I move amendment No. 21:
Before subsection (3), to insert a new subsection as follows:
"(3) For the purpose of subsection (1) of this section, the moneys received in respect of the activities mentioned in (a) (iv) (v) (vi) (vii) and (viii) shall not include the aggregate of the sums of money which by the terms of the transaction are returnable to the person who
(a) enters into a bet with the holder of a bookmaker's licence,
(b) stakes money by means of a totalisator,
(c) stakes money with the holder of a licence under Part III of the Gaming and Lotteries Act, 1956,
(d) wins a prize in a lottery,
(e) wins a prize in a crossword puzzle competition or other competition or contest promoted through the medium of newspapers or publications."
The purpose of this amendment is to eliminate from the turnover tax betting with a bookmaker on a race course or totalisator bets on the course. In moving it, I think it is necessary to say a few words about the importance of the bloodstock industry to the country and the part racing plays in that industry. I do so because some people may imagine that neither betting nor racing need be considered essentials in the same way as the tax affects essentials such as food, fuel and clothing. That is only a superficial consideration of the problem, and when this matter is considered in the light of all the facts, it will be recognised that the bloodstock industry is most valuable to the country and provides not only a valuable export trade but also considerable employment. When the manner in which that employment is given is considered, it will be seen that it is a most valuable kind of employment.
Deputies on all sides have frequently spoken of the encouragement given under different Governments to industrial employment and expansion. Very large sums of money have been invested in industry and the State has directly encouraged industrial development by tax remissions on exports, by grants and so on, all designed to provide not only exports but employment and so strengthen the country's industrial arm and facilitating and encouraging agriculture also. These benefits and financial arrangements have been welcomed and recognised as a direct means of furthering economic expansion but it is true that, taken in the aggregate, that type of encouragement costs the State a good deal and while benefits have resulted, it involves considerable expenditure.
In the case of the bloodstock industry, no such State expenditure is involved. In fact, while it is to a considerable extent regarded as a rich man's business, that is only part of the picture. In the main, the industry is widespread and a great many small owners and breeders depend on it for a livelihood. The fact that it has been possible to attract wealthy persons from abroad to establish or acquire studs here indicates the confidence these people have in the quality and standard of Irish bloodstock and their desire to own or operate studs here. Apart from the wealthy owners, in the main, the industry is maintained by individual breeders and owners in almost every county and certainly in the majority of counties and employment is provided at all levels throughout the country.
For that reason, the obvious benefit to the community of maintaining the industry in a prosperous and expanding position needs no emphasis. Recently the success of the measures taken to assist racing has attracted great attention at home and abroad, and since the establishment of the Racing Board and the provision of funds through powers granted to the Board to make a levy on bets with bookmakers or on the totalisator, a very considerable increase in stake money became possible. That, in turn, resulted in a recent development in Britain, one which was advocated many years ago by the late Aga Khan who recognised the advantages it had for racing here and who urged in articles and letters and in speeches to newspapers that the same thing should be done in Britain, a levy on bets.
As a result of the consideration given the matter there, a levy is now operating in Britain and the first full year's operation of the levy has, I think, just been completed. It is known that the estimated revenue from the levy in Britain will be £3 million a year. It will be administered by a statutory board and used for purposes similar to the purposes for which it is used here.
A sum of £3 million is a very considerable sum and shows the extent to which the Irish racing and bloodstock industry will have to compete with funds made available in Britain through the British Racing Board and which will in future be used to step up considerably the stakes provided there. Recently, in addition to stake money provided from the levy here, there have been notable cases of races sponsored by industrial concerns. The most notable example this year and last was the Irish Sweeps Derby at the Curragh. In addition, Messrs. Guinness, Messrs. Power and Messrs. Jameson and many other firms, apart from the brewing and distilling trade, such as the tobacco companies, have sponsored races and provided the entire stake or part of it. That has been done because executives recognised that despite the considerable increase in stakes provided by the Racing Board, something more was necessary.
Undoubtedly, some of the sponsoring firms have realised the publicity advantages attached to the sponsorship but the prime motive behind their activity was to assist racing. In many cases, without the sponsored races, meetings would have suffered considerably and the fact that a particular meeting or race is sponsored has considerably added to the attractiveness of the meeting and has had the added advantage of attracting, in a number of cases, horses from outside the country to compete here. The total money which is provided by the Racing Board for stakes amounts in round figures to £300,000. That is made up, in the main, of two figures: one of £240,000 or £250,000 in respect of moneys provided for stakes and a sum of about £50,000 for the carriage of horses to race meetings. In addition, there are some smaller sums in respect of measures taken to ensure that no doping is carried on and that horses are tested but those are the main figures, £250,000 and £50,000.
Those who are familiar with the economics of horse racing will appreciate that the cost of transport is a very considerable one and, like other costs, has risen considerably over the years. The reason I put down this amendment is that I believe it is important that we should maintain the industry at the present high level. In fact, with the very substantial levy now available in Britain, it will be very difficult to compete because for the future we shall be competing with British racing on a different basis. They will have in Britain for the future a vast sum from the racecourse levy which was not available in the past. Undoubtedly costs are much higher in Britain but there they have recognised that if the prestige of British racing was to be maintained races like the Derby would have to be increased very considerably in value, and from next year as the result of the levy, the Derby will be worth a sum considerably in excess of what it has been worth in recent years. That is not only to offset the attraction of the Irish Derby with its enhanced value as a result of being sponsored by the Hospitals Trust but also to counteract the very considerable sums that can be won in races on the Continent and particularly in France.
The purpose of this amendment, therefore, is to ensure that the sums which have been available in the past will be available in the future for the encouragement and expansion of the racing industry. It is hardly necessary to say that racing is the shop window of the bloodstock industry and it is the principal way in which the horses bred here have their merits brought to the notice of potential customers. Those that are sold for export as yearlings or young horses are raised elsewhere but in order to maintain that valuable export trade, it is essential that racing here should attract and cater for the very highest standard of breeding and bloodstock generally.
There is a very real difference between money wagered on betting and money spent on goods and affected by the turnover tax. It is important to stress to the House the actual difference. A bookmaker's turnover and the totalisator turnover differ entirely from the turnover of a grocer, a draper or any other business person and I hope by an example or two to indicate the reason for that. I hope to prove that the sum wagered on a racecourse is turned over a number of times.
Take the example of a person who at a racemeeting starts with a sum of £20. He places £5 at 4 to 1 on the winner of the first race and he wins £20. The turnover is £5. On the second race he puts on £10 at 6 to 4 and he wins £15. The turnover there is £10. In the third race, he puts £20 on the favourite and he loses. There is a loss of £20. On the fourth race, he has £10 on at 2 to 1 and he wins £20. He is getting more courage and on the fifth race, he bets £50 to win £40 on a certainty and it loses, so he loses £50. In the sixth race, he puts £5 on at 4 to 1 and he loses. The sum he wins for the total of six bets is £55. He loses £75 and the total turnover is £100. Thus to complete the example, he loses his £20 but the turnover tax would have been payable on the £100. If, on the other hand, he spent the £20 on a suit of clothing the turnover tax would be payable only on the £20.
My contention is that it is not equitable to deal with a bookmaker's turnover or the turnover of the totalisator in the same way as that of a draper, grocer or some other retail trader where the turnover is paid on one particular transaction. In order to equate the two, it is necessary that the bookmaker's turnover or the turnover in respect of the tote betting should be defined as meaning the amount spent on gaming or gambling just as the amount spent in a grocer's or a draper's shop is the amount spent on such goods.
The effect of this amendment can be shown by that example. What I want the Minister to consider, first, is that instead of the Racing Board paying the 2½ per cent on the tote turover of £2,700,000, which is approximately the sum which is wagered on the totalisator, they should pay only on a sum of £270,000 which is the sum retained by the totalisator out of the sum wagered. On the other hand, in the case of money wagered with the bookmakers, instead of a sum of, say, £60,000 or £70,000, they should pay between £6,000 and £7,000.
I also included in this amendment the question of pools because I believe a number of worthwhile charities are involved. It is not necessary to mention the well-known cases but there are a number of well-known pools run for hospitals and other charitable purposes and there again these pools would come within this provision. There is an equally strong case for granting exemptions to them. The purpose of this amendment, as I have said, is to confine the turnover tax to the profit taken by the Racing Board in respect of bets placed with the tote and to the profit on course bets placed with bookmakers. That would be a reasonable approach to it. It would provide the Minister with a fair return and at the same time, it would allow this industry, which is doing well but which is not without serious problems and which has done well up to the present, but now faces an entirely different situation, sums comparable with the very considerable sums which will be placed by the British Racing Control Board to the advantage of British racing and breeding, and which were not there up to this year, or up to a portion of last year, but which will be there in future, sums vastly in excess of anything that could be contemplated here. That involves racing and bloodstock breeding in a challenge it has not had to meet in the past. It involves it in future problems incomparably greater than anything it has met with in the past.
In the main the sum wagered has remained static. Despite increases in wages, salaries and money values, the sums wagered have remained largely static. Indeed, for a very considerable portion of last year the sum taken by the tote at race meetings was down on the previous year. Towards the end of the year, and in the early part of this year, bets made a recovery, but it is a recovery to meet rising costs and rising charges. As I say, the sum provided here in respect of stakes and in respect of the carriage of horses is substantially less than that which will be available in future in Great Britain.
I believe this is a most valuable industry. Up to the present it has cost the State nothing. We have designed measures to help industry and agriculture, with a view to attracting outsiders as well as inducing our own people to expand and develop. This particular industry has attracted outsiders without any comparable State investment. It has also attracted some few of our own people, who have put considerable sums into it, but, in the main, it is an industry which depends on the small man and on the small breeder. It has spread widely throughout the country and gives good male employment. It has spread throughout every province and into practically every county. It is for that reason I believe we should endeavour to expand it, if not improve it.
I believe the proposal enshrined in the Bill to impose a turnover tax on the industry will seriously affect the efficiency and economy of the industry. It is for these reasons then I move this amendment to confine the turnover tax to the sum actually won or retained by the Racing Board both in respect of bets placed on the totalisator and in respect of course bets placed with the bookmaker.
