Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The most recent estimates available suggest that the horse and greyhound racing industries combined underpin in excess of 24,000 jobs and stimulate €1.6 billion in economic output. These industries receive financial support from the State through the Horse and Greyhound Racing Fund, under section 12 of the Horse and Greyhound Racing Act 2001. My Department makes payments from the fund to Horse Racing Ireland and to Bord na gCon.

In the period 2001 to date, a total of €1.03 billion has been paid from the fund to the horse and greyhound racing industries in accordance with the provisions of the Act. The cumulative upper limit on payments from the fund, provided under the relevant regulations, has therefore been reached.

Exchequer funding provided from the fund is pivotal to the survival and continued development of the horse and greyhound racing industries. To give effect to the provisions of budget 2016, this cumulative upper limit must be increased by regulation.

The Estimates for my Department, passed by both Houses as part of budget 2017, include an allocation of €80 million for the Horse and Greyhound Racing Fund. This will be distributed in accordance with section 12(6) of the Horse and Greyhound Racing Act 2001, with 80%, or €64 million, going to Horse Racing Ireland, HRI, and 20%, or €16 million, to Bord na gCon.

To allow my Department to provide the moneys allocated in budget 2017, it is necessary to comply with the technical requirement under section 12(13) of the Horse and Greyhound Racing Act to increase the cumulative limit on the amount payable from the Horse and Greyhound Racing Fund by €80 million to some €1.118 billion. This is achieved by way of the regulations submitted to the committee today. The aggregate limit on the Horse and Greyhound Racing Fund has been increased in this manner in 2004 and every year from 2009 to 2015, inclusive.

It is estimated the Irish bloodstock industry provides 14,000 jobs and contributes almost €1.1 billion to the economy. In 2015, bloodstock export sales rose to €268 million in what was a remarkable year for the Irish bloodstock industry. The industry is also estimated to account for up to 80,000 tourists to Ireland each year. These are among the estimated 1 million plus people who attend horse races each year in this country.

Ireland holds a distinguished position in the thoroughbred racing world, being the biggest producer of thoroughbred foals in Europe, and is the fourth largest producer in the world. Approximately 40% of the European Union's output of thoroughbreds and 11% of the total worldwide are produced in Ireland.

The Horse and Greyhound Racing Fund has been pivotal in shaping the destiny of this dynamic industry. It has helped Ireland to become a world centre of excellence for horse racing and has allowed Horse Racing Ireland to undertake a capital investment programme that has underpinned growth in the sector.

The horse racing industry satisfies all the critical requirements for success in terms of employment and foreign direct investment and it is the type of export-oriented industry we need. The industry has been a flagship for this country and has had an immeasurable influence on Ireland's international reputation in recent years.

Government funding of this key industry is an excellent opportunity to yield a high return for its investment. Support for certain strategic industries is important to future economic growth and can provide widespread benefits for our society as well as for our economy.

The greyhound racing industry is also an important driver of employment and economic activity in both rural and urban areas. Bord na gCon estimates that the greyhound industry employs more than 10,300 people and contributes an estimated €500 million in economic output to local economies around tracks which have a wide geographic spread. Bord na gCon reports that since 2002, in excess of 10 million people have attended greyhound racing meetings.

The board itself employs more than 700 people including, both full and part-time, and has an annual turnover of approximately €40 million. Funds generated from racing are reinvested in the industry through contributions to prize money and grants to various bodies involved in the greyhound racing and breeding sector, as well as promotion of greyhound welfare and the regulation of the industry.

The challenge for the board is to encourage the development of a commercial greyhound racing and breeding industry built on a customer focused, high quality entertainment product, which meets the highest international standards of regulation.

The funding being provided to the greyhound racing sector helps sustain a long-standing tradition as the industry is part of the social fabric of our country. This funding underpins economic activity in what are in many instances less affluent regions of the country.

It has also contributed significantly to the improved facilities now available at greyhound tracks around Ireland. Greyhound racing is an activity that is inextricably linked to the farming community, and while it is undoubtedly part of the fabric of rural Ireland, it also enjoys a strong urban support base.

The overall objective of the Government is to ensure the horse and greyhound racing industries achieve their maximum potential and in so doing contribute to the economic and social development. Governments of all persuasions have acknowledged the importance of these industries and have supported them through legislation and policy initiatives over a long period. Without this support, these vital industries would simply not survive.

The advent of new technologies and business models has challenged Government to re-evaluate the funding mechanisms for the industry. As part of its overall commitment to the industry, the Government has addressed, through legislation, the anomaly whereby remote and online betting operators were outside the tax net. The Betting (Amendment) Act 2015 came into force on 15 April 2015.

The Act brings betting exchanges and Internet and mobile betting providers within the scope of the existing licensing regime, and extends the existing 1% turnover tax on land-based bookmakers’ activities to online and mobile bookmakers. The Act also means that a 15% commission tax for betting exchanges has also been implemented.

The Act also means that a 15% commission tax for betting exchanges has also been implemented. These measures have had a very positive affect on revenue streams with significant increases being realised. Betting tax has increased by €20 million in 2016 when compared to this time last year.

Both Horse Racing Ireland and Bord na gCon have operated through challenging economic conditions over the past several years and my predecessor as Minister, Deputy Simon Coveney, has had the activities and operation of both bodies reviewed.

The Horse Racing Ireland Act, which gives effect to the recommendations in the Indecon report, came into force on 8 February 2016 with certain sections commenced on 9 March 2016 and further sections due to commence in January 2017. The Act introduced a range of improvements in governance and accountability arrangements, many of which derive from recommendations made by Indecon International Economic Consultants following their review of the sector.

Indecon International Economic Consultants were also commissioned to conduct a review of certain matters relating to Bord na gCon in order to assess the suitability of the legal, governance and regulatory framework supporting the greyhound industry and to identify opportunities to maximise its commercial income. In that regard, I will shortly bring forward the heads of a greyhound industry Bill to ensure the principles of good governance and regulation are clearly and unambiguously set down in primary legislation. In broad terms the Bill seeks to implement the deficiencies in the existing legislation as identified in a report authored by this committee in January 2016, and in both the Indecon and Morris reports. The Bill addresses the governance of Bord na gCon, strengthens regulatory controls in the industry, modernises sanctions and improves integrity with a view to building a reputation for exceptional regulation in the sector. The Bill will strengthen the Irish greyhound industry, enable it to deal with the existing challenges and maximise its future potential. I expect this committee will have a significant role to play through the pre-legislative scrutiny process and I look forward to engaging with members in that regard.

Without doubt, Horse Racing Ireland and Bord na gCon face significant challenges as they work to grow and develop the horse and greyhound industries in an extremely competitive market segment. I am, nonetheless, confident that these industries have tremendous growth potential with sporting, leisure, tourism and cultural appeal across a wide demographic, both national and international. The thoroughbred horse industry is a major driver in the economy and both industries breathe life and jobs into their respective communities from the grass roots up.

I very much appreciate the contribution the members of this committee have made to the debate on the future of these critically important industries. I believe the €80 million allocation is vital to help secure rural jobs and sustain communities. Many parts of rural Ireland face ongoing challenges in terms of declining populations, a lack of jobs, a shortage of enterprise and poor infrastructure. The Government plays an important role in considering policy and providing an input into legislation to counter these problems and nurture all potential growth. I am confident that it is the goal of all of us here to realise fully the contribution of these sectors to the Irish economy, to employment and to the social and cultural fabric of this country. The degree of success of these initiatives is dependent on the hugely important contribution made by the Horse and Greyhound Racing Fund.

A copy of the draft regulation has been circulated to the members of the joint committee. Section 12(13) of the Horse and Greyhound Racing Act 2001 provides that a draft of these regulations be laid before both Houses of the Oireachtas and a resolution approving the draft be passed by each House before the regulations are made by the Minister. Accordingly, I ask members for their support to ensure that Horse Racing Ireland and Bord na gCon receive the funding provided for in budget 2017 and that the very important role of these industries, and the economic activity generated by them, are sustained into the future. I commend the motion to the committee and I look forward to discussing any matters arising.