I move: "That the Bill be now read a Second Time."
During the past few years very strong representations were made to me on behalf of the racegoer by such esteemed Members as Deputy McGahon and the Ministers for Finance and Tourism, Sport and Recreation, Deputies McCreevy and McDaid. The bookmakers made representations to me that their business was under serious threat and that it would be desirable to improve the position of the Irish racegoer because the Irish horse racing industry and the Irish horse breeding industry is a very important part of our economy. The bookmakers made the point that competitiveness of their business was being seriously threatened by the growth and promotion in the Irish media of offshore tax-free telephone betting services. In order to counteract the effect of these developments on our heretofore buoyant betting market and to best protect the Exchequer revenue from this source into the long-term future the Minister for Finance proposed in last December's Budget Statement that the rate of excise tax to be applied to off-course betting should be reduced from 10 to 5 per cent with effect from 1 July 1999. This change is provided for in the Finance Act, 1999.
In the Budget Statement the Minister recognised that the reduction in off-course betting tax would have implications for the on-course betting levy of 5 per cent which the Irish Horseracing Authority, IHA, and Bord na gCon collect on bookmaker betting at racecourses. Both bodies have in recent years, with the help of substantial Exchequer funding, invested in improved facilities to attract new patrons. One way of encouraging punters to attend race meetings to place their bets is the lower rate of tax-levy applied on racecourses. In order to retain the differential and ensure that the increased attendances of recent years are maintained and improved upon, it would be necessary to reduce or preferably eliminate the 5 per cent on-course betting levy. The elimination of the levy would involve the loss of revenue at 1988 levels of more than £4.4 million and £31.1 million annually to the IHA and Bord na gCon respectively.
Arising from the development work and strategic planning being carried out by these bodies the revenue from this source is increasing year by year and both organisations are confidently predicting continued increases in future years. The proposal to eliminate the 5 per cent on-course betting levy could only be proceeded with if satisfactory alternative arrangements are made to replace the loss in revenue. It is estimated that those arrangements would need to provide for rates of charges which would yield revenue in the order of £6 million at projected 1999 levels of activity. This income would be divided between the IHA and Bord na gCon on a 4:1 basis.
On the basis of the consultations which took place with industry interests and conclusions reached within the Departments, my colleague, the Minister for Finance, Deputy McCreevy, and I jointly agreed and announced the following new measures. There will be a betting turnover charge of 0.3 per cent to be paid by all bookmakers operating at horse and greyhound race meetings to yield annual revenue of the order of £0.27 million and which will be collected by the IHA and Bord na gCon respectively. Charges will be set by the IHA on bookmakers – and/or bookmakers' pitches – or betting shops at horseracing fixtures to yield of the order of £0.37 million and will be collected by the IHA or by the racecourses on behalf of the IHA.
For off-course bookmakers there will be a betting turnover charge at the rate of 0.3 per cent to be paid by all high street bookmakers which will yield annual revenue of the order of £1.7 million. There will be an additional flat-rate charge of £2,000 levied on all high street betting shops which will yield annual revenue of the order of £1.6 million.
Both of these charges will be collected on behalf of the IHA and Bord na gCon by the Revenue Commissioners and paid over regular intervals to the IHA who will then forward 20 per cent of the moneys received from these sources to Bord na gCon. The annual grants-in-aid to the IHA and Bord na gCon will be increased by a sum equivalent to 0.3 per cent of the off-course betting turnover and divided between the two bodies giving, at current levels of betting, an annual increase in the grant-in-aid to the IHA of £1.2 million and to Bord na gCon of £0.5 million. The IHA and Bord na gCon will be asked to reach an agreement with the racecourses and greyhound tracks on a contribution from them which will yield £0.5 million.
The reduction of the on-course betting levy to 0 per cent and the introduction of turnover and flat-rate charges on off-course and on-course bookmakers require legislation and the relevant provisions amending the Irish Horseracing Industry Act, 1958, are including in the Bill we are considering today.
It is proposed to give power to the IHA and Bord na gCon to alter the new on-course betting turnover charge from time to time subject to the consent of the Minister for Agriculture and Food and to set and alter the on-course flat-rate bookmaker charges at their own discretion. The new off-course betting turnover and betting shop charges may be amended by the Minister for Agriculture and Food with the consent of the Minister for Finance. There are limits to the increases that will be allowed under the Bill which are 5 per cent maximum on the turnover charges and £5,000 on the flat-rate charges, although I would not envisage any substantive changes for some time.
Some time ago the Irish Thoroughbred Breeders Association put forward proposals for the development of the thoroughbred horse breeding sector and suggested that the cost of the measures could be part financed by a statutory levy on all the foals registered in the approved stud book maintained by Weatherby's Ireland. While it was decided not to proceed with that aspect of the proposal at that time, it is considered prudent to take this opportunity to include in the Irish Horseracing Industry Act an enabling provision to empower the IHA to introduce such a levy in the future if the circumstances warrant it.
Heads of a Bill to replace completely the Greyhound Industry Act, 1958, were approved by the Government in 1996. The drafting of the Bill was delayed pending the resolution of complex legal issues which arose. As the Bill is not now expected to be published for some time, I decided to bring some of the more urgent items which could be drafted quickly and to include them in this Bill. These are to empower Bord na gCon to establish subsidiary companies and allow it or any of its subsidiaries to enter into joint ventures or take shares in or become a member of another company subject to ministerial consent; remove the ban on tote credit betting imposed under section 20 of the 1958 Act; allow for the introduction and regulation of on-course betting shops at greyhound tracks and the collection of levy, turnover and flat-rate charges on the same basis as that being provided for betting shops on horse racecourses; provide general power for Bord na gCon to introduce charges for services etc.; and increase the level of fines which may be applied in respect of offences mentioned in the 1958 Act. Similar measures were introduced for the IHA in the Irish Horseracing Industry Act, 1994.
The Bill also includes a number of minor and technical amendments to Irish Horseracing Industry Act, 1994, and the Betting Act, 1931, as well as a small liberalisation of the provisions of the Intoxicating Liquor Act, 1962, to allow bars at greyhound tracks to stay open for up to two hours after the last race instead of half an hour.
The only direct charge on the Exchequer in these proposals is the increase in the grants-in-aid to the IHA and Bord na gCon by a sum equivalent to 0.3 per cent of the off-course betting turnover which will cost £1.7 million annually. This measure will be dealt with in the Department's Vote and is not referred to in the Bill.
The horseracing industry is very important with the horse racing sector providing 25,000 jobs as well as substantial benefits for tourism, rural communities and the economy. The main and most immediately noticeable feature of the recent development of this sector is the creation of the many new and upgraded racecourse facilities. The provision of better facilities and racing for the general public continues to be one of the prime objectives for all racecourses together with improving the working conditions for people working within racing. In 1996 the Irish Horseracing Authority produced its five year strategic plan. The establishment of the capital development fund was the most important element of it. The fund, which has been increased twice since it was set up, will see the investment in racecourses of a total of £60 million over a short period. Grants in the region of £21 million for the upgrading of racecourses have already been approved involving some assistance for almost every race course in the State. Dundalk racecourse will receive assistance in the not too distant future. This substantial investment is working well for the betterment of the industry, as can be seen from its performance over the past two years.
Irish racing enjoyed another excellent year in 1998. The upward trend in betting, attendance, prize money and sponsorship of recent years continued and in virtually every area of performance the targets set in the strategic plan were surpassed: total betting was up by more than 10 per cent, attendances were up by 5 per cent to well in excess of one million with sponsorship and prize money showing significant increases of 15.3 per cent and 10.5 per cent respectively.
Obviously the industry needs to build further on the performance of recent years if it is to achieve the long-term targets set by the authority in its plan. Much more needs to be done to make the industry more successful commercially. The authority has taken a number of initiatives aimed at improving the returns which owners get from their investment in racing. Last year the prize fund exceeded £16 million, rising to £20 million. I notice some owners in this House who are involved in syndicates. At least one of those syndicates is doing reasonably well but, in general, owners lose money through this hobby.
Last year was the first year of the new sponsorship incentive scheme which contributed to a growth in sponsorship of more than 15 per cent. The authority intends to expand the scheme this year.
Deputies will be aware of the Government's commitment to the horseracing industry. This support takes many forms but perhaps the most tangible is the direct Exchequer investment which is channelled through the Irish Horseracing Authority. Over the past five years the Government has invested in excess of £42 million through this route. This year will see the investment of a further £14.85 million of Exchequer funds in the industry – a considerable sum. Capital investments aimed at upgrading and enhancing facilities at greyhound tracks have resulted in patrons enjoying a level of comfort consistent with Bord na gCon's objective of creating and sustaining a new positive image of the greyhound industry as an attractive and exciting night time entertainment business. The turnaround in the industry started with the development of a modern stadium in Shelbourne Park in 1995 and the introduction in 1996 of a colourful, professional and forward thinking approach to the marketing of greyhound racing. Over the past two years, Shelbourne Park has become well known as the place to go for a fun night out with a difference. There is only one problem for Members, it meets on a Wednesday night and we tend to have a vote here at 8.30 p.m. For anybody who is free on a Wednesday night, it is a nice place to visit and excellent food is available. Thousands of new racegoers have enjoyed the buzz and excitement of Shelbourne Park – the modern face of greyhound racing in Ireland, offering the highest standards of patron comfort and hospitality available anywhere. The success of the development and marketing campaign is apparent in the continued dramatic increase in attendances and betting figures since 1995.
Shelbourne Park is only the start of a lengthy process that is needed on the capital development and marketing side of the industry. Similar improvements were achieved at Tralee, Thurles, and Waterford in 1997-98. Work has commenced on a brand new stadium for Cork, where I officially turned the sod for the development just a few months ago. There are plans for developments at other tracks, including Harolds Cross, Dundalk, Limerick, Newbridge, Mullingar, Galway and Kilkenny with the possibility of a further development at Shelbourne Park. The combination of top class facilities, aided by effective marketing, appears to be the key to the successful promotion and development of the greyhound industry in the years ahead.
The greyhound industry began in 1998 in a position of strength with dramatic increases having been achieved in attendances, tote and bookmaker turnover. The strong results of 1997 were surpassed by an exceptional performance in 1998 with all key performance indicators showing significant increases on the previous year. Total betting turnover was up over 10 per cent with tote turnover at almost £10 million, recording a 17 per cent increase, while bookmaker betting turnover at £22 million increased by 8 per cent. Total attendances increased by nearly 10 per cent, to 750,000. These increases augur well for the long-term viability of the industry.
The Government is deeply committed to the development of the greyhound industry. This support takes many forms but perhaps the most tangible is the direct Exchequer investment which is channelled through Bord na gCon. In the last five years the Government has invested £17 million through this route. This year will see the investment of almost £5 million of Exchequer funds in the greyhound industry.
This legislation will help to underpin both the horse and greyhound racing industries into the long-term future, and on that basis I commend the Bill to the House.