting providers within the scope of the existing licensing regime and extends the existing 1% turnover tax on land-based bookmaking activities to online and mobile bookmakers. The Act also means that a 15% commission tax for betting exchanges has been implemented. These measures have had a positive effect on revenue streams with significant increases being realised. It is worth noting that betting tax has increased from a total of €31 million for 2015 to €51 million in 2016.

The Horse Racing Ireland Act 2016, which gives effect to the recommendations in the Indecon report, came into force on 8 February 2016 with certain sections commenced on 9 March 2016 and January 2017. The Act introduced a range of improvements in governance and accountability arrangements, many of which derive from recommendations made by Indecon International Economic Consultants following a review of the sector. Indecon International Economic Consultants was also commissioned to conduct a review of certain matters relating to Bord na gCon to assess the suitability of the legal, governance and regulatory framework supporting the greyhound industry and to identify opportunities to maximise its commercial income.

In response to the recommendations made in the Indecon and Morris reports, as well as in the report prepared by this committee, chaired at the time by my colleague, the Minister of State at the Department of Agriculture, Food and the Marine, Deputy Doyle, I have introduced a draft general scheme of the greyhound industry Bill. The Bill will address the governance of Bord na gCon. It will strengthen regulatory controls in the industry. It will modernise sanctions and improve integrity with a view to building a reputation for exceptional regulation in the sector. As members are aware, the draft general scheme has progressed through the pre-legislative scrutiny phase and a memorandum will go to Government in the coming weeks requesting approval to publish the updated general scheme and to submit it to the Office of Parliamentary Counsel for drafting. In this regard, I wish to extend my thanks to the members of the committee for their thorough and thoughtful deliberations during the pre-legislative scrutiny process. I believe the Bill will bolster the Irish greyhound industry, enable it to deal with existing challenges and maximise its future potential.

I am sure we are all in agreement that more balanced regional economic growth is desirable and this is a key priority for Government. In this context, these industries should be given recognition for the considerable contribution they make to rural economic activity and employment. Their activities are spread throughout rural areas and can be credited with enhancing the social fabric of rural Ireland. Local stadia are a focal point for supporting economic, social and cultural needs. Point-to-point meetings take place at 70 locations throughout the island, contributing significantly to many rural communities.

Horse and greyhound racing compete in a number of different economic arenas, including sport and hospitality and in a diverse betting arena. Therefore, their collective reach throughout the economy is extensive and significant, reaching almost every county. The important contribution made by the horse and greyhound racing fund since its inception in 2001 has been vital to ensuring that these industries can continue to invest in infrastructure, whether through continuing the programme of capital investment in racecourses, ensuring prize money remains competitive or education and development of their skilled workforces.

Section 12(13) of the Horse and Greyhound Racing Act 2001 provides that a draft of these regulations be laid before both Houses of the Oireachtas and a resolution approving the draft be passed by each House before the regulations are made by the Minister. Accordingly, I seek the support of all committee members to ensure that Horse Racing Ireland and Bord na gCon receive the funding provided for in budget 2018 and that the important role played by these industries, as well as the economic activity generated by them, are sustained in future.

I acknowledge the contribution that members of this committee have made to the debate on the future of these critically important industries. I commend these regulations to the committee and I look forward to discussing any matters arising.