Simon Coveney (Cork South Central, Fine Gael)
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Members have asked valid questions which I will answer. Senator Ó Domhnaill makes a comparison between general sports funding to the Irish Sports Council and the funding for the sports of horse racing and greyhound racing. It is important to reinforce the message that horse racing and greyhound racing are not just sports - each is an industry. Some 90% of horses are bred on farms with two mares or fewer. This is about farmers breeding horses, wanting to live the dream of having a winner at Cheltenham or at the Curragh, for example. Deputy Ferris is very committed to the greyhound industry. The people one sees walking country roads, training and breeding dogs, are part of an industry. This industry generates business for those involved in providing animal feed, bedding, housing and veterinary services; in effect, a whole series of contributors to rural economies across the country.

Deputy Ferris referred to Rob Heffernan whom I know quite well. In many ways he has performed a minor miracle by being a world champion - given the financial resources available to him - compared with the competitors he has beaten in the recent world championships in Russia. I agree that elite athletes and sports people are also part of an industry. The actual sport element of horse racing and greyhound racing is only one part of the activity of the sector which the Department funds. We are funding a whole industry which is massive in size.

I recently visited Qatar and the United Arab Emirates. Both of those countries have significant investments in Ireland. Investors are pumping multi-millions of euro into Ireland. They employ large numbers of people in the management of their stud farms which provide further employment in the surrounding areas. Other sporting activities do not result in economic investment in this country. I refer as an example to Sheikh Mohammed who employs over 130 people in his horse breeding activities here. People need to understand the broader picture, that this not just funding sport. They need to understand that many farmers and service providers are linked to the activities of the greyhound industry and the bloodstock industry.

Regarding the amount of funding we are providing, it is important to note that there was a time when the State was spending almost €70 million per year on the horse and greyhound racing fund. In fact, between 2008 and 2012, there was a reduction in funding from €76 million to €56 million. This fairly dramatic reduction of almost a third occurred during a very difficult and dramatic period for the Irish economy and is understandable to a certain extent. However, if we had maintained that level of reduction in expenditure, we would essentially have put Ireland into a second-rate position and probably never would be able to restore us to the premiership of horse racing countries. Investment we have sought to attract would simply have gone elsewhere, and it is very difficult to win such investment back in that situation. We must take into account the levels of reductions we have seen in the fund in recent years, the impact they have had on the industry and the growth we are now seeing in the sector as Ireland begins to recover. We must reinforce that recovery rather than undermine it.

I fully agree with what has been said in regard to online gambling. The preference is to have a self-funding model rather than a situation where the industry is obliged to go to the Exchequer seeking a top-up. Looking back to 2001, the amount paid into the horse and greyhound racing fund was €58 million, which was matched almost exactly by betting revenue to the State. In fact, the objective when the fund was established was that it would essentially be funded by the duty. Since then, however, a decision was made to reduce the rate of betting duty dramatically. This was done for whatever political reasons and presumably because there was a great deal more activity in the industry at the time, the expectation being that revenues would bear up even after the reduction. The duty has reduced from a rate of 10% some years ago to 1% now. As the amount of betting revenue fell as economic activity weakened, we also saw a huge shift online, with more and more people placing bets using their telephones, iPads, computers and so on rather than going into bookie shops.

There are consequences to that change, one of which is that we have fewer bookie shops and less revenue coming through betting duty, because the turnover has been lower. To be fair to the last Government, it started the process of examining whether betting duty might be applied to online remote betting. We have now figured out a way to do so, and the legislation is there to implement it. This additional revenue stream should increase the moneys accruing to the Exchequer from betting duty by between €10 million and €15 million. There is also a political question to consider as to whether we should increase the rate from 1% in the future. That is the direction in which we should be and are going.

There are no longer any tax breaks for stallion fees; that was done away with some time ago. This is an industry that is paying taxes in terms of standing stallions and so on. I take Deputy Martin Ferris's point that the greyhound and horse racing industries are two different types of industries. I am not sure, however, that I would necessarily make the distinction of one being a poor man's industry and the other a rich man's industry. There are plenty of people who do not have large disposable incomes but are passionately committed to the horse racing industry. Likewise, there are many people with very significant incomes who are major supporters of greyhound racing. I understand where the Deputy is coming from, but those types of generalisations do not really stand up. It is true, however, that the international competition for investment in horse racing is perhaps stronger than it is in greyhound racing, which is why we need to maintain an infrastructure and a level of prize money that will serve to ensure the industry does not move elsewhere. That is the major risk in terms of horse racing. The 80:20 split is included in the legislation and cannot be changed without changing the Act. It does guarantee certainty for both industries, which I am sure they welcome.

I agree with the Deputy regarding the online gambling issue, to which I have already referred. We need to go after that revenue aggressively. The idea that people can avoid tax by betting online is not acceptable. The difficulty, of course, is that it is not that easy to collect online taxation, which is an issue that other countries with large racing industries, including Australia, are also examining. We have taken our time to get this done because we want to make sure we get it right. I hope to bring the legislation forward in the coming weeks.