Andrew Doyle (Wicklow, Fine Gael)
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I have received apologies from Deputies Martin Ferris, Michael McNamara, Éamon Ó Cuív and Willie Penrose. We are here to discuss the heads of the Horse Racing Ireland (Amendment) Bill 2014 and we are at the pre-legislative scrutiny stage.

Before we begin, I remind members, witnesses and all observers in the Visitors Gallery to turn off their mobile phones or set them to airplane mode as interference by mobile phones negatively affects the broadcast. This meeting is being carried live on Oireachtas channel, UPC 207. Today we resume our engagement with stakeholders on the general scheme of the Horse Racing Ireland (Amendment) Bill, which was referred to the committee by the Minister for Agriculture, Food and the Marine and for Defence, Deputy Simon Coveney, for pre-legislative scrutiny. Today's meeting will be conducted in two sessions. During session A we will hear from representatives of Bord na gCon, the Association of Irish Racecourses and the Racegoers Consultative Forum. During session B we will hear from representatives of the Irish Turf Club.

From Bord na gCon I welcome Mr. Phil Meaney, chairman, and Ms Geraldine Larkin, chief executive. From the Association of Irish Racecourses we have Mr. John Moloney, chairman, and Mr. Paddy Walsh, chief executive. From the Racegoers Consultative Forum I welcome Mr. Jimmy Cox, Ms Joan Widger and Mr. Jack Nagle. I thank all the witnesses for coming before the committee today to discuss the general scheme and for their submissions supplied prior to the meeting. Each group will be invited to make an opening statement of a maximum of ten minutes followed by questions from the members present.

Before beginning I draw the attention of all witnesses to the position in regard to privilege. Witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

I will call the witnesses in the order in which I welcomed them to the committee meeting. I understand Mr. Meaney will make the opening statement on behalf of Bord na gCon.

Mr. Phil Meaney:

I am very pleased to have the opportunity to meet the members of the Oireachtas Joint Committee on Agriculture, Food and the Marine. Bord na gCon has been invited here to discuss draft amendments contained in the Horse Racing Ireland (amendment) Bill 2014. These amendments arise largely due to the Indecon report into the horse racing industry. Horse Racing Ireland, HRI, and the Irish Greyhound Board, IGB, are joined as a party to the amendments. We are ad idemin terms of the objective of the draft general scheme, which is directed towards the provision of enhanced control and accountability. The board understands the need for enhanced control and accountability in any body that receives public funding. It has no issue with the proposed ministerial sanction that would allow for the withholding of funding instalments from the IGB if the Minister is dissatisfied with the board's plans, strategic or otherwise.
The IGB is preparing a response to the Indecon review of the greyhound industry and the work of the board, and it will be submitted in the coming weeks. We will return here to discuss with the committee our response to the Indecon report after our submission to the Minister is made.

It is likely that the Indecon report - and our response to it - may in time necessitate certain legislative changes, which, if invited to do so, we will return to discuss with members.

There is no doubt that the Indecon report is a seminal document on an industry that is in transition in many respects. Greyhound racing has been particularly exposed to the consequences of the recession and the severe reduction in disposable income in recent years. It is clear that the current climate has impacted very negatively on racing attendances and, more importantly, customer spend levels at our stadia. The challenge for the board is to take into account the key findings of the Indecon report and create a workable operational programme to address the issues raised. We need to consolidate our existing audiences and customers but also to look to a younger demographic and new markets.

Although the matter may not fall within the committee's specific remit, I am of the view that there is an important discussion to be had on betting tax, the poor return to the Exchequer arising from current tax levels and the tax-free operation of online wagering. We live in a digital age wagering will increasingly become an online phenomenon and to fail to ensure that this activity does not make a significant contribution through betting tax is not sustainable. Changes in this regard would help to ensure that a proportionate contribution to the Exchequer is made and reduce the net reliance of greyhound racing on the horse and greyhound fund.

Ms Geraldine Larkin:

I thank the Chairman and members for inviting Bord na gCon to participate in the committee's consideration of the draft heads of the Horse Racing Ireland (amendment) Bill 2014. I took up the position of chief executive of Bord na gCon just this summer and I welcome the opportunity to meet the committee for the first time.

This committee, perhaps more than most, is aware of the geographically dispersed significance of the greyhound industry, which currently employs several thousand people. Some of the specific provisions referenced in the draft scheme of the Horse Racing Ireland (amendment) Bill, which is the focus of today’s meeting, have a particular resonance at this time for the Irish Greyhound Board. The challenges facing the board and the greyhound industry have been very well documented, most recently, as the Chairman mentioned, in the Indecon report. The board believes that the report can make a very significant contribution to the re-energising and restructuring of the greyhound industry in order to ensure its long-term sustainability. The report will be of assistance in developing an organisational culture that will deliver excellence across finance, governance and racing integrity and contribute to the improvement of animal welfare.

Bord na gCon is charged with the improvement and development of the greyhound industry and is determined to do this. As chief executive, I am aware that a radical new direction is required if the industry is to have a viable future. This involves everything that impacts on both our business and our manner of doing business. There are some very serious challenges ahead for Bord na gCon and these would not want to be underestimated. Already, the board has taken the difficult step - from 1 September last - of reversing the decision taken in 2012 to increase prize money. There are other difficult decisions to be made and some of these will not be easy for various interests within the industry whose priorities have never been easily reconcilable. My ultimate objective at this time is to put our operations on a firm financial footing in order to ensure the long term viability of the industry.

Bord na gCon operates in a very crowded entertainment space and none of us can be complacent with regard to how rapidly that space is changing and how challenging is that change for long-established recreational and sporting activities such as ours. That said, we have an excellent infrastructure and a world-renowned racing product. The board is focused on the changing consumption patterns of our customers and those who wager on our racing. That is why there will be such an emphasis on online streaming into the future, particularly because this can redefine the reach and commercial possibilities for Irish greyhound racing both internationally and nationally.

Mr. John Moloney:

I thank the Chairman and members for affording Mr. Paddy Walsh, CEO of the Association of Irish Racecourses, AIR, and I the opportunity to make a presentation on the general scheme of the Horse Racing Ireland (amendment) Bill 2014. I have been chairman of AIR for the past four years and served as its vice chairman for the 12 years prior to that.

We represent all 26 racecourses, two of which are in Northern Ireland. I represent the Association of Irish Racecourses, AIR, on the board of Horse Racing Ireland, of which I am a member of the finance committee, chairman of the media rights committee and also a member of the fixtures and programmes committee. I am also a member of the Turf Club and the Irish National Hunt Steeplechase, INHS, Committee, I am vice chairman of the appeals committee and for the past 25 years I have been the manager of Galway racecourse. Thankfully, we had a very successful meeting at Galway this year. The Galway Races contribute in the region of €60 million to the economy of Galway city and county annually. My interest in horse racing stretches back over 50 years. I have been involved in breeding and the horse racing industry all my life. I will hand over to our chief executive, Paddy Walsh, who will go through our submission and answer any questions the members may have.

Mr. Paddy Walsh:

I am the chief executive of the Association of Irish Racecourses and have held that position for just over ten years. I do not propose to read through the whole submission but a very brief synopsis of it might be appropriate. We have confined our comments in our submission to the issues directly affecting racecourses as we believe it is more appropriate for other sectors within the industry to comment on aspects of the proposed legislation that might affect their areas of operation and expertise. We note, however, that a significant amount of proposed legislation relates to the Racing Regulatory Body, and while not wishing to comment specifically on such proposals, we would like to stress the importance of the overall funding of the industry for the integrity of racing to be, and to be seen to be, both independent and meeting the highest international standards.

Turning to our submission, initially we have outlined the role of the AIR within the racing industry and its importance thereto. We also circulated copies of a report prepared by Petrus Consulting last year that showed the financial contribution racecourses make to the overall racing industry and commented on the financial status and standing of those racecourses. The key points to take from that report are that the racing industry is a very capital intensive one and racecourses have invested appropriately €270 million in the business during the past 15 years. Racecourses also contribute to rural employment and contribute approximately €5 million in annual taxes, rates and local authority charges.

Our income during recent years has remained collectively reasonably static at about €42 million per annum. While we have been quite successful in achieving increases in income from media rights, other areas of income have fallen, reflecting the general economic recession and so on, with the net result that our overall income has remained reasonably static. Petrus Consulting estimates that this level of profit represents a return on capital employed of about 1.75%. Essentially, that is insufficient to fund the capital development costs of about €116 million that we believe will be required over the next 15 years to maintain the current standard of facilities. The key point to be taken from that is that racecourses reinvest all their profits back into the business, and even by doing so, unless we maintain the current levels of income and cap the current level of costs at their existing levels, the net infrastructure that racecourses provide for the rest of the industry will suffer over the next few years.

We move on in our submission to deal with the specific heads of agreement that have been circulated and I will go through those briefly and comment on them in the order in which they appear in the heads rather than in any order of importance. The first head I would comment on is head 4 where it covers membership of the HRI board. We believe because of our importance to the industry that the racecourses should have at least one seat on that board. Our only other comment in that respect is that in the event of our having only one seat, we believe - this would perhaps apply also to other bodies which only have one seat on the board - that there should be some provision for a proxy to attend on days when people cannot be present. That would be very important where a particular issue that might be relevant to their area may be being discussed.

Under head 5, where we comment on the amendment of the general functions of Horse Racing Ireland, there was a proposal concluded therein to include among the general functions of HRI the financial management of all aspects of Irish horse racing.

We consider that to be a little broad. Perhaps it would be possible to interpret it as giving control to HRI over some or all aspects of the independent finances of racecourses. In view of the sensitivities of same, as outlined in the Petrus report, we would suggest that racecourse finances should be excluded from that definition.
The proposed section 10(1)(g) includes among the functions of HRI the operation of racecourses which are owned or leased by companies under the control of HRI. We accept this largely reflects the status quoand we simply highlight the need for HRI to ensure there is no conflict of interest when it comes to allocating fixtures, programmes, grants, and racecourse authorisation when it is dealing with its own racecourses.
The next section, namely, section 10(1)(m), concerns one of the more serious points we have. There is reference to including in the general functions of HRI the right to the negotiation of all income from media rights. We have always had some concern over the legality of Horse Racing Ireland being empowered to negotiate income from rights that are clearly owned by a third party, namely, the racecourses themselves, but in practice, to date the negotiation of such rights has been jointly done by representatives of both HRI and the AIR on behalf of its racecourses. However, our legal advisers have informed us that while it is obviously acceptable that HRI should number among its functions the negotiation of rights owned by itself, it is not appropriate for it to have a legal right to negotiate income from rights owned by AIR. Section 61(2) of the IHA Act 1994 states that the property rights in relation to any broadcast of a race fixture or any photograph of it or sound recording taken or made for commercial purpose at a race fixture shall vest in the executive of the authorised racecourse concerned.
Since we made our original submission we have also obtained further legal advice on both the existing and proposed legislation in so far as it affects media rights in particular. The advice has indicated that there are some grey areas in both the current and proposed legislation as regards the specific definition of media rights. We have also been advised that, as the current-proposed legislation allows HRI to effectively negotiate income from media rights owned by racecourses it might be unconstitutional on the basis that the statutory provisions constitute disproportionate limitations on the property rights of racecourse owners which are protected under Articles 40.3.2° and 43 of the Constitution. We ask that the committee would recommend that prior to the finalisation of the relevant legislation this area might be revisited to clarify any anomalies to ensure that racecourses have the legal right to collectively negotiate income from media rights that they own and to avoid any possibility of a constitutional challenge. In particular, we would like to see that media rights are clearly defined and confirmed as property rights of HRI in the case of data and of racecourses in the case of all other media rights. We would like to see a specific right for racecourses to negotiate collectively in order to maximise income from their media rights and we would like to see that if all such rights are to be negotiated through the HRI media rights committee it is essential that racecourses are adequately represented on the committee. We would be happy to provide, through our legal advisers, suggested wording for proposed legislation if it was agreed to give effect to those points.
On head 6 of the legislation which deals with committees, the first one is the proposed section 19(6 )that deals with the race fixtures committee. In practice, that would mean the size of the committee would be reduced from seven members to five members. The racecourses currently have two representatives on the committee. We have two members out of seven and the proposal would essentially mean that the racecourse representatives would be down to one out of five. Our proportionate representation would be reduced from 30% down to 20%. The reason for that is at the moment membership of the race fixtures committee is open to non-members of HRI but under the proposed legislation that would not be the case and therefore as we only have one representative on the HRI board we could only have one representative on the fixtures committee.

Fixtures are the lifeblood of every racecourse and any changes to those fixtures would have a significant effect on the finances of a particular racecourse. Most racecourses only race 12 or fewer times per annum so the loss of even one fixture to a racecourse can have a significant effect on its economic performance and obviously is of great concern to it. It is on that basis, therefore, that we seek to have our representation on that committee maintained at least at its current percentage level.

On the proposed substitution of section 20 of the 1994 Act, we believe that may result, whether intended or otherwise, in the race programme committee established by the 1994 Act ceasing to exist. The race programme overseen by the committee deals with the category prizes, conditions and the number of races at each race fixture, so it is clear that it has a very important role in the compilation of the race programme. I think all parties would agree that the current programmes committee has worked extremely well, with input from all the relevant groups, and we would like to see that committee continue to be provided for in the legislation.

To go back to the role of the media rights committee, the suggestion is that its membership would increase from three to five people. Currently, we have one representative, who is the chairman of that three-man committee. The proposal is to make it a five-man committee and we suggest that we should maintain at least our percentage representation on that. To do so, we would have to have a situation in which people other than those members of the Horse Racing Ireland board could be appointed to that committee. We would like to see that happen. That would then make all the committees of the new body the same in so far as the composition could encompass people who are not members of the HRI board.

Head 14 refers to the rules of racing, and section 14(8) states that the racing regulatory body shall establish and publish procedures with regard to granting of racecourse licences. While we respect that power and are happy enough with it, we believe it might be helpful to the overall process if the racing regulatory body were required to consult with racecourses in advance of establishing and publishing any such procedures. We believe that might help in the overall scheme of things.

To refer briefly to overall industry funding, the Bill does not really deal with that, but we believe the separate legislation being processed in regard to betting tax and so on will be very helpful to the industry. The long-term funding of the industry is of major concern to us, because without a definitive funding mechanism in place it is very difficult for us to do any long-term planning. That will apply whether it is Horse Racing Ireland, the Turf Club or any of the other bodies and sectors within the industry.

Essentially, that is our submission. We simply request that the committee give its support to the suggested amendments to the legislation that I outlined in section 3 of our submission. If I can answer any questions that members might have in due course, I will be more than happy to.

Andrew Doyle (Wicklow, Fine Gael)
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I thank Mr. Walsh. I invite Mr. Cox from the Racegoers' Consultative Forum to make his submission.

Mr. Jimmy Cox:

Chairman, Deputies, Senators and distinguished guests, the Racegoers' Consultative Forum has been invited to make a submission to the Oireachtas Joint Committee on Agriculture, Food and the Marine on the heads of the Horse Racing Ireland (amendment) Bill 2014. The forum is represented here by Joan Widger, Jack Nagle and myself to present this submission following consultation, discussion and input with all the forum members.

People ask the question: what is the Racegoers' Consultative Forum? The Racegoers' Consultative Forum is a statutory committee established under section 9 of the Horse and Greyhound Racing Act 2001 - refer to Appendix 1 - to represent the views of racegoers to the board of Horse Racing Ireland. Facilitated by Horse Racing Ireland, the forum has 14 members, including two ministerial appointments. It has formal meetings every quarter, attended by senior executives of HRI, and our meetings are chaired by a HRI board member who conveys our views to the board.

The forum is made up of racegoers around the country from different regions, of different ages and from all walks of life. The aim of the forum is to improve the race-going experience for both new and regular racegoers alike. The forum is a voluntary group of people with a keen interest in horse racing. The members present written reports to the forum on race meetings they have attended. They maintain a close relationship with the executives of racecourses in their designated area. The forum also adjudicates on the Racecourse of the Year awards and provides valuable feedback to the executive of Horse Racing Ireland on any new initiative proposed or matter raised. The group is, therefore, a key voice for racegoers. The forum was also represented on a recent marketing strategy group for racing.

As everyone is aware, the racing industry is one of Ireland's highly successful indigenous stories, which generates direct employment of more than 16,000 people and contributes more than €1.1 billion to the economy. This employment is mainly spread across rural communities, thereby fulfilling a key social, as well as an economic, benefit to society. Racegoers form an integral part of Irish racing as evidenced by the fact that in 2013, attendance at 349 race meetings throughout Ireland was 1.24 million people, which included more than 80,000 foreign tourists. We split racegoers into three broad categories, the first being horse racing enthusiasts, including those involved in the industry and regular racegoers. The second category comprises punters or the betting public, that is, racegoers whose main interest is in the betting aspect of racing. Third, the social racegoers represent people who attend race meetings as part of wider social events such as the annual Galway, Punchestown and Leopardstown festivals, as well as the Listowel festival this week. The attendance this year at Galway was 149,000 racegoers, who contributed an estimated €60 million to the local economy, and total betting turnover there was €14.5 million. The attendance at Punchestown in 2014 was 107,000 racegoers, with an estimated contribution of €50 million to the local economy and a betting turnover of €9.3 million. This week, approximately 88,000 people will pass through the gates of the Listowel event, which is more than will attend the all-Ireland final, and the turnover in betting last year was approximately €5 million. While these numbers are impressive, attendance at ordinary meetings has fallen. Total on-course betting has decreased from €180 million to €132 million over the past five years. Any adverse movement in betting tax or a lack of improvement in basic facilities at racecourses will have a serious impact on these figures. Interestingly, the income from media rights is propping up many racecourse finances. However, in a recent financial statement Ladbrokes plc stated that horse racing as a product is continuing to decline. While the cost to it of racing is rising, the racing industry continues to pursue strategies to increase the return from betting. Everyone is also well aware of the shift to betting online in every sport, including football, rugby, soccer and golf in play to the final putt, which is attracting the younger generation who are racing clients of the future.

The forum aims to represent the views and interests of all racegoers and while we are supportive of the plans to implement the recommendations of the Indecon report and the proposals outlined in the Horse Racing Ireland (amendment) Bill 2014, we wish to highlight to the joint committee the following specific areas of our concern. As for head 4 on membership of the HRI, given the pivotal importance that racegoers have on the economic viability of the industry, the forum recommends strongly that there should be a place for a racegoer representative on the HRI board.

This representative would be selected from among members of the forum by members of the forum for appointment by the Minister in accordance with head 4, appropriately amended. This would provide a stronger voice for racegoers on the board of HRI than exists at present.

Head 5 covers the amendment of general functions of HRI. In consolidating the administrative and financial management of all aspects of Irish horseracing, including the integrity of services, appropriate steps and measures should be put in place to ensure that all services provided to racegoers are to an agreed high standard. These standards are to be upheld at all racecourses so as to promote and develop racegoers' attendance at track meetings.

Head 15 deals with the horse and greyhound fund. We recommend that part of this fund be ring-fenced to go to capital funding to enhance racecourse facilities right across the country, so that over time racegoers can experience a good quality and consistent standard from all racecourses.

We have a proposal from the forum for additional changes to the existing legislation. As regards the Racegoers' Consultative Forum itself, given the importance of a strong voice for racegoers, we wish to make a number of proposed recommendations to the statutory Act, such that the forum will have a clearer, more transparent and public role in supporting and promoting racegoers. With this in mind we propose that section 9 of the Horse and Greyhound Racing Act 2001, pertaining to the forum and as detailed in appendix 1, be amended in line with the specifics of appendix 2 in this submission. The detailed rationale for those changes is set out in the explanatory notes in appendix 2.

In summary, the purpose of these changes is to make the work of the forum more effective, to give a stronger voice to racegoers, and to ensure that its views and recommendations to improve the experience of racegoers can be more fully taken into account and be responded to appropriately by the relevant sections of the industry.

I will now deal with the betting tax. We are fully aware that the legislation before the joint committee does not directly concern the taxation on betting. We are also aware that separate legislation, the Betting (Amendment) Bill 2013, has just gone through Report and Final Stages in the House. However, the forum notes that the debate on betting tax has arisen in the committee's work.

The forum wishes to support the development of a sustainable self-financing model for the horseracing industry. However, this shall not be at the expense of the betting public. We are concerned that any general tax levied on betting and the betting public could have a detrimental effect on betting and racegoer attendances. Given the connection that this has to the horse and greyhound fund, we recommend that any future levy, after the Bill, should not apply on the track at the racecourse. This will support the development of racegoer attendances and protect in particular the betting public's attendance at the racetrack.

We thank the joint committee for giving us an opportunity to provide feedback on the Bill on behalf of all members of the forum and, indeed, all racegoers. We are asking the joint committee in its report to the Minister on the general scheme to support the proposals in our submission for amendments to the legislation. These would first, include provision for a forum member on the board of HRI and second, incorporate the changes to section 9 of the Horse and Greyhound Racing Act 2001 as set out in appendix 2 of this submission.

We thank the committee members for their attention and would welcome any questions or clarification required on any aspect of our submission.

Andrew Doyle (Wicklow, Fine Gael)
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Thank you Mr. Cox. We have three comprehensive presentations. I ask members to take their questions in order, starting with Bord na gCon and then going to the racecourses' and racegoers' representatives. Does any member wish to pose a question to Bord na gCon? I call Deputy Heydon.

Martin Heydon (Kildare South, Fine Gael)
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I thank the groups for their very detailed presentations. They have obviously all put considerable work into them and brought their experience of their relevant industries to the table, which is what this pre-legislative stage is all about. I start with Mr. Phil Meaney and Ms Geraldine Larkin's presentation on behalf of Bord na gCon. We spent a great deal of time in the committee recently discussing horse racing and the importance of it to the economy and rural Ireland. Similarly, if on a slightly different scale, the greyhound industry employs a great many people and creates economic activity. It is a key component of the horse and greyhound fund. Plenty of jobs in my constituency, Kildare South, are provided directly and indirectly by the greyhound industry.

Mr. Meaney touched on necessary enhanced controls and referred to accountability. That is important to all sectors as we strive to ensure that every sector is transparent and to move on that. Bord na gCon has its own Indecon report and we will have to deal with that in future and ensure, as is happening with the racing industry, that our structures are as good as they can be and that we future proof the industry. The greyhound industry is key and has the potential to grow. It has its problems, on which we all must work together to solve them. I do not have any direct questions for now and look forward to having the witnesses in when we get to deal with the Indecon report and working with the industry.

Anthony Lawlor (Kildare North, Fine Gael)
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I congratulate Bord na gCon on an excellent weekend. It had a very successful Irish derby on Saturday with great crowds. There seemed to be a great buzz around the place. Deputy Heydon will know that a Kildare man won the consolation derby, which was nice to see. Later on in the year, it is the betting side of things that will be important from Bord na gCon's perspective, in particular how we organise and get the betting tax. As the witnesses stated clearly, there is a great deal of money that is not being taxed from a betting perspective. I congratulate Bord na gCon on the tote and the way it has been operated. It is a positive input into the greyhound industry. I am delighted to see the witnesses here today and congratulate them on a very successful weekend. I have been to a number of their tracks around the country and know many people involved, not only on the greyhound side but also in coursing who are very successful. I wish Bord na gCon the best of luck in future.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I also welcome Mr. Phil Meaney and Ms Geraldine Larkin and thank them for their opening statement. I have brief comment on the funding going forward and the structures of Bord na gCon. Do the witnesses have any comment on how they may acquire funding to operate facilities throughout the country in future? To attract people to a sport, one needs to have updated facilities. Some facilities have been run down in recent years, but that is no disrespect to anywhere. The betting tax has been mentioned as an issue in respect of running the industry in general. Regarding the upgrading of facilities from a capital point of view, however, do the witnesses have any views on how funds can be raised? The Indecon report will be discussed later and we may touch on that in general.

Mr. Phil Meaney:

We were very lucky that we had invested heavily in our facilities and stadia before the economy collapsed. In general, we have good facilities and infrastructure. With the passing of four or five years, the time has certainly come when facilities need a facelift. There are a few areas where we should invest. My neighbours in Kilkenny have a very good tourist city, but the facilities there are poor. It is certainly an area that needs investment. We need to develop the areas we will be looking at for income. Our tote has dropped down in recent years and we are working strongly to build it back up.

This will happen as disposable incomes increase. We are also pushing the sale of our products internationally, from which we would expect to get a good result. We are a little bit behind schedule for several reasons, but we expect to get a good income from the area.

The 30% reduction in the Horse and Greyhound Fund over the past several years has had a negative effect on our resources and our ability to invest in stadiums. Hopefully, we will be able to counter this with the stabilising of the fund, the increase in commingling arrangements for broadcasting and selling our media rights. It is interesting to hear our colleagues on the horse-racing side describe how important the sale of media rights is to them. We have sold the media rights for races out of Shelbourne Park but we need to develop it across the country. We are a bit behind schedule but it is in an area on which we are focusing.

Andrew Doyle (Wicklow, Fine Gael)
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That is a wider issue to which we can return. On behalf of the committee, I wish Ms Geraldine Larkin well in her appointment as chief executive of the Irish Greyhound Board. The committee is scheduled to meet with her at the end of the next month to discuss the Indecon report on the greyhound industry.

Is it correct that the board is not dissatisfied with the general workings of the proposed head 15?

Mr. Phil Meaney:

Yes.

Pat O'Neill (Fine Gael)
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The committee has met other groups on the Horse Racing Ireland (amendment) Bill. The main contention with all groups is how the board will be made up and which groups will have representation on it. Will the witnesses explain further why they feel it necessary that they should have representation on the board and, particularly, on its committees, which will make many recommendations to the board? Will they explain from which parties they feel the committees should be made up?

Thomas Pringle (Donegal South West, Independent)
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Every group that has attended the committee on this Bill has sought representation on the proposed new board of Horse Racing Ireland. Will the delegations explain how effective the current board is? Are there any instances in which they feel it is not representative of the interested parties in the industry?

Regarding head 5 and the negotiation of media rights resting solely with the board of Horse Racing Ireland, have the delegations raised this with the Department? Has there been any response from the Department on this provision?

Martin Heydon (Kildare South, Fine Gael)
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The Petrus Consulting report, which highlighted how racecourses are not generating sufficient profits to fund necessary development to maintain current infrastructure in the future, was mentioned. Reductions in the Horse and Greyhound Fund have taken their toll, but the Government has worked hard to maintain funding levels, knowing that previous reductions cut to the bone.

The new media rights deal has been quite lucrative and one from which racecourses have got significant income. However, it does not necessarily mean that extra people are attending race meetings and it does not put an onus on the racecourses to get extra punters in through the gate.

The HRI has its role to play from a marketing point of view but what efforts have individual racecourses made to try to increase that? It possibly ties in with Mr. Cox's presentation around the experience of the punter. He or she does not have the same experience if not many people are there. I know we have industry days but we also have some excellent days out such as one we experienced last weekend where the buzz is present. When one gets the big crowd in, it leads on to that "feel good" factor and racecourses have other ways of getting income if they get them through the door. What efforts are being made by the association and the racecourses in this regard? Every sector is doing more with less and trying to improve its figures.
I take on board Mr. Walsh's points regarding a proxy for a member. My colleagues have made comments previously and I think every group that has been in here has raised the point regarding membership of the board, which is something for us to consider. The proxy seems to be valid point, particularly in light of the fact that the association's representative will invariably be a busy manager of a racecourse and have other constraints as well.
Mr. Walsh spoke about the conflict of interest and how the status quo is maintained. My next question, which is perhaps a difficult one to answer, concerns a conflict of interest. We raised it previously with HRI. It has been a necessary for HRI to step in and play a role in the management of some racecourses. As an ongoing long-term plan, it is ideal for HRI to have control over four or five racecourses? How does this dynamic work with other racecourses and has the association experienced a conflict of interest in the past? Is that something that this committee needs to be mindful of?
Mr. Walsh spoke about media rights. We have had the jockeys in here previously who would have staked a claim to media rights. In his presentation, Mr. Walsh has been very matter-of-fact that racecourses own the media rights and that HRI could be open to challenge on that and that if passed, this legislation could be open to challenge. Do others outside the racecourses have an entitlement to media rights? What is the view of the association on that and previous submissions here? What is its response to those who argue that perhaps racecourses should not have exclusive access to media rights?
I take on board the association's comments about the membership of committees such as the race fixtures committee and the race programme committee looking like it would fall. It appears that the move is to regularise all of the subcommittees going from seven to five and then from three to five. One can see that. The association is looking, as is its right, at how that impacts on its role in that and the chairmanship it had. That is plenty for us to consider.

Anthony Lawlor (Kildare North, Fine Gael)
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I thank the witnesses for their presentation. Looking from the outside, the association is providing the facilities. Some of the tracks are excellent. I attended them as a young fellow when the Lawlors were catering around the country in a good number of tracks and latterly as an enjoyer of the facilities provided. In fairness, some of the tracks have made a huge effort to get as many punters, as Mr. Cox would call them, through the gate to use the facilities. Certain tracks have used the funding available from the Government to improve their facilities.

With regard to the grants, what percentage does each race track have to provide to get a grant? Is the amount from the State 50-50 or 60-40? Who decides which race tracks get grants if every race track puts in an application? At the end of the day, who decides who gets the grants? Do some of the HRI tracks need to provide funding from their own sources rather than another source within HRI? I am trying to see that all tracks are treated fairly rather than some tracks being treated differently.

I am a bit concerned about the control HRI might have over the fixtures. I appreciate the fact that the association has a fair say in the fixtures.

That is important. I am concerned, however, that it is a carrot-and-stick situation. If a racecourse does not comply with what the HRI says, the stick is that it will lose a fixture, which is a vital source of funding. Is this being applied equally across the sector?

Have racecourses investigated alternative sources of funding? Every time I watch the races, I see that the starting gates are sponsored by Tote Ireland. That is ridiculous. As Tote Ireland is owned by HRI, funding is only being pushed from one source to another. Are racecourses allowed to pursue outside sources of funding, or is this strictly under the ownership of HRI? In the UK, different courses have different sponsorship arrangements. Tote Ireland has not been a major contributor to racecourses, even though it uses their facilities. Some racecourses, including that of Mr. Moloney, have got Tote Ireland to sponsor major races. Is it possible that betting companies such as Ladbrokes and Paddy Power make a better contribution than Tote Ireland?

Media rights are a major source of funding for the racing industry. The Petrus report indicates income of €42 million for racecourses, but that could include entrance fees, etc. How much are media rights worth to the racing industry? This has been addressed in previous legislation and may be difficult to change. Does the income go to HRI first before being distributed to the racecourses, or does it go directly from the media organisations to the racecourses?

HRI operates four tracks and has a major shareholding in a fifth. Is its position in respect of these tracks disproportionate to, for example, those in Roscommon, Kilbeggan or Naas? There has to be some sort of equity in this area.

I thank the witnesses for their presentations. I enjoy the facilities wherever I go, and I have been to most of the racecourses. It is one of my passions. There are ways of getting the €50 that a punter brings to a racecourse. One can take it all at the gate and the punter may never return, or one can charge a nominal sum for entry so that the punter will have a great day spending the money and will return in the future. That is how I consider the matter. We need to attract a new type of racegoer. Some racecourses are doing their best to draw in racegoers, but I do not think they are getting a just reward for the efforts they are investing.

Andrew Doyle (Wicklow, Fine Gael)
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In other words, one can make a fellow feel good about spending money.

Mr. John Moloney:

In regard to the workings of the board, I served on the board of the Irish Horseracing Authority, IHA, for five years and I am serving my second term on the board of HRI. I have seen a considerable amount of the workings of the board. The board works very well. I have served under two chairmen: Mr. Denis Brosnan, who served the industry for more than 20 years and did a wonderful job with great commitment, and Mr. Joe Keeling, who has now taken over and who has a keen interest in racing and spends much of his time working for the racing industry.

The HRI board works extremely well and the subcommittees are very important to the workings of it, because people would not be able to give the amount of time required if the board were trying to look after everything.

The fixtures committee is very successful. Racecourses have two members on it and it is proposed to reduce this to one member. As our chief executive said, if one racecourse representative were unable to attend a meeting, we would have no representative, and therefore it is very important that we have two members. The fixtures committee comprises HRI members and representatives of the trainers, owners, breeders and the turf club, constituting a cross-section of people. Fixtures are allocated to racecourses on that basis. It has worked very well over the years and there are 349 fixtures. The programmes committee is similar to the fixtures committee, usually meets on the same day and is very effective. There is also a working committee for the programmes. All facets of the industry prepare the programme for a three-month period, and this is submitted to the programmes committee for clarification. We usually make some changes to it before publishing it.

The media rights committee has been very successful down through the years. Media rights are the most important income source of Irish racecourses. It is being proposed that media rights be confined to members of HRI. We have secured a very good media rights deal with SIS, Satellite Information Services, up to 2018 and have another deal with At The Races. These deals are very important sources of funding for racecourses because, as our chief executive stated, without those funds we would not be able to continue to improve our facilities and ensure they are suitable for the patrons. The HRI board is speaking to racecourse representatives about introducing a new capital development fund. The proposal has been very well received by our racecourses. The majority of racecourses have spoken to HRI, and I hope there will be funding for a further capital development fund on racecourses within the next year.

Mr. Paddy Walsh:

I assume Mr. Moloney has dealt with Senator O'Neill's questions and the majority of Deputy Pringle's questions. Deputy Pringle asked whether we had had a response from the Department on media rights and the legalities in the legislation. As this is the first opportunity we have had to raise the issue, we have not had a response. Deputy Heydon asked about the responsibility of racecourses, given the importance of media rights funding and the impact it might have on how racecourses focus on income from other sources, such as through the gate. While racecourses have welcomed the media rights income over recent years, without which we would be in a seriously bad way, we are equally dependent on our other sources of income.

Racecourse attendance fees account for almost 30% of racecourses' incomes. Racecourses, particularly throughout the past couple of years and the economic recession, have had to redouble their efforts to attract crowds through various marketing and promotional initiatives such as themed days. They have taken a major hit on margins. Admission prices to racecourses are lower in real terms than they were six years ago. During the boom days before the recession, racecourses were one of the few sporting venues that did not increase their admission prices. The GAA, IRFU and FAI increased their admission prices significantly.

They have been clawed back a little in light of the recession. We never took that rise at the time. By taking a further cut during the recession, we pared back the margins in order to keep up the numbers. There has been a major effort made by racecourses to do so, with some success.

The Deputy mentioned that racecourse attendances were falling but the reality is that they have increased for the past while. We are up 6% or 7% for the first half of this year. We are quite pleased with that. Last weekend was a great example of a major increase of 10,000 people over two days. On behalf of the industry, we are all happy with the result of that promotion. Racecourses have focused on the crowds coming in and it is not just for the significant amount of money they bring to the party. Those who attended the race meeting last weekend have seen the difference attending a race meeting with a good crowd, a good buzz and a bit of atmosphere. It is phenomenal and that, rather than a wet Tuesday when there is not great racing and not too many people around, will bring people back the next day. It is not just the money coming in on the day but also the image of the racecourse. Racecourse managers are very conscious of it and have made great strides in maintaining attendance levels during the recession and increasing them since then.

With regard to the conflict of interest issue with HRI and owing a racecourse, we highlight it in our submission as a matter that HRI needs to be conscious of. In my experience, and given the length of time he was involved in the HRI board and the IHA board before that my chairman would agree, we are not aware of significant conflicts that have arisen with regard to the allocation of fixtures, grants or anything. We must keep an eye on it.

Another point raised concerned the claims of other parties on media rights. One expects that every sector of the industry would like to have a claim on such rights because of the amount of money brought in. That is perfectly understandable and, in a forum like this, I would expect nothing else of most of them. There was negotiations between the parties and the Department about the previous legislation, which was the 1994 and 2001 Acts. The outcome of the negotiation was that the ownership of media rights was vested clearly in the racecourse executives, with the exception of data rights, which were vested initially in the Turf Club and then subsequently in Horse Racing Ireland. That was clearly set out in the legislation. That is not that different from most sports where media rights are involved. The general thing is for rights to belong to the people who control the venue where the event takes place. From a practical point of view, we can see why it would be so. If the rights were to be with someone else, the person who owns the venue could say that people cannot come into the venue unless they do X, Y or Z. It is the natural home for control of such rights.

The final point is the most important one about any claim another sector of the industry might have. I mentioned that the 26 racecourses in Ireland have not declared dividends in the past 50 years or the length of time that I can go back. All profits from racecourses are reinvested in the industry and the amount of profit, at 1.75% return on capital employed, must be returned to maintain the infrastructure at the level we have it at the moment. The infrastructure is not too bad because of the investment over the past ten or 15 years. The quality of our racecourses is quite good, with one or two obvious exceptions. The standard is very good in comparison with other countries or other sporting bodies in Ireland. That being said, the fact that all profits go into the business to provide the infrastructure where the owners, trainers and jockeys ply their trade means that, without that investment, we would not have the changing facilities and medical facilities on a racecourse for participants and spectators.

Indirectly, all of those other sectors of the industry benefit from the money that comes from the media rights, albeit in an indirect fashion. I am not sure if there is any other body within racing that could naturally oversee that spreading of the benefits back through all the other sectors. From that point of view, I see the racecourse as the natural home of the income from media rights. That is where we think it should be. I think I have covered all of Deputy Heydon's questions, but if I have missed one we can come back to it afterwards.

Deputy Lawlor raised the issue of the percentage of capital development paid by the racecourses themselves. I think I referred earlier to a figure of €270 million which has been invested by racecourses over the past 15 years. Somewhere between 40% and 50% of that would have come from grants through the HRI capital grant development scheme. That is a capital grant development scheme managed by Horse Racing Ireland, so it essentially decides who gets what and at what the percentages are set. Typically, it would write to all the racecourses to ask them what their plans might be over the next number of years and, depending on the uptake, it might allocate so much money towards a scheme. It will then decide on what the percentage grant will be - 40% or otherwise. It will fine-tune the scheme as it goes along on that basis. Normally, these schemes work over a period of three to five years, or somewhere of that order. We did not have a scheme last year, again due to some of the cutbacks, etc. We are hoping to have it reintroduced this year, presumably over the same period of time. The future capital development plans of racecourses would be very much reliant on the continuance of that capital grant development scheme.

Mr. John Moloney:

All those works over a certain value have to conform with public procurement before a grant is issued to a racecourse from HRI. There is a very intense mechanism.

Anthony Lawlor (Kildare North, Fine Gael)
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Are HRI tracks treated more favourably as a result, if it is deciding?

Mr. John Moloney:

No, because all the different bodies within the industry are represented on HRI. One will have seen where development has been throughout the country. I mentioned Galway. We have a new stand in Limerick. I also mentioned Cork. We have had a big development in Leopardstown. The next big project on the agenda is the redevelopment of the Curragh, which will, we hope, commence in the next year to year and a half. Our Turf Club colleagues will fill members in on that a bit better.

The moneys in the capital development have been distributed very fairly and evenly. Any course that has applied for it has been granted it. We saw a big development at Sligo racecourse. I do not know how many members have been to Ballinrobe but I think it is a beautiful racecourse and it is a real best-in-class among our country's racecourses and those in the UK, given the size. The moneys have been distributed very fairly and I could not see how HRI tracks would been favoured in any way.

We may not have said that racecourses contribute more than €5 million in sponsorship to the whole prize fund. Obviously, the racecourses have to provide and service sponsorship of races. Last weekend there were two very successful days - one in Leopardstown and one in the Curragh - with huge sponsorship. It was a wonderful spectacle for racing internationally, and people from all over the globe attended. That is very important. We have the best horses in the world and we can run the best race meetings now. It is very important that we have such successful meetings.

I would like to congratulate all those involved in the three days of racing, including the executives in Leopardstown and the Curragh. They did us proud and we should all be very pleased with what has happened for Irish racing. No doubt Listowel will see huge crowds tomorrow for the Kerry National and ladies' day on Friday, which will be a great finish to our racing year.

Andrew Doyle (Wicklow, Fine Gael)
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There are some more questions on fixtures and starting gates.

Mr. Paddy Walsh:

Deputy Lawlor referred to the fairness of the allocation of fixtures. It is not dissimilar to the capital development grants. Over recent years the system, which comprises a working group, a fixtures committee and the HRI board, has been a very effective structure which has worked very well. It has helped to ensure that the allocation of fixtures by the HRI board is done on a very fair and equitable basis. We spoke briefly today about some of the big meetings such as that which took place last weekend, derby days, grand nationals and festival meetings. They are all, to some extent, written in stone.

We also have what we call industry days, in which there might not be a huge interest by certain sectors of the public or our audience, but such races are necessary to provide opportunities for horses to run. When those fixtures were being handed out down through the years, not that many racecourses were eager to take them on. In some cases the HRI tracks were persuaded to take them, which might have worked against them - being HRI tracks. In general terms our experience has been that it has been done on a reasonable-----

Anthony Lawlor (Kildare North, Fine Gael)
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The HRI tracks which took them on board have not lost fixtures as a result. There are major benefits.

Mr. Paddy Walsh:

That is a fair point. I accept that.

Andrew Doyle (Wicklow, Fine Gael)
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In his contribution Mr. Walsh referred to the recognition of fixtures and to section 19 of the 1994 Act which states that before considering removal of a fixture from a racecourse, the race fixtures committee must consult the executive of the racecourse concerned and seek to agree to how such a removal can be achieved having regard to economic importance. This is an amendment Bill. I understand that section will remain in the principal Act.

Mr. Paddy Walsh:

That is correct. That my understanding as well.

Andrew Doyle (Wicklow, Fine Gael)
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There is no issue if that is the process. Mr. Walsh is happy enough-----

Mr. Paddy Walsh:

I am simply referring to the recognition of the importance of fixtures to racecourses.

Andrew Doyle (Wicklow, Fine Gael)
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I asked Mr. Walsh to clarify a point which was not clear in his contribution, which was whether the amendment Bill affect section 19. It is an amendment Bill. Therefore anything which is not specifically referred to will remain in the principal Act, as amended.

Mr. Paddy Walsh:

The other two points are the starting stalls and the sponsorship thereof. I understand the starting stalls are the property of HRI rather than individual racecourses.

Mr. John Moloney:

On most racecourses they are the property of HRI and a sponsorship deal was done with the tote. Some racecourses, such as the Curragh and Leopardstown, have their own. If a racecourse had a major sponsor and wanted to have it on the starting stalls it would be possible to negotiate it for a major race day.

Mr. Paddy Walsh:

Deputy Lawlor referred to the overall contribution of the tote to racecourses. For some time racecourses would have held a view that the overall contribution made by the tote could be more given the footprint it has on our racecourses. The reality is that until recent years the tote had not shown sufficient profits to be able to pay what we would like towards its footprint on Irish racecourses. I am glad to see it recently returned to profitability. We are in negotiations with it about getting an additional contribution for racecourses.

Anthony Lawlor (Kildare North, Fine Gael)
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How much is involved in media rights?

Mr. Paddy Walsh:

The Petrus report provided that information. Out of a total income of €42 million the media rights are in excess of €20 million.

Anthony Lawlor (Kildare North, Fine Gael)
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Is that all returned to the racecourses?

Mr. Paddy Walsh:

It goes straight to the racecourses from the purchasers of the media rights-----

Anthony Lawlor (Kildare North, Fine Gael)
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HRI takes no money out of it?

Mr. Paddy Walsh:

HRI takes none of the money that goes to the racecourses, but it should be remembered that under the legislation, it also owns the data rights. Therefore, the portion relating to the media rights goes to it.

Anthony Lawlor (Kildare North, Fine Gael)
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What percentage is taken by HRI?

Mr. Paddy Walsh:

Some of the information is commercially sensitive, but in relation to data rights-----

Anthony Lawlor (Kildare North, Fine Gael)
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HRI is a public company and that information should appear in its accounts, but it does not.

Andrew Doyle (Wicklow, Fine Gael)
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Let us be clear that HRI is not a public company; it is a statutory authority.

Anthony Lawlor (Kildare North, Fine Gael)
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It is a State company.

Andrew Doyle (Wicklow, Fine Gael)
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To be clear, it is not a company.

Anthony Lawlor (Kildare North, Fine Gael)
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It is a State body.

Andrew Doyle (Wicklow, Fine Gael)
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It is.

Mr. Paddy Walsh:

HRI gets money from the rights which it is entitled to sell.

Andrew Doyle (Wicklow, Fine Gael)
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As I am conscious of the time, do members have questions for the Racegoers Consultative Forum?

Martin Heydon (Kildare South, Fine Gael)
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I have some comments to make on the presentation. I refer to the point made about membership of the board. Every group present has been vocal about the issue of board membership and it is a factor we must consider as part of our report and recommendations. There is a need for a balance between having good representation and a board that is unwieldy and unworkable. We take on board the views expressed in the presentation. With the owner, the racegoer and the punter are the people who pay money into the system, which is vital in to maintain the industry in its current form.

I note the point made about the need for services to be provided to a high set standard. I refer to the point made by Mr. Paddy Walsh that good investment has resulted in fine facilities around the country, although a few will need further work. I hope this will happen in the near future. It is important to achieve and maintain the highest possible standards.

I refer to the horse and greyhound fund and hope, too, that the betting tax will bring in significant revenues to provide a bigger cake with more slices to go around. It was suggested the horse and greyhound fund could be used to provide all of the capital funding required. We want to see more capital funding for capital projects. The biggest argument the Minister can make when he is fighting for the €54 million of taxpayers' money for the horse and greyhound industry is that it creates so many jobs and generates economic activity to a value of over €1 billion. There will always be a place for elements of the industry to make their contribution towards capital development, but that is not to saywe do not want to see increased activity.

I refer to the interesting suggestion made about the betting tax. We would have to be sure, however, that it contained no loopholes to ensure the system would not be abused. However, in general, as a way of attracting people to racecourses to place bets instead of just watching racing on television or in the bookies, for many reasons other than monetary ones, we should encourage the creation of that kind of environment.

Pat O'Neill (Fine Gael)
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I have a question for the Racegoers Consultative Forum on the composition of the board. I refer to head No. 4 of the Bill. The board is to comprise a chairman and 12 members. Other groups have asked for a bigger number of board members. I suggest we meet the delegates in the near future to discuss this matter.

I refer to the age profile of those attending racecourses. I ask Mr. Philip Meaney how Bord na gCon can get more younger people through the gates. I have been attendng race meetings for years; I went as a youngster and a teenager. If I go to my local track, Gowran Park, or the dog track in Kilkenny, there will not be many young people there. The industry will die if it does not get the support it needs. People can bet on-line or go to a bookies.

However, the industry also needs to have people coming through the turnstiles.

Deputy Anthony Lawlor referred to admission charges. Racecourse owners might be better off letting people in for free on certain days, as already happens in some cases, in order to encourage higher attendance rates. I have been to flat race meetings at Gowran Park on summer evenings where there might be only 150 people in attendance. Without the income from media rights, these attendance levels are not sustainable. How do the delegates, as representatives of the industry, propose to attract more people to attend race meetings? It is important, moreover, that there be an emphasis on attracting young people. When people start to attend race meetings at a young age, they are likely to continue to do so throughout their lives. On the other hand, if most young people are never brought to the tracks, the industry could die.

Andrew Doyle (Wicklow, Fine Gael)
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The Senator's point is not relevant to the issues we are discussing.

Pat O'Neill (Fine Gael)
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I realise that.

Andrew Doyle (Wicklow, Fine Gael)
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I assume there are other fora in which the Senator might raise that issue with the delegates.

Pat O'Neill (Fine Gael)
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Another meeting with them would be useful.

Andrew Doyle (Wicklow, Fine Gael)
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No doubt racecourse owners will have some sympathy for the suggestion taxes should not be applicable on courses, but that discussion is for another day.

Pat O'Neill (Fine Gael)
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Perhaps the Chairman might consider arranging another meeting at a future date?

Andrew Doyle (Wicklow, Fine Gael)
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I certainly will consider it, but we should confine our discussion today to the scheme of the Bill.

Tom Barry (Cork East, Fine Gael)
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I welcome the delegates. It is important that the Racegoers Consultative Forum be represented on the board of Horse Racing Ireland. While the issues to do with betting revenues and so on are important and valuable, it is important to acknowledge that there are people like me who attend race meetings - my local course is in Mallow - but do not generally place bets. I do, however, spend money on other racecourse facilities such as food outlets. It is important to consider how to go about attracting racegoers who are not necessarily passionate or well informed about the sport but who might well enjoy a day at the races as a social event in itself.

Regarding media rights, we are all aware that social media have changed the way people interact. Would the delegates consider a scenario where the industry might approach media rights issues as a group rather than each person seeking to make individual deals? That type of joint approach could be of benefit in selling the industry in an holistic way and allowing a collective expertise to be built.

I am not an expert on this side of the industry, but I am fascinated to hear the delegates' insight. It is important to have fresh thinking in considering these issues. Senator Pat O'Neill, for instance, spoke about attracting young people and encouraging them to embrace the spirit and excitement of the industry. There have been some very interesting suggestions made. While it is always challenging to secure agreement on every point, it is very welcome to see industry representatives coming together and discussing the issues.

Andrew Doyle (Wicklow, Fine Gael)
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In calling the remaining speakers, I ask them to be brief.

Anthony Lawlor (Kildare North, Fine Gael)
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Mr. Moloney referred to the racing that took place last weekend at the Curragh and Leopardstown. I agree that the product on offer was excellent, as reflected in the crowds it attracted. There were lots of students who had free admittance and a range of reciprocal initiatives with other race tracks. There were large numbers of people in attendance who were willing to spend money. It was an excellent weekend's racing.

Mr. Fox referred to the Minister's power to make three appointments to the board of HRI. The big three in terms of who is putting money into the industry are the sponsors, the media and the punters, but none of these is represented on the board. Perhaps the Minister might review this when he comes to make his appointments.

In terms of encouraging more people to attend race meetings, maintaining the situation whereby the tax does not apply to on-course betting would offer a small incentive to the punter.

Mary Ann O'Brien (Independent)
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My question is for all of the delegates and relates to the heads of the Bill. What is their view of the Minister's powers to make three appointments? I ask them to consider a scenario which might be controversial for me to present.

Imagine a person came to power in Ireland who did not adore this sport as we do. Many of us love rural Ireland and know how important this sport is to rural Ireland. How do the witnesses feel about the aspect of the Bill that gives the Government of the day a significant say in the affairs of HRI? I refer not only to the composition of the board and the people here who work in the industry. I will not name any such person that might come to power.

Mr. Jack Nagle:

I thank the Chairman and the committee members for giving the Racegoers Consultative Forum this opportunity. I wish to address the proposal relating to the board. The RCF recognises that the size and composition of the HRI board has evolved over time and the amended Bill proposes further evolution. The Bill also proposes the establishment of two new committees, both of which will be represented on the board. This leaves racegoers as the only major group under the auspices of HRI that does not have representation. We propose racegoers should be represented on the board because it would give them a direct say in the development of the industry. We understand that the aim is to streamline the industry and place it on a secure, viable and sustainable economic platform but, as racegoers, we believe we can help in reaching this goal and that is why we feel the RCF should have a seat on the board. My colleague will address the issue of the attendance of young people.

Ms Joan Widger:

As a young person, I grew up with racing and it is second nature for me to go racing every weekend. At racecourses, significant headway has been made through the packages provided - one can get a free beverage, sometimes a free bet, included in the price of admission. Ladies' day, for example, could be more interactive with actual racing so the social racegoer could learn more about the horses involved. A person might follow a horse that wins on ladies' day throughout the year. That person might make a point of attending the next race meeting at which such a horse is running. It would be useful if the race day was more about racing than other things.

Student days have become popular over the years but, again, such ideas could focus more on racing than social aspects. Tours could be conducted of the weigh room and a mechanical horse competition on a race day could help students remember the racing and the horses, rather than the fun at the bar. Students should be encouraged to continue attending race meetings after they finish college.

Some tracks are making great headway on facilities but others are being left behind. When my friends attend a small track with an uncomfortable bar on a winter's day they tend not to return to racing. Significant investment has been made in other sports and they may offer more comfort to spectators than racing.

Mr. Jack Nagle:

On attendances, there has been much positive commentary but I ask that we do not become complacent because race tracks to great work to attract attendances. Mr. Brian Kavanagh, the chief executive of HRI, recently suggested that the number of jobs in the horse racing industry could grow from 16,000 to over 20,000 and it is important to stress that such jobs are in rural areas. We ask that the committee members listen to our recommendation that a voice be given to racegoers.

Andrew Doyle (Wicklow, Fine Gael)
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Does Mr. Moloney wish to make a quick comment?

Mr. John Moloney:

I just want to reply to Senator Mary Ann O'Brien's comment regarding the Minister's nominees to the board. The Minister currently has power to sanction the nomination of two members of the board, namely, the chairman and the representative from Northern Ireland. He proposes that this be increased to three. As Deputy Heydon stated, the Minister allocates €54 million in funding to the industry. In that context, I am of the view that he is entitled to nominate for appointment to the board individuals who will ensure that everything is done properly and to his satisfaction. I do not have any difficulty with regard to the Minister nominating three members for appointment. When the Racing Board was in existence, the Minister for Agriculture of the day nominated all of its members. Ireland is a very horse-friendly country and I am of the view that, regardless of who is in power in the Dáil, this will always be the case.

Mr. Jimmy Cox:

There has been a great deal of discussion in respect of young people attending race meetings. There are two major obstacles in this regard at present, the first of which relates to the unavailability of Wi-Fi at most racecourses. A certain inhibition exists when it comes to this matter and the bookmakers have some say in that context. Racegoers would certainly like to have access to Wi-Fi at courses but they do not have it at present. The other issue in this regard relates to our attempts to ensure free admission to race meetings for those under 18 years of age. To date, we have not been able to obtain a great deal of agreement on this matter from many racecourses. We are trying various initiatives and we would like the industry to respond to them at some point.

Andrew Doyle (Wicklow, Fine Gael)
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Its representatives are sitting behind Mr. Cox. In the context of Senator Mary Ann O'Brien's point, we must ensure that the industry is so popular that those it sends to represent it in the Houses of the Oireachtas will be sympathetic towards it. On Ms Widger's comment, perhaps the committee might recommend the imposition of an upper age limit in respect of at least one of the 12 members of the board. It was very interesting to listen to the observations of a younger person.

I thank our guests for attending. We will be hearing next from representatives of the Turf Club. This is the first occasion on which the committee has been asked to examine legislation at the pre-legislative scrutiny stage. In that context, this has been a useful exercise. Today and on several other occasions, interesting proposals have been put forward. I refer, for example, to the notion of nominating a proxy to attend meetings on behalf of a member who might not be in a position to be present as a result of a heavy workload or whatever. That is a suggestion to which the committee will give consideration. Several witnesses who have come before the committee, both today and previously, have commented on head 4 and the validity of expanding the membership of the board from 12 to 15. The point has been made that a membership of 15 would not be unwieldy. That is another matter we will examine. The committee hopes to be in a position to make observations on a range of issues. It also hopes to be able to make recommendations in respect of a number of these.

I take this opportunity to point out that Deputy Lawlor and Senator Bradford are not members of the committee. However, like all other Members of the Oireachtas, they are entitled to contribute to our proceedings. It will be the members of the committee who will decide upon any final recommendations to be made. I am sure the Deputy and the Senator will make their views known to the committee.

I propose that we suspend proceedings for five minutes to allow the new witnesses to join us. If those who are with us are not in a position to stay for the remainder of the meeting, I take this opportunity to thank them for their contributions. All of the points they made will be considered by the committee, with the assistance of the Library and Research Service. We are somewhat under the gun in the context of concluding our deliberations on the general scheme of the Bill by the end of the month. With luck, however, I am sure we will be in a position to submit our recommendations to the Minister by no later than the first week of October.

Andrew Doyle (Wicklow, Fine Gael)
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I remind members, witnesses and all observers to please turn off their mobile phones. I welcome representatives from the Turf Club - Mr. Denis Egan, chief executive, Mr. Neville O'Byrne, senior steward and Mr. Michael Hickey, senior steward of the Irish National Hunt Steeplechase Committee. I thank them for coming before the committee to discuss the heads of the Bill before us.

Although the witnesses were previously in the Gallery I am obliged to remind them about privilege. Witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or persons or entity by name or in such a way as to make him, her or it identifiable. I invite Mr. Egan to make his opening statement.

Mr. Denis Egan:

Thank you, Chairman and members of the committee. I am grateful for the opportunity to address the committee on the draft general scheme of the Horse Racing Ireland (amendment) Bill 2014. At the outset I will give a brief overview of the industry in Ireland in the context of the respective roles of HRI, the Turf Club and the Irish National Hunt Steeplechase Committee, which I will refer to as the national hunt committee during the presentation. My colleague, Neville O’Byrne, who is on my right-hand side, and is senior steward of the Turf Club, will then take the committee through some of the specific provisions in the draft scheme which are a cause of concern for us. We have already made a submission to the committee which covers these and other points in greater detail. Michael Hickey, who is on my left, who is senior steward of the national hunt committee, will make a brief presentation on point-to-point racing. At the end of our presentation we will be more than happy to take any questions members of the committee might have on any aspect of our presentation.

Horse racing in Ireland is promoted and regulated by two very different bodies. Horse Racing Ireland is a State body chartered with the development and promotion of the sport of horse racing. The Turf Club and national hunt committee, or the Racing Regulatory Body, as it is known in legislation, is the independent regulatory body responsible for ensuring the integrity of the sport. With the enactment of the betting (amendment) Bill the racing industry will to a much greater extent be funded from betting tax. Betting on Irish racing, including international betting on Irish racing, is dependent on a clean, regulated sport. Likewise, income from media rights which was referred to in great detail by the Association of Irish Racecourses, AIR, and Bord na gCon in the previous session, depends on a clean, regulated sport to maximise revenues. Regulation of racing in Ireland has been provided, independently, by the Turf Club and the national hunt committee for more than 200 years.

In their presentations to the committee all of the stakeholders in Irish racing have recognised the need for an independent regulator. That is something we will stress throughout our presentations today. The proposed Horse Racing Ireland (amendment) Bill 2014 has, as currently constituted, the potential to seriously compromise the independence of the Racing Regulatory Body and, by extension, to compromise the integrity of Irish racing.

In any industry best practice suggests that regulation should be independent of promotion. In the food sector, Bord Bia and the Food Safety Authority operate entirely independently of each other and in the health sector the HSE and HIQA operate independently of each other. One has only to look at the financial sector in Ireland to see the problems that arise when there is inadequate regulation. There are provisions in the proposed legislation which, if enacted, would give an excessive level of control over the functions of the Racing Regulatory Body to the promotional body for the sport, Horse Racing Ireland. We support the original intention of the Indecon report and the Smith and Williamson review; namely, to "streamline" and identify savings in the administration of the industry. The savings of €1.5 million originally targeted by this process were identified by a joint Horse Racing Ireland-Racing Regulatory Body task force in early 2013.

A large proportion of the savings involves transferring costs from Horse Racing Ireland, HRI, to the racecourses while another portion of the savings identified will result from improvements to IT systems. All of the savings originally targeted from this process can be implemented without any change to existing legislation governing the industry.

The proposed legislation goes far beyond implementation of the recommendations made by Indecon in its report and may well have the unintended consequence of actually increasing the cost of regulation through a loss of volunteerism from our members.

I will briefly outline what the Racing Regulatory Body is and how it operates. The Racing Regulatory Body consists of the Turf Club, established in 1790, which regulates flat racing, and the Irish National Hunt Steeplechase Committee, established in 1869, which regulates both national hunt and point to point racing. Both are all-Ireland organisations which have been independently regulating the sport since they were set up.

There are 167 members of the regulatory body from which four members are selected to steward at each of the 350 race meetings held annually. Others serve on the appeal and referral committee, the licensing committee or the other various committees of the organisation. All of this work is performed on a voluntary basis with regulatory body members travelling the length and breadth of the country at their own expense.

In order to regulate the industry, the regulatory body has developed a comprehensive set of rules based on 224 years of regulatory experience. The rules of racing also reflect international best practice. The regulatory role is carried out by racing officials, executives and the volunteer members.

The costs of regulation, that is, the integrity services costs, are guaranteed by Horse Racing Ireland on the basis of an agreed annual budget. The regulatory body licenses all participants in the industry. I will now hand over to Neville O'Byrne, who will outline our main concerns on the proposed legislation.

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.

Andrew Doyle (Wicklow, Fine Gael)
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Thank you Mr. O'Byrne. I now call Mr. Egan.

Mr. Denis Egan:

I thank the Chairman. Mr. Michael Hickey, senior steward of the Irish National Hunt steeplechase committee, will now update the committee on point-to-points.

Mr. Michael Hickey:

I thank the Chairman for the opportunity to be here. I represent the National Hunt Committee and I also represent a lot of people in the point-to-point community. Amateurs around the country are the rural fabric of point-to-pointing. There is a huge voluntary aspect to it around the country but they are not here themselves today and have not been consulted on this. I will therefore try to represent them to the best of my ability.

In addition to its role in national hunt racing, the Irish National Hunt steeplechase committee - which, as Mr. Egan said, was established in 1869 - is also responsible for the administration and regulation of point-to-point racing. In order to participate in point-to-points all owners, trainers and horses must register with the National Hunt Committee. The National Hunt Committee allocates point-to-point fixtures and licenses entry takers for point-to-points. We first developed a set of rules and regulations for the sport in or around 1900.

Point-to-point racing is very much an amateur sport and is predominantly run on a voluntary basis by local hunts and committees around the country. These committees transform green fields to racing circuits and return them to green fields again following a point-to-point meeting. They make the majority of the arrangements necessary to organise each meeting and they provide in the region of 60 to 80 staff on a voluntary basis on any one race day. The hunts are supported in their role by the National Hunt Committee to do this.

Point-to-point racing has flourished over the last ten years and creates a major outlet for the sale of Irish horses. Many UK owners and trainers visit Irish point-to-points throughout the season and competition to purchase Irish pointers is intense. It is estimated that the sale of pointer-to-pointers generates about €15 million annually. This provides a welcome boost to rural economies and farm incomes. As some members of the committee will know, being familiar with point-to-point races, many farmers have a horse stuck in the back lane for point-to-pointing.

The State has never had any involvement in point-to-point racing and it is not mentioned in any of the racing Acts. The terms of reference for Indecon make no reference to point-to-points. Indecon made no recommendations in relation to point-to-points. Subsequently, HRI sought to introduce the topic of point-to-points and proposed that all point-to-point registrations and administrations would be switched from the National Hunt Committee to HRI. HRI went further and suggested that any surpluses arising from point-to-point racing would be put under the control of HRI for it to decide on their application. No reasons were advanced as to how this would help point-to-point racing.

There is a separate issue on streamlining costs and the National Hunt Committee is confident that any cost savings identified will be met from improvements in processes, some of which have already been implemented. These will include the introduction of online registration of hunter certificates and an online application process for handler licences. These are being implemented and I myself registered as a handler last week online.

It is the first time we have had that facility. While the changes to point to points proposed in the draft general scheme are a little less extensive than those originally proposed by HRI, the proposal in head 5 that the registration of hunter certificates, the registration of participants in point to point steeplechases and the processing of all charges in relation to point to point registrations should be administered by HRI is without basis.

The proposals in head 11 that fees should be made payable to HRI and that charges for registrations can only be set subject to consultation with HRI are also without basis for an amateur sport. There is no need to nationalise point to points. The proposal to include point to points in the draft general scheme marks the first time that point to point racing has been included in legislation and, to our knowledge, would mark the first time that participants in any amateur sport are being required to register with a State body. Participants in the GAA, rugby and soccer are not required to register with a State organisation even though those sports benefit from considerable State funding.

In conclusion, we ask members to reflect on the following: Point to point racing is an amateur sport run predominately on a voluntary basis; no other amateur sport that we are aware of is subject to legislation; it is not mentioned in any of the racing Acts, and Indecon made no recommendations in relation to point to points. Legislative changes should be informed by careful study and consultation with interested parties and stakeholders. There has been no consultation with the parties and stakeholders involved in point to point racing and there is no basis for any reference to point to points in the Horse Racing Ireland (amendment) Bill 2014. We go further and contend that the proposals in heads 5 and 11 of the current draft general scheme amount to an unconstitutional attack on the property rights of the Irish National Hunt Steeplechase Committee.

I thank the committee very much and will endeavour to answer any questions that may arise from my submission.

Andrew Doyle (Wicklow, Fine Gael)
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I thank the witnesses. We will take questions as they come and the witnesses can pick them up after.

Martin Heydon (Kildare South, Fine Gael)
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I thank the Turf Club representatives for their presentation today and the different elements of it. Integrity has been discussed with all of the different stakeholders we had here before now, including the importance of ensuring it. As I have recorded here before, integrity is something one takes for granted when one has it and if one loses it, it takes a long time to get it back. The discussions we had earlier with the racecourse representatives on who had the right to the pot of money flowing from media rights would all be for nothing if we lost our integrity. The money that would be available in television rights in future would all be lost. It is in everyone's interest that we maintain integrity. Everything we and the Minister do must take cognisance of that. We must not do anything here that impinges on that. At the same time, there is always a need to ensure that our systems are as streamlined and fit for purpose as possible. It never does any harm, therefore, to re-examine these things. The pre-legislative process is about sitting down and dealing with key stakeholders, as we have over the last number of weeks and months, to hear any concerns there are on potential pitfalls. We will then compile a report to feed that back to ensure the Minister and officials have examined every possibility and that we have proper scrutiny of legislation to avoid unintended consequences in what is proposed.

I have a number of questions based on the presentation. In the opening presentation, Mr. Denis Egan made reference to comparisons between the HSE and HIQA and Bord Bia and the Food Safety Authority. In relation to the racing industry internationally, what other examples are there? What do our counterparts in other countries do? Are they more amalgamated or separate? What is the experience abroad from how things have been run?

Across the industry, there has been much frustration at the amount of time the streamlining process has taken. The Turf Club voiced its frustration that what are, in the general scheme, relatively small savings have not come into place yet and could have happened without legislation. Why has that not happened before now?

The club also referred to the risk of the loss of volunteerism. Similar to integrity, if one loses volunteers, it is hard to get them back. Leaving aside the role of Turf Club volunteer members in providing integrity functions, what are the general costs associated with such functions?

What impact on integrity could Horse Racing Ireland getting control over entries into, choosing silks for, and so forth for races have? Is it not the case Horse Racing Ireland already has a considerable role in that? Perhaps the Turf Club would point out where the difficulty or conflict arises in that.

The Turf Club referred to heads 5 and 11 which it claims would remove financial independence from the regulatory body, and went on to say it was fundamentally opposed to the proposal regarding point-to-points. Keeping those separate for the moment, on the issue of arbitration, the Turf Club stated in its submission: "The existing arbitration clause provides for the appointment of an arbitrator in the event that the parties cannot agree on an integrity services budget in any particular year." It wants this extended, and I note that. How long has this arbitration process been in place? Has it been used heretofore? I presume its decisions are binding.

Point-to-point racing is a successful element of the industry that works extremely well. If one makes a comparison with the GAA, there is the big day out in Croke Park and there is the small day on the side of the GAA club. It is gravelly, down to earth, and absolutely grassroots. To me, that is what point-to-point is. It is the vital grassroots element that plays such a key role in providing a nursery for the industry before progression to the full racecourse. Also from the breeding aspect, the price of a decent point-to-pointer in the sales can be very significant. For those who are breeding horses and even for the farmer who has a few mares, it is a key area. We want to ensure there is no risk to this side of the industry in this legislation.

Mr. Hickey's presentation states that to participate in a point-to-point race, all owners, trainers and horses must register with the Irish National Hunt Steeplechase Committee, INHSC. It also mentions hunter certificates and handler licences, specifically the online application process. There are two different applications, one for a licence and another for a certificate. Are these being amalgamated or will they be retained? Will the Turf Club outline the changes to these arrangements?

The presentation also mentions that the State never had any involvement in point-to-point racing and it is not mentioned in any of the racing Acts. Is it not fair to say that this legislation would confirm in statute for the first time that point-to-point racing is a function of the INHSC? Does it not lock that in and would it not answer some of the Turf Club's concerns? What would it see would be needed to address the concerns it has highlighted?

The Turf Club contends the proposals in head 5 and head 11 of the current draft general scheme "amount to an unconstitutional attack on the property rights of the INHSC". That is a serious statement. We as a committee and the Minister cannot have a situation where legislation would go forward that would be unconstitutional.

A situation can arise where a piece of legislation that would be unconstitutional could go forward so this committee must ask the Attorney General to look at this again. If this is the case, it is a serious situation. Those are my questions and points for now.

Thomas Pringle (Donegal South West, Independent)
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I thank the Turf Club for its presentation. I am somebody who probably knows the least about horse racing in this committee. We do not have any courses in Donegal. We have plenty of bookies but we do not have any racecourses. I wanted to ask about the integrity services and the Turf Club's request in respect of off-course integrity checks. The presentation stated that the Turf Club carries out dope testing on a voluntary basis. Do any other bodies carry out drug testing off course or when horses are in training because it seems that this is very important and should be included in the legislation? If the Turf Club is the body that is responsible for drug testing on course, it makes sense for it to be carried out by the same regulator off course. Could the witnesses expand on that?

In respect of the requirement to consult with HRI regarding rule changes, the proposal mentions the word "consult". It does not say "take into account" or anything like that. Could the witnesses expand on how that undermines the independence of the Turf Club in respect of the requirement to consult?

In respect of the head that covers the actual fees from licensing and registration, I presume they are dispersed back to the Turf Club as a way of financially controlling the expenditure of HRI. I could see how this could affect the independence of the Turf Club. I presume those fees come directly to the Turf Club and are separate from any grants received so it looks like a way of tightening up financial controls and reducing budgets rather than improving the effectiveness of the operation of the Act.

Mary Ann O'Brien (Independent)
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I thank the witnesses for their presentations. Adding to what Deputy Heydon has said, what are the witnesses' views regarding the sustainability of the voluntary aspect of the future of the Turf Club and the racing regulatory body? It has 167 members, four of which are selected to steward throughout Ireland. This is very admirable but I would be interested in hearing the views of the witnesses.

Deputy Heydon spoke earlier about doing more with less. Could the witnesses expand on the cost saving that has taken place and the streamlining that has happened so far? Savings of €1.5 million were referred to. This is how this all started. We have a very good Minister for Agriculture, Food and the Marine. The man is a genius and looks at areas of business. We are all in a new era. I am so impressed with the presentation today and how we are seen globally as being crystal clear with regard to how we regulate racing, yet we are all here to look at these heads of Bill so that we can keep the regulation clean and to the points made today by the Turf Club. We must find a way to do it in as cost-effective a way as possible. The registration of silks and entries does not make me feel that this has anything to do with the rules of racing but perhaps it does. Could the witnesses expand on that?

We heard earlier from the Association of Irish Racecourses. Does the Turf Club own the Curragh Racecourse? It does. We are very lucky with the Curragh Racecourse because it is the headquarters of Irish racing. I think it is the only racecourse in the world that runs five group 1 classics. I have been out of racing for a long time but I recall that there was rather a large sum of money - I think it was upwards of €18 million - to invest in the upgrading of the Curragh Racecourse, which has never happened.

I would like to hear some comments about the past and plans for the future. We can speak about having the best horses in the world but we also must have the best facilities. This is the headquarters and I want to hear more about what happened.

I also ask for comment on the patent committee and the views of the witnesses on the heads of the Bill and working together with HRI. In an international context, such collaboration has been successful in the past. The chairman of HRI spoke about the derby earlier this year because the French changed one of the fixtures that stopped international runners coming to our derby. It is important that we get that right.

Tom Barry (Cork East, Fine Gael)
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With regard to the arbitration approach, I presume further reform would involve addressing the length of time involved. What type of arbitration would the witnesses like to see? Is funding from HRI provided on a monthly or a weekly basis and is it accompanied by any provisos? With regard to rules and regulations in the industry, if registration is carried out by HRI, are there experts in that organisation similar to those available to the Turf Club and are they competent in this area?

In Cork we have a buoyant point-to-point structure which works very well. Would these changes hinder the development of that structure? I recognise that considerable goodwill exists at present but I know from the people involved in the committees that they do not have a huge amount of money. I am concerned that there might be an impact on the success these events currently enjoy.

Anthony Lawlor (Kildare North, Fine Gael)
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The witnesses made a number of interesting points, which can be boiled down to two simple issues, namely, funding and integrity. The big issue for me is integrity of the racing industry. The last thing we want is the situation which arose in the UK in regard to doping and one of the main owners and breeders in that country. There were fears that the integrity of the racing industry might be damaged as a result.

It is important that promotional bodies, such as Bord Bia, and health and safety governance are separate. When HIQA goes into a hospital, the management of the hospital is fearful. The Irish racing industry is worth €1.1 billion and we must ensure adequate integrity and international confidence in our ability to run a proper industry. We cannot allow a situation whereby someone who pays the integrity body is able to define the rules and regulations to be applied. The integrity body would lose its independence if that were to happen. In regard to integrity, would it be necessary to go cap in hand to HRI in order to get additional funding for an investigation into something that might have a detrimental impact on the racing industry?

That does not make sense. Does the Turf Club have difficulty with HRI accessing the funding they agreed earlier? If it is an issue, the legislation cannot allow HRI to take more control of the funding aspect of the integrity body. It is amazing that the Turf Club is not in control of the starting stalls but must refer to HRI if there is an issue with them during a race. It is very important to the integrity of a race meeting that punters who back horses and owners who pay large sums of money to enter their horses in races know they will get value for their money.

Although people are talking about streamlining and saving money, when I asked HRI how many staff would be let go and how much money would be saved, they kept saying it would happen over time. Given that the Turf Club has been in operation for more than 200 years, "over time" is a long period. In the private sector, when there is an amalgamation, everybody knows there will be staff cuts. However, HRI has not identified any. It has not yet published its accounts for 2013, which is ridiculous given that we are nearly in the final quarter of the year. Where does the funding that HRI takes from the media rights go? How much does it take out? I cannot find out because the figures are not available.

I am fascinated by the fact that the sector is entirely voluntary. Like many people, I am part of a voluntary organisation, my rugby club. However, HRI members are all paid officials. The increase in volunteerism among people over recent years has been great and I would hate if it were in difficulty. I am concerned that if the Turf Club wants to do something to try to ensure the integrity of Irish racing is maintained, it must go cap in hand to HRI. It is not right. I welcome the fact that the Turf Club is willing to come before the Comptroller and Auditor General. It is a very positive move and should alleviate any concerns that the funding it receives from the State is not accounted for. If a wheel is not broken, one need not mend it.

Paul Bradford (Independent)
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Deputy Lawlor said what I had intended to say. We are at the very central aspect of the legislation, its purpose and where it will take the industry. Racing has no certainties, as we saw at the weekend. The one positive aspect which everybody associates with Irish racing is that it is transparent and fair. There are always variables and surprises. Integrity has been a key to maintaining this reputation. Earlier, we had very important presentations about the make up of bodies, facilities, attendance and how to encourage it and bring new people into racing. I support all those comments and have done so previously. However, unless we can showcase a product we can point to as being beyond reproach, we will have major difficulties. Deputy Lawlor mentioned Britain.

We can look at what happened in cycling where one of the greatest sports events in the world was decimated overnight and - let us call a spade a spade - will never return to its former glory. We have to ensure this will never happen in this industry.

Deputy Lawlor and I will not participate in the process but committee members will have to reflect on the submission to be made to the Minister because once legislation is passed, it must be ensured integrity and certainty are at its very core. I agree with Deputy Lawlor in this regard.

As Deputy Barry said, point-to-point racing is of significant interest to people from Cork. We discussed attendances earlier. I live a mile from Dromahane racecourse and three or four miles from Cork racecourse. Over the past decade, I will not embarrass Cork racecourse by saying which was the winner for average attendance. Horse racing would not survive without point-to-point racing. Carloads of people attend meetings on Sundays and they are admitted at a modest cost to have a great day's fun. That is an introduction to racing. Without strong point-to-point racing, there will not be a future. Perhaps I am putting the ball in an empty net but at whose behest are we having the discussion on this part of the Bill? It was a stand-alone part of the broader industry, which was working effectively. Whose brainchild was this? Why are we having this debate? Where did the pressure come from? Deputy Lawlor used the wheel argument, but "if it ain't broke, don't fix it". If any part of the equine industry is not broken, it is point-to-point racing. Throughout the country, Sunday in, Sunday out, enthusiasts turn up to participate. There are many volunteers, including locals who would never visit a racetrack. Some people, who are alienated by the language of racing, feel so much at home in a point-to-point field. Perhaps Mr. Hickey could answer my question. Why is this even on the agenda?

Andrew Doyle (Wicklow, Fine Gael)
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Head 5 relates to general functions. Section 10 of the 1994 Act will be amended as follows:

"(b) to provide a single structure for: (i) the administration, and financial management of all aspects of Irish horseracing, incorporating Registry Office functions, including registration of hunter certificates and participants in point to point steeplechases, with the exception of –

(I) the issuing of hunter certificates,
(II) the acceptance of horseracing entries, and
(III) declarations

for point to point steeplechases;
(ii) the processing of all charges on and payments to participants in the horseracing industry, including charges related to licensing, with the exception of payments for –

(I) the issuing of hunter certificates, and
(II) the acceptance of horseracing entries

for point to point steeplechases;"

Mr. Michael Hickey:

This relates to Senator Bradford's question. He could not have summed it up any better. He should be sitting here instead of me because he has it to a "t". HRI registers and promotes horse racing. Its first intention was to do the same with point-to-points, but now it is specifically itemised in the legislation that HRI does not want to do that, except for point-to-point steeplechases, entries, etc.

It is leaving all of that part of it to us. Its original intention was to take over all of that area but it then became evident that given the size of the organisation and its being spread throughout every parish in Ireland, a level of co-operation between the people involved in the voluntary organisations and those who help them to run it would be required. It no longer wants to get involved in the entries or promotion of the point-to-points as it does in respect of other racing. That is being left to us. The only aspect it is taking away is the hunter certificates, which provide revenue for us. The revenue we generate from that goes back into point-to-point races. I would like to outline briefly to the committee how we spend that money.

In the last year we provided mobile medical units for point-to-point races. It is a type of on-site treatment room. There are three such units in operation in Ireland. We supply and pay for these units, often with the assistance of a sponsor. We also supply the third ambulance at point-to-points. This is paid for from funds we receive from hunter certificate registrations. We also supply medical bags for the doctors, who are trained in the treatment of trauma in relation to point-to-points. We do a lot in respect of which we do not seek funding from HRI. This is possible only because we can register the hunter certificates.

Senator Bradford asked by whom this proposal was made. As I stated in my earlier remarks, it was not mentioned by Indecon. The question that arises then is where did it come from. It came from HRI. I do not know why it wants to interfere in this area. I think its purpose may have to do with streamlining, with it taking the money. As I said in my opening statement, the property rights belong to the national hunt committee. The intent is to give us back the money. However, I do not know if that will happen. There is no clarity in that regard. Why take the money in the first place? All this does is create an additional function. We provide for registration of the hunter certificates and provide online access for handlers registration. HRI wants to take over responsibility for the point-to-points and then give us back the money. What is the purpose of that? All it does is create another function. There is no streamlining involved.

Show jumping was mentioned. I was raised on a farm. I had a very good father who was a horseman. I rode for Bord na gCapall, which is one of the forerunners of this committee, and first competed internationally for it. I was grateful for that opportunity. I then represented Ireland all over Europe for a few years. Show jumping has come in handy. I then got involved in racing and won some point-to-points. I won some races on the track, where I also trained. I then got involved in breeding and bred Kicking King. That is an indication of the type of people involved in the Turf Club and national hunt committee - running point-to-point races throughout the country and generally giving freely of their time. Some of these people meet outside the Turf Club offices at 9.30 a.m. to travel to Listowel to license a racetrack. They often then travel to Limerick on their way back, for which work they are not paid a penny. There is no fee involved and they pay for their own lunches and petrol.

It is really a voluntary effort and it amounts to far more than just the four people on the racetrack. We have an appeals and referrals committee, about which Mr. Egan can speak in a moment, and there are other committees. It is a voluntary organisation, spreading to the point-to-point activities.

The Deputy asked about point-to-point races, and these are definitely a nursery, not only for horses but also for riders. We have 450 licensed amateur riders and the majority partake for fun. Generally, these people ride their own horses - whether they are young or old - and there are 1,000 registered handlers, 700 of whom are amateurs. These may be farmers from around the country who partake just for the love of the sport. Senator Bradford argued that people who attend point-to-point races may not go to a race meeting. They may not but they could go to a pub in the evening after a point-to-point if a seven-year-old horse being ridden by a son wins a maiden. They might look at this on television and have a great night. That is what point-to-points are about. We do not want to disrupt this process or nationalise it.

We are very appreciative of the money we get from point-to-points. The Turf Club gets €450,000 from Horse Racing Ireland for the integrity side, which is very necessary in today's environment. We sell very valuable horses to people in England and if they arrive but become lame in a week because of a painkilling drug being administered, there would be a question mark over the integrity of our sport. The integrity of point-to-points is just as important as that for racing. It is done on a very low-cost basis, with €450,000 being received to cover 115 fixtures. The racing element gets approximately €450,000 for 350 meetings. We do it with the tightest possible budget.

Some great horses have emerged from the point-to-point sector, including Best Mate, as well as jockeys such as Adrian Maguire. Ruby Walsh may have ridden in one or two point-to-points. It is a great nursery. There are 90 hunt committees around the country and these are the people responsible for having point-to-points where they are today. Ten years ago, ex-point-to-point horses won races on the track in the same season; the number today is over 1,000 in any national hunt season. These horses are aged from five upwards. We ask the committee to consider the heads dealing with point-to-pointing. As Deputy Lawlor and Senator Bradford mentioned, if this is not broken, why try to fix it?

There was mention of the handler's licence and the hunter certificates. The hunter certificates belong to the hunt committees initially and are issued by them. They have a very special relationship with the people who own point-to-point horses. One must remember that hunts take place over farmers' land and there is a special arrangement with people who help on a voluntary basis. There may not be a charge for the certs when they are received from the hunt. When the people come to us for registration, there is a fee of €50. The hunt committees are very particular about hunter certs and there is a question mark about them. We met representatives from the hunt committees approximately a month ago. Perhaps the tourism board would know more about it but there are questions being raised in certain quarters.

Mr. Denis Egan:

I am delighted that the committee members seem to have grasped the areas about which we are most concerned. There were a number of questions answered and Mr. Hickey dealt with most of those related to point-to-points. Mr. O'Byrne and I will take the remaining questions on the basis of who asked them.

Deputy Hayden's first question was about the situation with racing internationally with regard to promotion and regulation. Deputy Lawlor already referred to that. One need not look much further than what happens in the UK and the difficulties that arose there about 18 months ago when there was a big drugs scandal. The British Horseracing Authority, BHA, did excellent work and discovered that a particular trainer was using substances that he should not have been using. As it happens, that trainer trained horses for one of the biggest owners in the UK. The authorities did what they had to do but then there was a press conference where the regulator, wearing their promoter's hat, sat beside a representative of the owner and said that this would never happen again. That sent out all the wrong signals and was commented on by the racing press in the UK. It was said at the time was that there should be a respectful tension between the regulator and the promoter. That certainly did not happen over there at the time and it has not reflected well on the situation.

The Deputy also asked why the savings that were identified by the Smith & Williamson review have not been implemented. That is a very good question. Approximately €1.8 million in savings were identified, of which we would agree with approximately €1.5 million. That was the figure originally targeted by the task force when it started. Of that €1.5 million, €650,000 of those costs were simply a transfer of costs from HRI to racecourses. That has not happened. There were savings in personnel costs of approximately €500,000. At one of the final meetings we had with representatives of Smith & Williamson, they accepted that the majority of these savings would not be made in the Turf Club as we had already cut our cost base by 25% over the past five or six years. The balance of the targeted savings of €1.5 million were to come from improvements in IT and changes in policies. Michael Hickey referred to the changes in the online registration of handlers. We are working towards the introduction of online licensing for all licensees. That will result in savings.

The point must be made that the Turf Club is extremely conscious of cost. I believe many people's eyes were opened today when they heard about the huge volunteerism carried out by the members of the club. To be nominated, for example, to steward in Dundalk on a Friday night during December means one might leave Dundalk at 10 p.m. and in many cases have a two hour drive home and only arrive home at midnight, for the love of the sport. Senator O'Brien asked about the sustainability of that. Long may it last, and we have plenty of people who are willing to do it. Each racecourse has a panel of volunteers to steward. In many cases, people are disappointed that they are not being asked to steward often enough. We have only 1,400 positions to fill, but we would have no trouble filling 2,000 positions.

The third question asked by the Deputy related to the general costs of integrity. I will hand over to Neville O'Byrne shortly to elaborate further on volunteerism, but the total cost of integrity is approximately €6 million per annum. Of that, approximately €2 million relates to racing officials who turn up on a given day. We could have 12 to 15 racing officials at a fixture on a given day. There is approximately €500,000 for veterinary costs, €300,000 in medical costs and €1.1 million for drug testing. In view of what has been happening, certainly in the courts and overseas, that figure will unfortunately have to increase in coming years. Our security cost is approximately €670,000 and administration costs are approximately €1 million. There are legal fees of approximately €250,000 and there are some other incidental amounts, such as jockeys drug testing for which the figure is about €70,000 and point-to-point costs of €450,000, which Michael Hickey referred to earlier.

I am conscious that there are many questions so I will hand over to Neville O'Byrne, who will deal with the other questions asked by the Deputy.

Mr. Neville O'Byrne:

Deputy Heydon asked for an explanation of how there would be a conflict between our rules and HRI directives. That relates to head 5. As I said, the way the head is drafted could lead, effectively, to HRI being allowed to make directives which could conflict with our rules. This is largely a drafting point. If this is not intended, and I cannot understand how it would be intended, it is very easily cured by simply inserting a clarification that HRI directives cannot override our rules.

Under the current legislation, the HRI is subject to our rules. There is a convoluted history of directives, which I will not go into, that ironed out the conflict between HRI and ourselves when, in 2001, HRI took over a large number of our functions. A composite agreement was entered into in 2006. We want clarification that there will be no conflict and that, as the head says, we are solely and independently responsible for the making and enforcement of rules in Irish racing. That is all we are answering for.

One of the points raised included how our financial independence can be affected. The drafting is very simple. These heads say that all licensing income is to be paid to HRI and will be returned to us. Anyone who sells a product would not be happy with a third party collecting the money and then having to get it back from the third party. It goes further in that our licensing income, which includes all of the point-to-point money, will be taken into account in calculating the size of the integrity budget we get. There is no explanation or guidance on what this means and, theoretically, it could mean all of the licensing income could be taken into account, leaving no surplus and no money for anything else. If we want to do something outside the budget for the good of racing, we may have no money to do it. We are asking that someone has a look at this and clarify the point. It would leave us without any financial independence and no regulator could operate on that basis. If that is not intended in the drafting, it is easily cured but the wording in the current head is very clear.

The Deputy's final point was about the arbitration clause. We suggested this as an improvement on the existing arbitration clause. The Deputy asked whether it was ever used and I am not aware that the current arbitration clause was ever used but it is a cumbersome clause and requires us to go to a arbitration under the Arbitration Acts, which can be a drawn-out process and involves all sorts of people, including all sorts of expensive lawyers and senior counsel. We suggested an expert be appointed to resolve any disputes with HRI, including disputes about the budget. Naturally, when somebody is supplying an organisation with a big amount of money, there are always questions about what they are doing with the money and what they are spending the money on. We have no problem with that, except to be clear that there is a simple and inexpensive way of resolving disagreements that arise. That is a sensible solution and would help the smooth operation of the relationship we have with HRI. We have an ongoing relationship with HRI and the Government supplies a big chunk of our integrity budget through HRI. We want to make it work as smoothly as possible at all times.

Mr. Denis Egan:

I will move onto the questions put by Deputy Thomas Pringle, the first of which concerned off-course integrity checks. We do an amount of off-course integrity checks, both random stable inspections and drug testing. We visit between 50 and 70 stables each year to carry out random checks to ensure they are complying with the rules of racing. Last year, in respect of drug testing, we carried out 3,200 samples tests, including on the racecourse, of which 283 were taken in training. This involves going into the trainer's yard and randomly selecting ten or 50 horses, depending on where we are. We take away the samples and if they disclose the presence of a prohibited substance not recorded in a medicines register or, in other words, prescribed for the horse for a legitimate reason, the case is prosecuted. From that point of view, we see one of the biggest issues in future as drug testing out of competition.

From 1 January 2015, we will carry out random drug testing on all horses once they entered the racing system, even if they are not in training, until they officially retire.

This is in line with international practice because the view is that if performance enhancing substances, such as anabolic steroids, are being given to horses, they are not being given close to competition day but when the horse if off, maybe in a field somewhere. As I said, we do not have any evidence that it is happening here but it is something of which we need to be conscious and we will increase our testing on that from 1 January next year.

Mr. Neville O'Byrne:

On the next point Deputy Pringle raised about the consultation requirement, our difficulty with this is not that we do not want to consult with people because, in fact, on a non-statutory basis, we consult widely with the industry, in particular when we want to change rules. We have no major difficulty with that but what we have is a technical difficulty that being asked to consult, or being required to consult, under an Act, both in relation to the making of our rules and to the fixing of our licence income, would impose obligations on us which would not allow us to act effectively with a free hand with which a regulator should act.

Again, this is a point which can be easily cured. As I said, we have no objection to being open and transparent and to consulting when we have time to do it, but there are occasions when things arise very urgently, or there are things which we would need to do very quickly, and we simply would not have the time. We are simply asking that we not be required to do this on a statutory basis because we actually have done so when we have had time and when we have believed it has been necessary. The previous requirement was that we inform HRI, which we did. This is a change and clearly it is not being made without some purpose. That is the concern I have.

The other point Deputy Pringle raised, on which we have touched but which I think it is worth returning to briefly, is about the money going around in a ring. Essentially, we get income from licensing participants in the sport. That money is used essentially to pay our staff who have to do the work to carry out this function, which is an integrity function. It relates to jockeys, trainers, drug testing and all this sort of thing. Essentially, we contribute to the cost of integrity because our staff are paid from our income to do this work. We cannot quite see how it can be reasonable that we should be asked to give all this money to a third party, HRI. We get it back but then it is taken into account in the integrity budget. That is an area in the Bill which is not fair to us, which leaves us in a situation where we could be financially without any support and which affects our integrity. It is well known to everybody in this room that if a person is beholden to another for money, other than on a very strict statutory basis, he or she has some power over that person. Under the current legislation, HRI has an obligation to fund the integrity budget and the rule is that if we cannot agree the budget, there is arbitration, which is fine, but this is a step further because unless this is clarified, essentially it has the potential to leave us with no money. I think those were all the questions Deputy Pringle had.

Mr. Denis Egan:

Mr. O'Byrne will address Senator O'Brien's point on volunteerism.

Mr. Neville O'Byrne:

Volunteerism is at the heart of what goes on in the Turf Club, the Irish National Hunt Steeplechase Committee and the point-to-points. A huge amount of work is done and I think Mr. Egan has given the figures for the number of race meetings and the number of officials we provide. Neither the Turf Club or the INHSC ever paid a dividend in 250 years. The reverse is the case. All of the members have to pay to be members. We have to pay an annual subscription. It does not take a huge amount of calculation to say that if our members had to be paid at the same level others are paid for the work they do in the horse racing industry, it would be a huge cost to the industry. I think that is a very fundamental point and does not need a huge amount of explaining.

Mr. Hickey has given a very clear picture about volunteerism in the point-to-point world. There is a huge amount of volunteerism in the national hunt world and in the flat world, where people provide services. Our committees, for example, are licensing committees and spend a huge amount of time vetting jockeys and trainers, checking yards and doing all this sort of thing. The Turf Club has been in existence for 250 years and there is a pretty good chance that given a fair crack of the whip, it will continue.

Mr. Denis Egan:

If I could just add to that, as somebody who has been involved in most of the appeals and referrals, we are fortunate that the chairman of our appeals body in one of our two divisions is a former Supreme Court judge and the other chairman is a judge in the Circuit Court. I will refer to one recent appeal case, but I will not mention it by name. Unfortunately, however what is now happening in the Turf Club in relation to appeals is more akin to what goes on in the High Court and the Supreme Court. The first hearing of the case to which I refer had a 19 page written judgment. When the case went to appeal, there was another 20 page judgment on three preliminary points. The final decision was handed down a few weeks ago and the judgment will be published in the next weeks or so. Again it is a document of ten to 15 pages with references to High Court cases, standards of proof and whether the Turf Club has jurisdiction in different places. It has become a legal minefield.

If the committee has to sit in judgment on whether interference in a race affected the placings, that is not a major difficulty, but there are cases that are more and more litigious and anything in legislation that could impact on the way we carry out our role could indirectly impact on that. We would not welcome that.

Senator O'Brien made a point on cost savings. I tried to answer that question in my response to Deputy Heydon. Senator O'Brien asked also whether entries and silks have anything to do with the rules of racing. Silks are not a major issue from our point of view but entries have a major bearing on us. Let us suppose that the proposed directives are introduced and that, for example, horse racing entries and declarations become governed by a directive as opposed to a rule of racing. If a horse which is not qualified to run in a race gets into that race, how will the horse be disqualified? HRI does not have a disciplinary function so it must be governed by a rule of racing whereby it can appear in front of one of our committees and be dealt with. The current legislation works fine. If any party applies to HRI for registration and is turned down, he or she has the right of appeal to the Turf Club appeal body. There is a structure in place that works very well at present.

Mr. Neville O'Byrne:

Senator O'Brien also raised questions about the Curragh, but before I respond to them I wish to comment further on head 5. What Mr. Egan has said illustrates the concerns of the Turf Club about head 5 and about the interpretation of what is meant by HRI directives, in particular where there is a proposal to remove the obligation for its directives to comply with the rules of the Turf Club where they relate to race integrity.

I do not propose to go into the history of the Curragh, but the proposal on the Curragh which has been approved by the members of the Turf Club is that essentially a new company is going to be set up with effectively three shareholders, the Turf Club, HRI and a number of investors who will come together to redevelop the Curragh. In response to Senator O'Brien's question on what the Turf Club is doing about the Curragh, the Turf Club will effectively will lose control of the Curragh to the new entity because the Turf Club will only be a one third shareholder in the Curragh, but the reason - and this issue was widely debated - is that we all believe it is good for Irish racing that the Curragh needs to be redeveloped and we are being supported very strongly by HRI in this and we have a number of investors who are prepared to support it as well. I believe everybody who is involved in Irish racing almost without exception would agree that it is for the good of Irish racing that the Curragh be redeveloped. That is the proposal and it is going forward.

Mr. Michael Hickey:

Deputy Heydon asked if it would not be a good thing to have point-to-point racing included in the proposed legislation. I think that point-to-points have worked very well without being in the Act. We as a committee, the hunts and the people involved do not see any need for point-to-points to be nationalised.

Deputy Lawlor asked about the starting stalls being under the remit of HRI, and if I may answer, and Mr. Neville might add to it if he wishes, not only are the starting stalls under the remit of HRI but the stall handlers are employed by HRI. That means that if there is a problem at the start to do with loading a horse that we need to investigate, we cannot do it because the stall handlers, who do a great job, are employed by HRI. There are times when we might need to hold an inquiry, but the Turf Club cannot bring the handlers into the stewards' room during the inquiry.

The same applies to the photo finish, which one would think is a regulatory function.

It is no secret that the capital development of race courses is funded from a percentage of the media rights which the HRI holds back. Deputy Lawlor made reference to us going cap in hand to HRI if we want something and that is exactly what will happen if the heads of the Bill remain as they are. We are a separate organisation to HRI and perform a completely different function. We are internationally acclaimed for our rules and regulations. One only has to compare the way we handled the whip issue with the way the British handled it. We put on a show at the weekend, in conjunction with the entire racing industry, that anyone in the world could be proud of. Why should the regulatory body be put in a position where it has no autonomy and has to get the agreement of HRI if it wants to entertain dignitaries from another jockey club? Mr. Egan, for example, gave a talk to the American Jockey Club recently but if we wanted to invite representatives of that club here, we have no financial autonomy to do so and must ask HRI for €1,000 to entertain them. That would be a ridiculous situation for an organisation which has handled Irish racing at an international level for so many years. I would ask the committee to look again at that aspect of the heads of the Bill.

I hope I answered the Chairman's question about point-to-point racing adequately.

Andrew Doyle (Wicklow, Fine Gael)
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Yes.

Mr. Neville O'Byrne:

The next question was from Deputy Barry and concerned the arbitration clause. I hope that in the previous answer I gave I explained myself clearly. We simply want to get an arbitration clause inserted which references an "expert" as distinct from an "arbitrator" and which will be quick and inexpensive to operate if we get to a stage where we need it, as outlined in our detailed submission. The Deputy also asked if HRI has experts on our rules. In fairness to that organisation, it does not have such experts and should not be expected to have them. Our rules are totally separate to those of HRI. The whole thrust of what we have said here today is that the regulator must be separate and independent. The only request we make is that what is contained in the heads of the Bill at present, namely the fact that we are solely and entirely responsible for the making and enforcing of regulations, is not diluted, either accidentally or by design, elsewhere in the legislation.

Mr. Denis Egan:

Deputy Barry also asked how our integrity funding is provided. It is provided monthly on the basis of our submission of monthly accounts.

Andrew Doyle (Wicklow, Fine Gael)
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Thank you very much, that was a comprehensive discussion. Everyone has had a fair hearing or at least I hope so.

Mr. Denis Egan:

Could I just briefly sum up our contribution?

Andrew Doyle (Wicklow, Fine Gael)
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Of course.

Mr. Denis Egan:

On behalf of everybody at the Turf Club I wish to thank the committee for taking the time to listen to us this afternoon. We really appreciate it. Our main message is that we would like any new legislation affecting the horse racing industry to unequivocally endorse the need for fully independent regulation of the industry by recognising that the regulator has sole responsibility for regulation. An effective regulator must be independent of commercial interests to carry out its functions and in that context, must be financially independent. We would be very grateful if committee members would take those basic points on board.

Andrew Doyle (Wicklow, Fine Gael)
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That is a fair summary.

There was difficulty in scheduling the meeting. We were asked to conclude by the end of the summer session but as a committee we collectively agreed to insist on all stakeholders having an opportunity to make presentations before the committee. If the principle of scrutiny is to work and be successful it is only fair that we provide an independent and objective forum.

As I said at the outset, I understand the meeting is being broadcast live through the Oireachtas television channel. In that vein we have, I hope, given everybody a fair opportunity to make their points and voice their observations and concerns with regard to the draft legislation. The Bill is at a draft stage, so the object of the exercise from an administrative point of view is that these factors are taken into account now rather than when the Green Paper is published, or the Bill is on Second Stage or has to be dealt with more comprehensively on Committee Stage. I am sure that everybody's wishes will not be reflected in the Bill but it is to be hoped that a reasonable effort is made to accommodate everybody's fundamental concerns.

The object of the exercise is to have a structure in place so that if and when other Bills which are the responsibility of other Government Departments, namely, the Departments of Justice and Equality and Finance, are enacted the structure of the organisation which runs horse racing in this country is adequately set up to promote the industry and advance it to its full potential. There is no doubt that it is a major flagship industry for the country. I like others am probably more affiliated with the non-thoroughbred part of the industry but I fully appreciate its value for the country. It is a non-urban industry, something which is not found easily.

We have concluded our hearings. The committee will meet in the next number of weeks to finalise a report which will be submitted to the Minister, with a view to it being taken on board before the Bill is drafted and published.

As there is no other business the committee will adjourn until Tuesday, 23 September. The Minister is due to come before the committee to discuss pre-budget submissions. We are not sure what time the meeting will be held as Question Time in the Dáil is at 2 p.m.