Mr. Arthur Cooper:

Good afternoon. The Irish Harness Racing Association, IHRA, thanks the committee for the opportunity to review the Indecon report, provide an update and detail the ongoing development and progress of the industry. The committee's confirmation of support for the harness racing industry and the IHRA has been noted. Commenting on the Indecon report, the Minister for Agriculture, Food and the Marine, Deputy Creed, recently stated, "I acknowledge the potential of the harness racing sector and we have the basis on which to proceed." It was acknowledged in the Seanad last December that this committee "on an all-party basis, has been very supportive of the Irish Harness Racing Association's potential for several years" and that "The agriculture committee continues to support it on an all-party basis". The IHRA is grateful for these comments.

Following the release of the Indecon report, and more so during the past six weeks, there has been discussion about harness racing going forward and the IHRA's current position on governance, potential and enthusiasm. One word that has not been mentioned is "expertise". There has been talk of the IHRA needing to view things as a beginning, a first chapter and an opportunity to enter into a meaningful relationship. However, what seems to be forgotten in these conversations is the fact that the IHRA venture in its current standing commenced more than four years ago. Through business expertise, this venture has moved beyond a beginning, written several chapters on progress and development and forged meaningful relationships with key players both locally and internationally and, most importantly, with Government on an all-party basis. Enthusiasm has been an important ingredient in driving this venture. However, enthusiasm alone is of no value if there is not a level of expertise. It is the IHRA's level of business expertise and acumen that has driven this venture to where we stand today, so much so that Indecon recognises that the IHRA is "at a critical juncture" with "the potential to expand".

Today's presentation is important for all of us because it is the first formal opportunity the IHRA has had to bring everyone up to speed on the progress and development of the industry over a period that extends beyond the past 12 months. It is now 12 months since the IHRA completed its engagement with Indecon and eight months since the report was delivered to the Department. These past 12 months have seen major developments that will continue the ongoing progress toward a successful and vibrant harness racing industry.

Included in these major developments was the successful Pari Mutuel Urbain, PMU, meeting that took place in June 2017. This was the first Irish harness race meeting to be broadcast and bet on in France, which is globally the largest harness racing market. The meeting was conducted in Dundalk and its significance as a milestone cannot be overestimated not just for the sport, but also for Ireland. Turnover in France on the four races amounted to €750,000. The feedback from the PMU and Le Trot was that this meeting performed well ahead of budget and received a better response than other racing normally held at that time of day. Significantly, across all racing codes - thoroughbred, greyhound and harness - this meeting provided commissions higher than ever previously received for Ireland from tote wagering. I ask the committee to keep this statistic in mind as this was only the first Irish harness meeting ever broadcast and wagered on in France. In the context of the turnover that was achieved on this meeting, the Indecon report provides a key insight into the difficulty now being faced by the IHRA. Indecon states:

[T]here is potential for the harness racing sector to expand significantly and to enhance its economic contribution but we note there are significant barriers to development which the sector faces. These include the absence of suitable track facilities to televise meetings and this is inhibiting the growth of the sector. If the potential of the sector is to be realised there is a need for increased investment.

Indecon also notes, "Unlike for thoroughbred racing, there is currently no contribution to prizemoney from the Irish Government." One of the returns on investment Indecon notes for horse owners is linked to prize money. Using its own initiative, the IHRA has delivered more than a threefold increase in the aggregate prize money on offer since 2013, or a cumulative 49% per annum growth for the past three years. In 2017, total harness racing prize money amounted to €685,000. This year, the IHRA is budgeting industry turnover in the region of €1 million. In total, thoroughbred and greyhound racing received a budgetary appropriation of €80 million, for which greyhound racing's portion was €16 million. I reiterate that the IHRA was able to achieve more international tote commission revenue from just one race meeting being broadcast internationally than the other two racing codes have generated. This was achieved with no financial support from the Exchequer.

Moving on to the key points from the Indecon report, the first recommendation states, "Responsibility for the operation of the Harness Racing industry in Ireland should be vested in the IHRA." I am pleased to announce the operation of Irish Harness Racing is now centralised in the IHRA. This means that all decisions regarding all aspects of the industry, including capital and other expenditure, are determined by the board of the IHRA, with all income accruing to the IHRA. In addition, the operation and management of racetracks and races will move from the individual clubs to the IHRA. Therefore, the first recommendation has been completed.

The second recommendation states, "Indecon are fully supportive of IHRA plans to enhance their corporate governance to align with best practice." Regarding governance, Indecon stated:

[T]he governance structures at the commencement of this review were not developed as yet to an adequate level to align with the best practice. However, this is accepted by the IHRA and they have set out how they propose to restructure the industry and governance reflecting the growing scale of activity.

The key point to note here is that Indecon specifies "at the commencement of this review", not at the end of or during it.

What is more Indecon said that the IHRA accepted this view and furthermore set out "how they propose to restructure the industry and governance reflecting the growing scale of activity". For the entirety of 2017, the IHRA set about addressing the matters of governance. It can report that recommendations provided by Indecon for early implementation of IHRA plans to enhance its corporate governance to align with best practice have been progressively adopted over the past 12 months. We can confirm that the following items identified within the report have been addressed: expanding the skills of the board, including the appointment of new independent directors; enhancing risk management and control, including establishing an order and risk committee; implementing and monitoring a risk register; establishing enhanced internal controls and checks; and ensuring the IHRA board operates in accordance with best practice governance and procedures. Board size has increased, with greater levels of experience and expertise being identified and brought in, while board training has been ongoing. Sub-committees are being established and have been put in place thereby enhancing internal controls and checks. It is also important to note, as Indecon has done, that corporate governance for the IHRA is not something that is only beginning to be addressed with the release of this report. Corporate governance has been going on for the IHRA over the past four years. Abiding by practices of corporate governance has been a standard for IHRA through the entire journey.

This was a prerequisite when engaging in forging its relationship with Le Trot. The IHRA is now entrusted with the oversight of hundreds of thousands of euros each year, managing prize money subsidies from France. To be admitted to the Union of European Trotting, UET, the IHRA had to undergo vigorous audit requirements. Upon successful completion of this audit, full membership was then granted. The following point is also critical: for the IHRA to have its races broadcast and wagered on globally in many nations, integrity and governance need to be in place and at an international optimal level. Indecon has not said that the IHRA is not fit for purpose in its current form. It has recommended that responsibility for the operation of the harness racing industry in Ireland should be vested in the IHRA. This has been achieved and "Indecon are fully supportive of IHRA plans to enhance their corporate governance to align with best practice".

I would like to discuss other aspects of the Indecon report. The report has proved to be a wonderful resource for the IHRA to measure progress and to identify what still needs to be done. As the Minister for Agriculture, Food and the Marine, Deputy Creed, has highlighted:

[The Department]... commissioned the report in good faith and we recognise the potential of the IHRA to become the kind of body with which we can engage in a structured way and into which we confidently invest taxpayers' money... The Indecon report provides for that so we have that basis on which to proceed.

It is for this reason that the IHRA has identified the delivery of the report to the Minister in May as a milestone in the four year journey and a matter of significance in the past 12 months pointing towards the exciting future of the industry. The IHRA is now working toward addressing the five recommendations identified as within the report and accepts the position of the Minister when he says: "Our only requirement is that the IHRA now deliver on the Indecon requirements."

Recommendation 5 states: "Indecon recommends that the pilot integration programme implemented should continue." Indecon also states: "To help address this issue [of road racing], the IHRA developed a horse appreciation and education programme which was given Government funding, and was run in 2016. The purpose of this initiative was to offer a horse and welfare education programme to those who are 'road-racing'." The first pilot programme was very successful. However, for the project to be sustainable over the long term appropriate facilities and infrastructure are necessary. This was made abundantly clear when several graduates expressed their frustration in 2016 that after having successfully completed the course, there were no facilities available for them to continue and to reinforce what they had learned. This meant they could not buy a horse as there were no training or stabling facilities available for use. Importantly Indecon also makes this point: "Effects [sic] should also be made to encourage past-programme participants to engage in the sport." The IHRA wants a successful training programme to encourage people to be integrated into harness racing. Unless the appropriate training and racetrack facilities are in place, this education and integration programme will fail to achieve its key objective and purpose.

The report also highlighted that the Government has previously supported several urban horse projects that involved in one case an allocation of €2.25 million. This was in contrast to the relatively low cost of the IHRA pilot programme of €22,000, which was entrusted to the IHRA by the Department. The Minister stated in December that "As a signal of good faith, we are committing in the region of €50,000 to the Irish Harness Racing Association for 2018 as a continuation and expansion of the pilot project". This goodwill gesture by the Minister is appreciated, but more important is the question of whether it would assist in, or contribute to, resolving the road racing social issue. It is the belief of the IHRA that equal to providing those funds is the execution of those moneys.

The IHRA knows that it is pointless handing over funds if they do not deliver on the targets being set here. Unless there is a racing venue and training facilities the integration programme cannot succeed in being all that it needs to be. The IHRA will identify the needs of this programme in its five year strategy document. However, until these infrastructure matters for a post-integration programme are addressed, the IHRA does not want to use and in turn waste public money on a programme that cannot deliver the long-term benefits for which it was designed. The IHRA looks forward to working with the Minister and his Department. However, the only way there can be true public gain is by addressing this appropriately and thoroughly. Within the recommendations Indecon concludes: "The Harness Racing industry in Ireland is now at a critical juncture. Previous experience of other countries... [has] shown that there is the potential to expand, and an expansion may also be achievable in Ireland." The IHRA knows that to prepare a comprehensive five year strategy plan requires certain processes to be undertaken. These processes will take several months to complete before being ready for presentation.

At present, the IHRA is formulating a programme to ensure stakeholders, members and other interested parties are engaged in the consultation process. The IHRA is keen to have all voices heard. Included in the strategic plan process is the evaluation of racetrack development. This will need to occur before State funding can be forthcoming. The IHRA recognises and appreciates the requirements of this process. However, it also notes this will inhibit its international market development and the integration programme. The remaining recommendation from the Indecon report states:

The Board of IHRA should identify a funding programme to support the expansion of the sector including the role of Exchequer seed funding for the sector.

THE GOVERNMENT SHOULD CONSIDER PROVIDING SOME SEED FUNDING FOR THE SECTOR...

The IHRA board is preparing a document that identifies the seed funding requirements to support the expansion of the sector. This is a costed programme, as required by the Indecon report, identifying the areas of expenditure. This will be prepared over the next weeks and will be available. The IHRA accepts that this seed funding is provided on a pilot basis and its results will be evaluated before further funding, in other words, State funding is considered. The key areas for the seed funding allocation are process costs for the preparation of the five-year strategy plan; legacy expenses incurred in preparation of the Indecon report; UET audit, governance and membership; Le Trot and France negotiations; international representation on committees; governance and governance training expenses; data development to an acceptable international level; and maintaining and enhancing the welfare and integrity of racing. The Indecon report states that the IHRA does not currently have employees or significant resources. At present, there is no confirmed amount for seed funding being requested nor is there an indication within the Indecon report that this seed funding is conditional on the IHRA delivering a five-year strategic plan. They are two separate items within the Indecon report.

Recommendation 4 of the report makes the distinction between State and seed funding and, collectively, we all must do the same.

The IHRA achieved many milestones during the past four years. We will continue to deliver during 2018 and we hope the Department, the Minister and the committee will continue to support us. We hope a realistic amount of seed funding is appropriated to the IHRA in the coming month to ensure it can deliver to the Department and Minister the strategic plan that is necessary to ensure State funding is forthcoming.

Indecon has indicated that expansion of the sector is possible and that both seed and State funding should be considered. This month two years ago, in 2016, the committee released its report. On that occasion there was a recommendation that the IHRA receive appropriate funding to develop the sport of harness racing from an increased funding stream. Today, we know the Minister, Deputy Creed, and the Department are on board, as are all parties. The IHRA is ready to do the work to deliver. As the Minister, Deputy Creed, has said, the Department has stated it has a fund and a document on which it can make progress. Let us all make progress in 2018 and let us begin by providing the IHRA with an appropriate seed funding allocation.