Aideen Hayden (Labour) | Oireachtas source

I am no expert on the gambling industry but I initially approached this Bill from a fiscal perspective. I thank the alliance for racing and breeding, which sent me a copy of their strategy for budget 2015 and a document on the taxing of betting in Ireland. This provided me with an insight I did not previously have on the issue of gambling in Ireland.

The submission illustrates from a fiscal perspective that Ireland is collecting less betting duty today than was collected in 1990. In 2001, when the Horse and Greyhound Racing Fund was established by law, betting duty of €67.8 million was collected. I find it amazing that any tax on an industry that has grown substantially since 1990 could possibly be raising less revenue today than it did 24 years ago. That decline is attributable to the reduction in the rate of duty - which at one stage was 20% - to 1% and the fact that the betting industry has migrated from the mainstream betting shops, which some of my colleagues have already spoken about very eloquently, to telephone and online channels operating from offshore havens where no tax is payable.

This is a taxation issue in more than one area. I am surprised that it has taken so long, because the Internet did not arrive on our shores in the past 18 or 36 months; this is an ongoing issue which affects not just betting but many other transactions in which a product is bought overseas and brought into this country with no tax on the transaction. I note that the economic downturn since 2007 has taken its toll on discretionary consumer spending generally, which has affected this industry as well as many others.

I refer to some relevant points. Race course attendances have declined from their peak of 1.5 million in 2007 to about 1.24 million, but they are still equivalent to the total combined attendance at all the GAA hurling and football championship matches. This was a shock to me. These figures show that this is a very important issue and that the duty and taxation collected is very important.

The Minister of State and some of us in the House will be aware of the fact that despite intense promotion by the bookmakers of alternative media for gambling, including football, cricket and political contests, horse racing remains by far the favourite vehicle for betting. The Minister of State said that the issue of the rate of tax was not a matter for this piece of legislation but, as other Senators have said, it is a matter that needs to be addressed.

The executive summary of the report on betting taxation includes what I call fudges. It is known that the off-course betting duty of 1% is the lowest of any racing country but there is no correlation between the rate of tax imposed on betting and the support for the industry. There is a general consensus among the Minister of State and previous Ministers for Finance that nobody likes a tax that is specifically earmarked for any particular function but, given the importance of the horse and greyhound racing industries, it is important to link A with B and to put in place some system to ensure investment in the industry is in some way related to the tax that is gathered from that industry.

I was very impressed by the argument and cogent justification put forward by the industry advocating for, at the very least, a 2% rate of tax and linking it to the levels that would be imposed and a VAT rate of 23%, comparable with other consumer expenditures. It is estimated that the rate would need to be between 3% and 4% versus the 1% currently charged. I make these comments on foot of my interest in enhancing the revenue for services and not just for the promotion of an industry that is clearly very important to the economy in that it attracts foreign direct investment in the horse racing and bloodstock industries. It is an important tourist attraction and it contributes to the overall moneys available to the Exchequer to provide other services such as medical and housing services.

I welcome the legislation, which is a step in the right direction. Some issues have been raised about opening hours, and I share the concerns of my colleague Senator Maurice Cummins. The Bill will create a new source of revenue for this country. The Bill provides for consumer protection against fraud and it provides some degree of regulatory certainty, which has been lacking. It must be backed by effective sanctions and the proof of the pudding will be in the effectiveness of those sanctions. There needs to be some correlation, if not a direct one, between the duty imposed and the financing of the horse and greyhound racing sectors in order to provide more tourism revenue to the country.

I do not believe that different sectors of the economy should be subjected to differing rates of tax, whether that be corporation tax, VAT or other excise duties. Different sectors of this economy which have been favoured to some extent should not be treated in a different way from other sectors, and achieving this is long overdue.

I have a concern about the provisions relating to summary conviction for engaging in a betting transaction with a person under the age of 18 years, in which it is a defence to say that it was believed that the person was over 18 years because the person ticked a box to state that he or she was over 18 years. That is a difficulty with the Bill and it will be a difficulty with regard to protecting young people from engaging in gambling. The Bill's provisions will be difficult to enforce, in my view, given the vastness of the Internet and the jurisdictional issues. I reiterate that there needs to be strong enforcement of this Bill.

I am very much of the view, recently enunciated by the OECD, that in order to protect the global economy and provide a level playing field we must close down tax avoidance loopholes. This country must be diligent in that respect.
I will conclude by quoting from an article in theIrish Independentlast January by William Hill, who described a call centre in Ireland, a bookmaking operation in Antigua, an account in the Isle of Man, and odds setting and risk management in Leeds, all of which were linked together. I know it is not related to this Bill, but we should target the advertising of online betting in the same way that we have banned advertising in other areas, particularly for cigarettes. Allowing the advertising of online betting encourages impulse gambling. Mr. Declan Lynch, the author of Free Money, has claimed that throughout history there has never been another invention that has so suited addiction. It is more likely to affect young people who spend huge amounts of their time online. I will leave the Minister with that thought and ask him to give it some attention.