Joint Committee on Agriculture, Food and the Marine debate -
Tuesday, 27 Nov 2018

Horse and Greyhound Racing Fund Regulations 2018: Motion

Chairman

I welcome the Minister for Agriculture, Food and the Marine, Deputy Creed, and his officials here today.

The purpose of this meeting is to consider the motion on the Horse and Greyhound Racing Fund Regulations 2018, which was referred to us by the Dáil and Seanad on 22 November 2018 for consideration, and imposed a deadline of 29 November by which the committee must report back.

Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House, or an official either by name, or in such a way as to make him or her identifiable.

I invite the Minister to make his opening statement.

Minister for Agriculture, Food and the Marine (Deputy Michael Creed)

I thank the Chairman. The horse and greyhound racing industries occupy a special place in the Irish psyche and a key position in the rich tapestry of Irish sport. They are valuable to our economy, central to our identity and cornerstones of our social and cultural heritage.

An important pillar of Government policy is to ensure that the horse and greyhound racing industries achieve their maximum potential and, in so doing, contribute to economic and social development across a wide geographic swathe of the country. Time and again, through the years, Governments have acknowledged the importance of these industries and supported them through legislation and policy initiatives. The support provided by public funds through investment in these industries has enabled Ireland to develop into a world centre of excellence for horse racing, greyhound racing and breeding. The Horse and Greyhound Racing Fund has been front and centre in providing this investment and has played a pivotal role in shaping the destiny of these industries.

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 €1.2 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 for under the relevant legislation, has been reached. Exchequer funding provided from the fund is crucial to the survival and continued development of the horse and greyhound racing industries. In order to give effect to the provisions of budget 2019, this cumulative upper limit must be increased by regulation.

The Estimates for my Department, passed by both Houses as part of budget 2019, include an allocation of €84 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 €67.2 million, going to Horse Racing Ireland, HRI, and 20%, or €16.8 million, going to Bord na gCon. 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 fund by €84 million to €1.28 billion to allow my Department to provide the moneys allocated in budget 2019. This is achieved by way of the regulations submitted to the committee. The aggregate limit on the fund was increased in this manner in 2004 and 2009 to 2017, inclusive.

The Deloitte report, the Economic Impact of Irish Breeding and Racing 2017, commissioned by HRI, estimated that the total direct and stimulated expenditure of the breeding and racing industry was €1.84 billion in 2016. In addition, it is estimated that there are 15,200 jobs at the core of the racing and breeding industry or in directly related industries. Horse racing generates a significant return to the rural economy in Ireland and a positive international profile for our country. Behind all the facts and figures, of course, are the thousands of men and women who, directly and indirectly, make the industry what it is today.

As proven in 2018, Irish owners, trainers, jockeys and horses set standards globally and their stellar achievements and enduring influence underscore Ireland’s international prominence. The equine breeding and racing industry is extremely competitive at a global level, despite other major racing nations having much larger populations and economies. Despite our size, we are the third biggest producers of thoroughbred foals in the world and estimates place Ireland only behind the United States as the biggest seller of bloodstock by public auction globally. The significant threat posed by Brexit, however, to the current ease of movement of horses between Britain and France, in addition to the global nature of major breeding operations, illustrate that, while Ireland arguably has leadership position within Europe, its pre-eminence is not guaranteed. Government funding, in addition to supporting this key industry, also presents an excellent opportunity to yield a high return for its investment leading to a flow of income throughout the economy. Support for certain strategic industries is important for future economic growth and can provide widespread benefits for our society as well as for our economy.

According to the Power report of 2017, the greyhound industry provides and supports considerable employment both directly and indirectly across the economy. It is estimated that in 2016 the industry supported 5,058 full-time and part-time jobs in the economy. In addition, there are 7,313 active greyhound owners. The total number of people deriving economic benefit from the sector is estimated at 12,371. The industry is deeply ingrained in the social and cultural networks of rural Ireland. The future of the industry is dependent on a strong governance platform and on the industry having the highest standards of integrity and welfare founded on a strong regulatory system. I am pleased that the Greyhound Racing Bill 2018 is progressing well through the Seanad under the stewardship of my colleague, the Minister of State, Deputy Doyle, and I look forward to its smooth progression through the Dáil.

In addition to its focus on the core business of greyhound racing, Bord na gCon places a strong emphasis on regulation of the industry and the welfare of greyhounds. It is evident that the successful growth and sustainability of the industry is heavily dependent on public confidence in the integrity of racing. To this end, I welcome that Bord na gCon continues to invest significant resources in regulation and greyhound welfare.

The advent of new technologies and business models has challenged the 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 of remote and online betting operators being outside the tax net. The measures introduced in the Betting (Amendment) Act 2015 had a positive effect on revenue streams with significant increases realised. Betting tax increased from a total of €31 million for 2015 to €52.2 million in 2017. I welcome the Minister of Finance's, announcement in his budget speech that betting tax will increase from 1% to 2% next year, which, it is estimated, will contribute €40 million to the Exchequer in 2019.

Given the wide geographic distribution of these two industries, they are fundamental to the achievement of a more balanced regional economic growth. Relieving the burden on our major urban centres and nurturing rural economies is a key priority for the Government. In this context, these industries should be given recognition for the considerable contribution they make to rural economic activity and employment. Brexit poses an array of substantial threats to the economy and, coupled with the fact that we are a small and open economy naturally prone to volatility, it is difficult to predict what the future holds. It is, therefore, more important than ever that we support these important industries to help maintain sustainable growth in these sectors. Both sectors also face a series of challenges in the areas of funding, infrastructure and staffing but even in the face of all these challenges, the industries are steadfast in their ambition to build on recent progress and success.

Accordingly, I ask members for their support to ensure that Horse Racing Ireland and Bord na gCon receive the funding provided for in budget 2019 and that the important role played by these industries, and the economic activity generated by them, are sustained into the future. I commend the regulation to the committee and I look forward to discussing any matters which arise.

Deputy Jackie Cahill

As the Minister said, these are two important industries for the economy as a whole and, in particular, rural Ireland.

On the attempts to get harness racing off the ground in this country, all committee members have been lobbied by the Irish Harness Racing Association, IHRA. I understand it has put forward a five-year strategic plan for the industry, in co-operation with the Department. France is putting its shoulder to the wheel in trying to get this industry going in this country, and it has committed to investing €245,000 in prize money here for 2019. To date, it has invested €550,000 in harness racing in this country. A meeting was held in Dundalk last year at which five races were run. Some €850,000 was bet on those five races on the PMU in France, which shows that the interest in racing is there, as is the potential for the industry to develop and expand.

As the Minister outlined in his presentation, the increase in the tax from 1% to 2% will yield another €40 million for the Exchequer. If it can access the funding to get up and running, the harness racing industry has the potential to self-finance once more race meetings are held. While it does not compare in size with the horse racing or greyhound racing industries, as it is estimated there are only approximately 320 or 330 trainers and owners in the business, I am sure that with more regular meetings this number would increase.

I understand the request is for a once-off €250,000 seed capital, followed by an ongoing €650,000 per annum to fund the industry and get it established. The proposal by the IHRA demands careful scrutiny, and the association has demonstrated that it is able to run the industry well. Its pilot race meetings were successful and, with the funding that it is requesting and a strategic plan in place, this request is worthy of serious consideration. The IHRA pointed out that the plan was in place for September and the proposal was outlined several weeks or months before budget day, but if it is left waiting for another 12 months, it will put a handbrake on the development of the sport. Will the Minister outline his views on immediate funding for this segment of our horse sport industry? Will the request be given favourable consideration?

In his presentation, the Minister talked about the excellence of our sport and the way Horse Racing-----

Chairman

The Sports Horse Alliance.

Deputy Jackie Cahill

I am sorry. There are so many bodies that I get mixed up. There was one point on which it took me three or four goes to get an answer out of the Sports Horse Alliance last Tuesday evening. It was about the number of Irish-bred horses jumping internationally as a percentage of the horses competing for Ireland. The figure we were given was that only 10% of the horses that are jumping competitively for Ireland are Irish-bred. That is a warning signal as regards the route this business is heading. Going back to the Aga Khan teams of the 1970s, the vast majority of those horses were Irish-bred. It is a long time since a representative of the Army Equestrian Centre jumped internationally for Ireland. The Sports Horse Alliance's presentation contained requests for funding and development for their industry. That 10% figure shows there is something wrong in our horse sport industry. It does not have the ability to create finance. Betting is not widespread in their industry. Eventing and showjumping do not attract betting to the same degree as other horse sports. I do not say everything they said here was correct but we have to give serious consideration to where this industry is going with such a low number of Irish-bred horses jumping competitively for the country. They made requests for funding and most of them were looking for better infrastructure and better prize money for shows. I suggest to the Minister that we need to sit down and analyse this. Before it is too late, we need again to start breeding horses here that can jump internationally. We were renowned for the horses we produced in the past but we have slipped down the scale as regards producing eventers and showjumpers.

The Minister mentioned that the greyhound Bill is progressing, which is welcome. I have a suggestion, which I have raised here on a number of occasions, that there should be one laboratory for Horse Racing Ireland and the greyhound industry. I would like that to be progressed. The integrity of the greyhound industry has had many sticks and stones thrown at it. Whether they are all merited is a different issue. It is common sense to have one laboratory. I am told there are different requirements as regards testing dogs and horses but surely having the laboratory under one roof would be the most economical way to go. We need a laboratory that can look after samples so that they can stand up to any scrutiny in any court. That is not watertight at the moment. If someone is found guilty in respect of a prohibited substance, the full rigours of the new Act have to be enforceable. A properly funded laboratory covering the two industries would be a welcome step forward.

The increase in the betting tax is provided for in the Finance Bill. I have serious worries about on-track bookmakers. I fear they are going to disappear from the industry. They are an integral part of the social scene at horse and greyhound race meetings. They bring a unique atmosphere to the events. Their numbers have dropped significantly in the past couple of years. The turnover at mid-week race meetings is low. If on-course bookmakers were given an exemption from this increase in tax, it would be an incentive for some of those sole traders to stay in business. They are competing with the online business and a significant volume of betting is done online. I am not talking about making that exempt. The increase in tax is the way to go there and is the way to fund the industry going forward. However, there needs to be some recognition of on-track bookmakers and we should try to keep them in business. There is only 30% to 35% of the number ten years ago in the industry now. If we do not do something to arrest that decline, we will lose an integral part of what makes a day at the races or a night at the dogs enjoyable.

Fianna Fáil supports the allocation of Exchequer funding to these industries and will support the Bill in the Chamber. I would be grateful if the Minister could respond to those questions and observations.

Deputy Willie Penrose

The Labour Party has always recognised the important role that the horse and greyhound industries have played, especially in the rural economy where they are a backbone of employment. They are also important for the preservation of our cultural development and so on. We should maintain our important role in the equestrian and greyhound industries at home and abroad. The Minister has a copy of the submission from the IHRA. He wanted a copy of the five-year plan and I understand it was submitted to him in mid-October. He has an opportunity to review that. When we raised the matter last year at this committee, we understood that he would give it serious consideration and, therefore, I anticipate that he will do so. Only €750,000 is required. It is not just seed funding; the industry needs some capital funding as well. Seed funding is all right but capital funding is critical. It will make a contribution in the future and it has set a basis. The Minister was correct to insist on the IHRA satisfying certain criteria. It has done so in respect of the protection and integrity of the sport and its structures, as well as in respect of welfare and so on. It is important for the Minister to recognise this and give the sport an opportunity from 2019.

Last week, the Sports Horse Alliance made a forceful contribution to our committee on various issues and we cannot easily dismiss them. We should pay attention to the points Mr. Broderick and others made to the committee. I am long enough here and I think the Minister was here himself in 2001, when the then Minister, Joe Walsh, brought forward the Act in this area, which I supported. As far as I can remember, the ceiling for the fund at that time was €200 million. It has increased to €1.3 billion over a 17-year period. There has been 650% growth in that fund despite a recession in the interim. We had a couple of recessions, in fact, one of which was not just a recession but a blowout. That is fairly serious. It is significant funding that is going directly from the taxpayers to those two industries, and that has to be recognised. The important issue is to ensure value for money and the Minister is cognisant of that. The central question is whether the public is getting value for money from this increasing subsidy to both industries. Doubtless there is importance to preserving and protecting jobs in traditional industries, keeping traditions vibrant and protecting them going forward. However, the subsidy is increasing far in excess of inflation. Horse Racing Ireland appears before the committee, and we have certainly put new governance structures and so on in place.

It has indicated that its objective is to get to the point at which it does not have to rely on the Department or the Exchequer for any funding, and to enable tax revenues to be raised by remote and online betting. I would like to see that day. At the end of the day I am hopeful that this will happen. It is extremely important to people out there. In 2016, about €37 million went on prize funds. I am quite happy for prize funds to go to the ordinary small horse trainers and horse owners, and small racecourses like Kilbeggan, Ballinrobe, Roscommon, Thurles, Clonmel and Naas. Gowran is not too bad. Connolly's Red Mills is a good sponsor.

It is hard for those small concerns to survive. They are looking for sponsorship. As far as I can see a lot of prize money goes to two or three places. The big boys are cleaning up. Their stallions are tax-free. They are bringing home the bacon every weekend. That is grand up to a point, but soon the little people will be washed away. I do not mind taxpayers' money going towards minding the little people. I do not mind where it goes as long as it is protecting them. There are lots of great people down there, the Peter Downes of this world in concerns like Russelltown Stud. They have been great breeders over the years. They have given us great horses that have won major races. It is a tough job for those people to survive with three or four mares. It is a very easy job for those who can command €75,000 or €175,000 in stallion fees. It is not too hard surviving in that game. Those people can then go out on Saturdays and Sundays and clean up. A lot of this money is going into the prize funds.

I am in this game, so I have an idea about it. I am in it to represent the little people. The people who have accountants and everything else are well able to look after themselves. I have no sympathy for them at all. I am looking forward to Mr. Kavanagh's appearance here. This is not the job of the Minister, Deputy Creed, but I would still like to send a signal to him. I am looking forward to the appearance of the chairperson or chief executive of Horse Racing Ireland, HRI, before the committee. I have a few points to follow up on. For example, I refer to Kilbeggan Racecourse. Senator Daly is its chairperson. He is not here today as he is at another committee meeting. That racecourse was looking for a few bob for a long time. Conditions were attached that are not attached to other loans or grants. I want to drill down into this. I am quite happy for money to be provided. However, prize money must be increased for the sake of the small racehorse trainers, the ordinary owner and the little syndicates that keep the sector going through thick and thin.

In 2016, HRI saw a group surplus €4.8 million. That can obviously be achieved when owners are charged for renewing colours. If an owner has a set of colours in 2017 and wants to have the same set of colours in 2018, he or she has to pay to renew them. That is a nonsense. If a GAA club does not change its jersey it does not have to go the county board and pay for a renewal from January. As the former chairperson of a county board, the committee Chairman knows that.

There are too many little obstacles affecting the small players. As a man said to me years ago, if someone owes a bank manager £1,000 and they do not pay it they will be arrested. If someone owes £100,000, someone would be scrubbing the floors of the bank in case they fell on their way in. That was the way it was, and it is the very same with this. There is an old saying where I am from. I cannot use it because there is a little profanity in it. There is too much grease oiling the wheels. The very well-to-do are getting richer out of this game. The little people are struggling. With that reservation I support what the Minister is doing, but I wish to signal that my support is no longer free and easy. It is qualified support on the basis of ensuring that small tracks get a good share of the money and the small trainers and syndicates have an opportunity to secure decent funding through prize money when they enter horses in races.

Chairman

For the information of members, HRI's chairman will be before the committee for either the last meeting before Christmas or the first meeting after it.

Deputy Willie Penrose

Let us leave it until the first meeting after Christmas.

Chairman

Deputy Penrose will be ready for him.

Deputy Willie Penrose

I will have done a lot of thinking by then.

Deputy Martin Kenny

I thank the Minister for his opening statement. I note the final sentence of the third paragraph of his submission: "The Horse and Greyhound Racing Fund has been front and centre in providing this investment and has played a pivotal role in shaping the destiny of these industries." Over a period of time some €1.2 billion has been spent on these two industries. It must be acknowledged that the Irish horse is renowned all over the word. We have a culture and identity associated with it.

As Deputy Penrose mentioned, the Irish sugar beet industry is trying to get off the ground at the moment. That industry may look for help and investment from the State. If in ten years we heard a statement saying it had received €1 billion we would ask what in the name of God is wrong with these people who cannot get a self-sufficient industry going. There is an element of that here. There are two different sets of standards. We have all had representations from people representing harness racing. That sport is trying to get of the ground and its advocates are looking for relatively small amounts of money to get a fledgling industry going in a particular sector. They are finding it very difficult. They have submitted reports and they have been referred here, there and everywhere. At the end of the day, nobody sits down and works out a solution with them. They have drawn up a plan which shows serious sustainability and where the industry can go, and yet they are not getting fair winds. That is certainly my experience, and I think it would be the experience of most members. That is what we are hearing from that group.

However, the multi-million euro horse racing industry continues to get a lot of support from the State. I do not make a judgment on the rights or wrongs of that, but I do judge the sense that this will be continued indefinitely. Representatives of the Department were before the committee earlier to talk about the areas of natural constraints. These are not areas of natural constraints. Farmers in County Tipperary say they cannot buy land. They cannot compete with the big stud farms that come in and buy land from everyone. I am not saying the market is wrong. The market does what it does. However, at some point or other the State must ask if there is a plan for this industry to become self-sustaining. If it cannot become self-sustaining, what areas of the industry require investment to become self-sustaining? If there are areas of it that will need ongoing investment, where are they specifically?

I have a problem with writing out a big check, handing it to Horse Racing Ireland and telling that body to spend it how it likes. That is the problem that we all have. There needs to be a wake-up call. I know I have spoken about this before and I have complained about it. I do not say it to beat anyone up. I recognise that this industry employs a lot of people. However, I do have a problem, as I think most honest taxpayers do, with seeing very well-fed sectors getting more and others getting less. We need to bring a sense of balance back into it.

I know the Greyhound Racing Bill 2018 is progressing.

The greyhound industry has many critics and a lot of problems and we hope this new legislation will deal with some of them. I do not think it matters what legislation we put in place. If people are out to do the wrong thing they will do the wrong thing. A culture of that nature has developed and I do not know how it can be changed. A very firm hand and a long rod will be needed to get it back into shape. I ask the Minister to reflect on that and to consider where this is going in the long term. In ten years time, €2.5 billion or €3 billion may have been spent on these industries and it is not sustainable to continue in this manner. Some effort has to be made to take a grip of it. Some elements of the industry need support and we should support them but we should not be handing out a cheque to an organisation only for it to come back and tell us how it spent the money.

Senator Michelle Mulherin

It is clear that there is a serious commitment to the sector through the €84 million in the most recent budget for the annual Horse and Greyhound Racing Fund. When we put in money we support rural development and sustainability and I would like it to be rolled out to Ballinrobe and Kilbeggan because it makes a difference to those communities.

I also have concerns, which have been put to me by local independent bookmakers, over the rise in betting tax. They are concerned that they will not be able to continue, whether they are on the high street or beside the tracks. There is a threat of less sponsorship from the big bookmakers because of the betting tax, which would affect smaller racecourses whose sustainability would be threatened as a result. We need to be careful about how we proceed and I welcome the fact that the Minister, Deputy Donohoe, has said he is going to review an aspect of it. The last thing we want to do is drive more business from the high street and from the independent bookmaker towards online firms which are well able to look after themselves, as are the big bookmakers.

The Sports Horse Alliance was before us and it has brought forward a report, with an economic analysis carried out by Jim Power. Given what has been done in the horse racing and greyhound industry, there must be great potential in the sport horse sector and this can also benefit rural Ireland. It needs support and a framework to proceed and become more professional, with competitions that are more international so that our Olympic athletes and medal winners do not have to go abroad to compete. Much of the work done with sport horses seems to be a labour of love but there is also a benefit to the local economy. Some of this has been measured in the report and it is open for discussion. The Minister increased the budget by €600,000, bringing it to €3 million, but it is nothing like what we are giving to horse racing and greyhound racing. How will we enable the people who are involved in the sport horse sector, who are now under an alliance, to realise their ambitions? How can they proceed to present plans to the Minister which he is willing to fund with investment in venues and other things? Knowledge within the sector seems to be gained in a very ad hoc way. How can the sector have more educational interventions and become more professional so that we reap the benefits in the rural areas which many of us represent? How can we advance the cause of the people watching this meeting today?

Senator Anthony Lawlor

I have a question on harness racing. One of the key parts of the greyhound and horse racing sector is the integrity with which regulations are applied. The greyhound sector is looking at setting up an independent body in legislation at the moment and we have to ensure that it is in place before any State funding is given to the harness racing sector. I welcome the increase in funding because, during the recession, we found it difficult to maintain funding for the horse racing sector. The sector was going through a hard period and, as Deputy Penrose said, there is huge pressure on the horse racing industry at the moment. Those at the top are enjoying the benefits, something we saw quite clearly with the foal sales in Goffs last week. The quality horses at the very top end of the market, where a good mare is crossed with a good stallion, are making money but the small breeders with foals are struggling to overcome the cost of stallion fees, which has caused huge worry in the sector. There are 15,200 people working in the industry but many of them have just one or two mares and are struggling. If there is anything we can do for them we should do it. The top end of the market seems to be able to hold its own, no matter what.

There is also a worry about the competitiveness of Irish racing. As Deputy Penrose said, in the Troytown Chase in Navan last Sunday 11 horses were trained by the same trainer.

Deputy Jackie Cahill

None of them finished in the first four, though.

Senator Anthony Lawlor

Is that any good for the industry? The industry has to look at itself. We are putting a lot of State money in and HRI has to start looking at what it can do to assist the 15,200 people to whom I referred. A simple suggestion is races specifically for owners of one or two horses, or a syndicate race. We should start thinking outside the box so that we can help the smaller people instead of looking after the big guys all the time.

I hope the Minister continues to support the capital spend on racetracks. As Deputy Penrose said, racetracks receive 40% in State funding but some tracks cannot provide the 60% balance they need to come up with and they have not been able to upgrade their facilities as a result. The Minister might look at giving up to 70% to smaller racetracks with smaller turnovers which provide for the local economy and less to Leopardstown, the Curragh and others so that there is a bit more fairness in the industry. The capital spend has been great for racetracks, something I see at my own track of Naas, which is a small racetrack. A lot of money has been spent on the Curragh, however, and there is an overrun in that project. The parade ring appears to have been built by engineers, rather than horsey people, as it can only hold 21 horses and is too small for a track that can hold 30 horses. I hope the extra funding required to adjust it does not come from the State but from the investors who were supposed to be supervising the facility.

The equine centre in Naas is very dear to me as it is an integral part of racing and the horse industry. It is a world leader in what it does and, while I know it is a private body, whatever support the Minister can give it would be very much appreciated. The work that is being done there helps to boost the industry and improves its integrity.

It is being used by the State to assist in disease control. I ask the Minister to do whatever he can on that issue. I have scratched my head on the betting tax. I agree we need to take more tax. I wonder are we getting the current 1% across the board in all sectors? Are we getting it through the exchanges, online betting, the bookmakers and the tote? The tote has an online presence as well and we are not getting the 1% through that. I have looked at that issue but it has been decided to bring in the 2% rate.

That is going to impact on small bookmaking firms on the high street in many of our villages and towns. I would like to see some of the money being collected put into some kind of fund to help people with a gambling addiction. I would also like not all of the extra money being collected going to the horseracing industry. Only 30% to 35% of betting now is associated with horseracing. I do not know if anyone saw this, but last Friday there was a ridiculous golf event in which Tiger Woods played Phil Mickelson. It was disgraceful that these two fellows had a $200,000 bet on whether one of them would have a birdie on the first hole. It was disgraceful to see something like being undertaken by two icons of the golfing industry to encourage people to gamble. I thought it was wrong.

There is an awful lot of the sector-----

Deputy Michael Creed

The overall total prize money for the winner of that round of golf was immoral.

Deputy Willie Penrose

It was $9 million.

Senator Anthony Lawlor

It was a disgrace and highlighted the betting industry at its worst. As I said, of all betting, only 30% to 35% is on horseracing. The rest is on other sports. Let us look at where we can add funding to other sports which are more inclusive than some of the horseracing sector.

Deputy Willie Penrose

Hear, hear.

Senator Anthony Lawlor

One other bugbear of mine is Dundalk race track. It is a fantastic facility but it is not used enough. It shuts down for most of the summer. All weather racing goes on in the UK all the time while we have this fantastic facility that is used perhaps twice a week coming up to Christmas, hardly used at all afterwards and then used once a week after that. There is an opportunity to run race meetings for small trainers, syndicates, etc. Let us examine that and start to use our imagination. I have mentioned the prize funds and how we can use them for imaginative races to encourage the small people involved in the industry.

Anyone who knows racing knows, as Deputy Penrose alluded to, the prizes are all going into the same coffers. Looking at the main races, we can count on one hand the number of owners associated with it. It is sad to see. I am delighted the Minister has come in. I have a passion for this sport. I was first brought to the races across the fields at Punchestown when I was about four years old. I was probably betting. That cannot be done now but in those days, for under 18s, there could be a tote bet of two shillings or whatever a person might have.

Chairman

I did not realise the Senator was that old.

Senator Anthony Lawlor

Kids cannot do that now and cannot get that enjoyment. It is not to encourage people to gamble but it is part and parcel of going to a day's racing. I have to do the bets for the young fellows I bring with me now because they cannot go up and enjoy the pleasure that was there once. It does not lead to everyone who makes a bet being gambler. I know there are problems with that. It is, however, part and parcel of the enjoyment of the whole thing. It is a great industry. I have been to race meetings all over the world and it is a great pleasure to go to the small tracks. I remember Ballinrobe and Naas. Families were catered for years ago in those places. I saw that industry from all sides. It is a great industry but we need to be able to encourage the small person. I refer to the fellow who has the few quid in his pocket and who wants to get involved in a little syndicate. He has to have a chance.

Chairman

I thank the Senator. There were many questions and some will be directed to Horse Racing Ireland when the organisation comes in later in the year. I call the Minister, Deputy Creed.

Deputy Michael Creed

I thank the Chair and the members for their questions. It is obvious that members are deeply interested in the equine industry, as well as the greyhound industry. Sitting on this side of the debate, the unfortunate position is that there is never enough money to meet all the requests. In the context of what we are doing today, we are very much restricted by the legislation. It provides for the allocation of funds, under the Horse and Greyhound Racing Act 2001, via a statutory instrument that provides for an 80:20 split - 80% goes to Horse Racing Ireland and 20% to Bord na gCon. On related issues raised about the Sport Horse Alliance, Horse Sport Ireland or harness racing, it is not within my gift, given the constraints of the regulations at the moment, to allocate from the Horse and Greyhound Fund to any of those.

The funding they get comes from the generality of the allocation to the Department. It is not open under the construct of the legislation to allocate under the Horse and Greyhound Fund. As I said, there is never enough money. Another point I will make, that is reflective of a theme of the contributions, is that the top end of the market would survive if Horse Racing Ireland was never there. Listowel, Mallow, Tramore, Kilbeggan, Gowran, Naas, Tipperary, Cashel or Thurles is where I think there is a need for attention by Horse Racing Ireland. Later this week, I will be meeting the organisation - as will the committee in due course - and that is a message that needs to be heard loud and clear.

I make no apology for saying this. In my first budget engagement with Horse Racing Ireland, I made the point to it clearly that I wanted a particular focus on the point to point sector. I think, in fairness, that it has responded over the last number of years. That is not to say that there is not more to be done. It is also the case in respect of the smaller people, if I might use that term, in the industry. The top end of the market would survive. We must bear in mind, however, that it is a very mobile industry. It might survive, but it might not be in Ireland and that is something we need to be very careful about as well. It is proper that we, holistically, get all the responses.

Deputy Martin Kenny made reference to one part of the country and land prices. If we look at a map of breeding establishments, they are in every one of the counties in the country. They may be more dominant in one more than another but they are in every county. It is about small breeders with three or four mares. They are the backbone of the point to point system and of the smaller tracks as well. I have been privileged to be in Listowel, Killarney and Mallow to acknowledge the capital investment Horse Racing Ireland has been involved in putting into smaller tracks. I know that is replicated, even though it is, perhaps, more challenging to come up with the matching funds.

If we turn then to the showpiece investment, the state of the art investment in the Curragh, that is not composed of matching funds. It is made up of one third, one third and one third. There is not a one-size-fits all approach. These are points the industry needs to hear and I will certainly carry the views expressed by the committee to my own engagement with the industry and I am sure the committee will express them directly to Horse Racing Ireland as well in due course.

On harness racing, in the context of the constraints under the Horse and Greyhound Racing Act 2001 and the fact it cannot be funded under the statutory instrument that we are talking about today, I do not know if I misinterpreted Deputy Penrose's point but €1.28 billion is the cumulative amount up to this point. It is added to every year. It is a lot of money.

Deputy Willie Penrose

It is a 650% increase from 2001.

Deputy Michael Creed

No, it is 2001, 2002, 2003, etc. It is every year. It is €1.28 billion.

Deputy Willie Penrose

It has gone from €200 million to €1.3 billion and that is 650% of an increase over 17 years.

It is fantastic. It is way beyond inflation anyway.

Deputy Michael Creed

Yes. That is a fact. It has gone from that-----

Deputy Willie Penrose

It has.

Deputy Michael Creed

It is a phenomenal level of support.

Deputy Willie Penrose

It is a phenomenal increase, so we must get value for money when it is compared with other issues.

Deputy Michael Creed

It is important to consider the issue of harness racing in the context of the Sport Horse Alliance and Horse Sport Ireland. The harness racing people, with whom I have had engagement, as I know Deputy Penrose has, are very effective communicators and lobbyists for their sector, as the equine industry generally is. I salute that. They are a constituent member of Horse Sport Ireland. The Sport Horse Alliance is a lobby group for the sport horse sector, that is, more or less the showjumping sector, although I do not want to be prescriptive about that. The opening point I made is that there is never enough money. We have increased - nearly doubled, in fact - from 2014 the funding we give. In 2014 we gave €1.8 million to Horse Sport Ireland, and for 2019 the figure will be in the region of €3.5 million. This is a significant increase. We could spend multiples of it, but there is an important question here. Is it the core function of this Department to fund the high-performance end of the sports market? Horse Sport Ireland receives funding from the Department of Transport, Tourism and Sport, and there is a question of the appropriate balance in this regard. I appreciate that this is a rural enterprise, that horses are reared on farms, etc., but there is the question of whether it is a core function of this Department to be involved in such a level of funding at that high-performance end or whether that is a function of the Department of Transport, Tourism and Sport, from which Horse Sport Ireland also gets funding. We will engage with Horse Sport Ireland. We recently had the Indecon report on it. We said that once the governance structures were right, we would respond in terms of the allocation to it. I think we have in the context of the trajectory of its funding. However, it has a lot of ambition and many constituent members, some of whom work through Horse Sport Ireland, with others working outside it.

The harness racing industry is seeking very substantial capital investment. We received its draft five year plan for the industry on 12 October, which was after the budget for 2019 had concluded. This makes it difficult to make any substantial progress on the range of issues raised, which range from the track in Portmarnock to an alternative, which Fingal County Council may make available. The issues raised concern funding for staffing complement. Staff are not taken on for only one year; there is a recurring commitment. We need evidence of matching funds and governance structures. To be fair, this is an organisation that is trying to get off the ground. The funding we are allocating today is to HRI and Bord na gCon. They are subject to the Comptroller and Auditor General's scrutiny, etc., accounts and a board. This organisation has yet to get to that level of professional presentation. We are working with it. We funded the original Indecon report and the development of its strategy. We have funded the company by way of investment in various programmes and we continue to do so. We would like to see what else we could do, perhaps even looking at the stud book, which is an area where we might be able to operate. Is a racetrack development, for example, something that could be usefully explored under the sports capital programme rather than under the Department of Agriculture, Food and the Marine's core funding? It is a sports facility. These are issues we need to explore. As I said, we got a draft on 12 October, consideration of which is ongoing. I do not want to throw cold water over this, but it is not possible under the legislation to take it from the Horse and Greyhound Racing Fund. We are trying to do this within the existing allocations as much as we possibly can, bearing in mind that the Sport Horse Alliance is one of a number of constituent members of Horse Sport Ireland, whose total allocation from this Department is €3.5 million. Harness racing's ask is a very substantial part of this total allocation in terms of what the cost might be of developing that facility, staffing complement, etc. We need to explore these matters in further detail and ensure that every step we take we are protecting the public interest and the public purse. That is important.

Deputy Cahill raised the issue of the single laboratory service, and Senator Lawlor raised the issue of the equine centre. There is probably the genesis of something there in terms of collaboration, and this could extend to the greyhound sector as well. Is investment made in things that are transferable? I hope to visit very shortly the equine centre. Therein is a requirement for very substantial capital investment. Can we explore a model whereby something akin to what happened with the Curragh might be partially funded by others as well as the State? That is important. Equally important, however, is the following question. If we put in that level of investment, can we get a return for everyone from what the equine centre does in terms of diagnosis, management, prevention and research and giving the industry here the international reputational standing it has because of a facility like the equine centre? Can we then use the expertise therein to assist, for example, the greyhound industry with its laboratory requirements, integrity and so on? We could see a useful collaborative approach to this. In education and training terms, are there things the broader equine sector needs to do that racing and the equine industry under HRI have done, such that we can leverage some benefit to other aspects? I have made this point on occasion to key stakeholders, that this should be explored in greater detail. I certainly see the equine centre as one area where this can deliver.

On-track bookmakers and the betting tax generally are not issues for this Department. On-track bookmakers certainly add colour to a race meeting. Mind you, these are the things most people bet on now. That is the reality, whether we like it or not. I certainly would like to see that tradition of on-course betting continue and racecourses and HRI, where possible, being able to assist with all the necessary supports, including soft supports outside of the tax system in terms of location, etc.

I think I have covered-----

Chairman

Deputy Martin Kenny asked a question about a long-term plan for the two industries. The point he was making, I think, was to make them self-sustainable in the long term.

Deputy Michael Creed

The greyhound industry has a strategic plan, HRI has a plan and we now have the Indecon report, which is the backdrop to the horse sport sector, so we have no shortage of strategic planning. As I said earlier, without this level of funding, the top end of the market will continue to survive. This funding is critical to the lower end of the market in particular. As I said, there are strategic plans. If the question is founded on an assumption that we could get to a position where this industry will stand without State support, I do not see that happening.

The top end of it might but the entire edifice of the Irish equine industry is built on a foundation of small owners, breeders and operators and if we lose sight of that we could very quickly have a situation where the base dies out and the mobility of the industry becomes apparent in terms of relocation elsewhere. That is something we need to guard against.

Deputy Jackie Cahill

I want to go back to harness racing and trying to get it off the ground. I wish to follow up on the point Senator Lawlor made about Dundalk racecourse. Harness racing could and should use that facility rather than try to establish a new track. The racecourse facility in Dundalk is ideal for harness racing.

In the five races that were held, there was total betting of €850,000 and with the 2% betting tax that is €17,000 in revenue. This industry might not be able to self-finance but it has the potential to contribute to its upkeep if it could get off the ground. I am in the Oireachtas three years and those interested in harness racing have been knocking on my door for those three years. I do not know whether they were making representations before that.

The French have put their money where their mouth is for this industry. They have put money on the table. One can only keep an industry like that for so long in the embryo stage. If we do not take a concrete step it will not develop. One race meeting a year is not enough for people to keep horses or for the industry to develop. If we do not expand on harness racing activity in 2019 the project will go backwards rather than forwards. A number of individuals have put significant effort into it. They have produced a strategic plan. I do not doubt the Minister who said it was not ready for budget time, but they said that was not the case. Lobby groups can always stretch the truth a bit. We will not get into an argument about when the plan was put on the table.

Unless we make a meaningful contribution to this industry it will go backwards. The representatives have put an awful lot of work into it. They have shown that the industry can attract betting from outside the country and we need to make a commitment to it. The figure of €850,000 on five races in Dundalk was a substantial amount of betting. It is significant that it could be achieved on a once-off occasion. We talked about provincial race tracks on several occasions today and they would not generate such betting on the tote in five or six meetings let alone five races. Unless we take a step forward I am afraid this aspect of horse racing will take many steps backwards.

Deputy Michael Creed

We have put our money where our mouth is. We have invested. We need to be careful with public funds that we move in a way that is appropriate. The Indecon report in 2017 cost €57,000. The five-year plan for the organisation, which we are paying for, cost in excess of €60,000. We are paying for its five-year plan. In excess of €60,000 was spent in 2017. We gave more than €40,000 for equine technical support in 2018. Additional funding under the same heading was provided in 2017. A total of €27,000 was spent on welfare support. Deputy Cahill is aware some of that was spent in Tipperary to develop harness racing on public roads and to try to increase awareness and improve welfare. We have put public funds into the sector. Harness racing is one of many affiliates of Horse Sport Ireland. If people feel they can go outside the umbrella body then the other affiliates might wonder what the point is in being part of a parent organisation if they can campaign independently. We must be careful in how we proceed and ensure that it is appropriate.

Deputy Cahill's observations on Dundalk track are interesting. There was a harness racing meeting there. We must consider whether that is something that could be repeated rather than the approach being pursued in terms of capital investment. Originally, several hundred thousand was required in the context of Portmarnock. It then became multiples of that in terms of a new venue in north County Dublin on the border with County Meath. We must make sure that what we are doing is sustainable. Anybody can buy a track and develop a track but the question is whether it is sustainable in the long term, if it is the right thing to do, or whether there are opportunities to have further meetings in Dundalk, for example. Deputy Cahill said that would be the right thing, rather than having a big capital investment. We must explore whether matching funding will be provided if we put in funding in terms of staffing supports and accommodation, including offices, none of which is there now. We are working with these people. We have a draft plan since 12 October, but harness racing is one of many constituent members of Horse Sport Ireland and we need to make sure that we are fair to everybody.

Chairman

If there are no further questions we will conclude the debate on the motion. I thank the Minister and his officials for appearing before the committee today to discuss this important matter.