Mary Upton (Dublin South Central, Labour)
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Question 619: To ask the Minister for Arts, Sports and Tourism her plans for the future funding of the horse and greyhound racing fund; her views on whether it is feasible to continue to supply direct State funding into the fund; her further views on taxing remote gambling; and if she will make a statement on the matter. [14514/10]

Mary Upton (Dublin South Central, Labour)
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Question 620: To ask the Minister for Arts, Sports and Tourism if she will convene a meeting of all the stakeholders in the racing and betting industries in order to see the agreement that can be reached to help each of these industries to survive during the current economic climate; and if she will make a statement on the matter. [14515/10]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to take Questions Nos. 619 and 620 together.

Government support for the horse and greyhound racing industries is provided under the Horse and Greyhound Racing Fund, which was established under Section 12 of the Horse and Greyhound Racing Act, 2001.

Funding of both Horse Racing Ireland and Bord na gCon supports two very important productive industries and helps to sustain the important role of horse and greyhound breeding and training enterprises in the development of the rural economy. These industries, together, account for an estimated 27,500 direct jobs, generate very substantial economic activity and make a vital contribution to the rural economy including farm incomes.

The funding given to the greyhound racing sector helps in sustaining a tradition that has existed for hundreds of years and in underpinning the economic activity in what are, in many instances, less affluent regions of the country. The funding has also contributed significantly to the almost €90 million that has been invested in the improved facilities now available at greyhound tracks around Ireland.

The funding has allowed Horse Racing Ireland to undertake a capital investment programme that has underpinned growth in the sector. The funding has allowed Ireland to develop into a world centre of excellence for horse racing. €59.3m has been allocated to the Fund for 2010. In order to give effect to this Estimates allocation it was necessary, under the relevant provisions of the Horse and Greyhound Act, 2001, to have the increase in the Horse and Greyhound Fund specified in a regulation. The Horse & Greyhound Fund Regulation 2010 was approved in the Dail and Seanad on 4 February 2010.

A review of the Horse and Greyhound Racing Fund has been completed. The report states that, while not all aspects of the total contribution of the sector can be definitively quantified, there is adequate direct and indirect evidence to support a strong argument that the horse and greyhound racing industries constitute a major source of direct and indirect employment, give rise to considerable domestic and export earnings and are a key driver of substantial economic activity, especially in rural areas.

The report maintains that any sharp withdrawal or curtailment of funding in the short-term would likely have major detrimental impacts on the industries involved with the consequent risk of undoing much of what has been achieved since the Fund came into existence in 2001. At least in the medium term these industries need secure State support. If this was not available, employment would fall, infrastructural development would not take place, the product would deteriorate, integrity would become compromised and the industries would be seriously undermined.

When the Fund was established it was estimated that it would be fully financed from the Excise duty on off-course betting. When the Fund commenced the rate of duty was 5%, but the rate was subsequently reduced to 1%. Any shortfall in the amount generated by the Excise duty is made up by direct Exchequer subvention.

Excise duty on off-course betting has been 1% since 1 July 2006. The gap between what is raised through the off-course betting duty and the amount to be provided for the Fund under the provisions of the Horse and Greyhound racing Act, 2001 continues to be met directly from the Exchequer. My colleague, the Minister for Finance has stated that it is his intention to widen, if possible, the tax base on which betting duty would be applied. Bets placed either online or over the phone are generally with out-of-State companies so applying betting duty is therefore problematic. However, officials from the Department of Finance, in conjunction with the Office of the Attorney General, the Office of the Revenue Commissioners and the Department of Justice, Equality and Law Reform, are looking at the scope to overcome legal and operational difficulties in this area.

In addition, the Department of Finance is working closely with the Department of Justice, Equality and Law Reform which has initiated a review in order to provide the Government with options for a new and comprehensive legal and organisational framework governing gambling architecture in the State.

The Deputy will be aware that on March 23rd the Taoiseach announced that responsibility for these industries is to be transferred over to my colleague the Minister for Agriculture, Fisheries and Food. In that regard a regulation has been drafted with the view to the transfer taking place with effect from early May.