I am pleased to be in the Seanad for the Irish Horseracing Industry Bill, 1994, which is important and, indeed, critical to the industry of horse breeding and racing. The time and effort put into this Bill by the Government and I and all the constituent parts of the industry is indicative of its importance. It is also indicative of the level of commitment to Irish racing and a recognition of the success and potential of the sector.
We have only to look at other sports to see that when, as a nation, we become committed to something and work together supporting it we can overcome obstacles and compete with the best on the world stage. On that note I would like to express my congratulations on the performance of the Irish team, the management and the fans.
It is the international reputation we have always had for our thoroughbred horse breeding and racing that gives me the confidence to predict a bright future for this industry. However, our international reputation, no matter how good, will quickly fade if we do not work continuously at maintaining it. That means continuing to produce a good quality racing horse and maintaining a well organised, strong racing industry.
The home industry will provide training and experience for the horses, entertainment of the highest quality for the Irish public and the tourist, betting opportunities for the punter and employment for about 25,000 people. It helps a lot in maintaining a lively interest in a sport which contributes substantially to Exchequer revenues from taxes on off-course betting and provides a shop window for our exports of Irish thoroughbreds which are valued at about £50 million annually.
We have a long and well established tradition in breeding thoroughbred horses for racing or export and they contribute substantially to the economy all over the country as there are a number of small breeders scattered throughout the country. We can also be proud of the organisation and structure of our racing industry which are already at a level of development which surpass many of our counterparts abroad.
Latest figures for output of the horse industry indicate an annual value of over £60 million. In 1993, for example, there were over 226 race fixtures held at 26 racecourses which were attended by over one million people. Total betting turnover at these fixtures exceeded £89 million yielding between £3 million and £4 million in revenue to the industry. Off-course betting turnover reached £350 million which brought in revenue to the Exchequer of £35 million. These are substantial figures but they can be substantially improved. I anticipate that under the provisions of this Bill facilities will be put in place to increase the turnover in betting on-course and off-course and improve the entertainment value of the new facilities.
In New South Wales in Australia, for example, which has a population of 6 million — which is not that much greater than that of the island of Ireland — the total betting by bookies is over £1 billion annually. One can imagine if we could scale up our betting and our facilities the amount of money that would be available for reinvestment for the development of the industry and the additional moneys for the Exchequer.
We must recognise that despite its relative strength this industry has not escaped the recession which has hit the sector worldwide in recent years. The position of the race horse owner has become particularly critical. The costs associated with keeping a horse in training have increased more rapidly than prize money. This in turn has caused problems for some trainers who are finding it increasingly difficult to retain their patrons or to find new ones.
On-course betting turnover, which generates the main source of income for the Racing Board, has been in decline in recent years. Bookmaker on-course betting turnover fell from £104 million in 1990 to just over £70 million last year with a resultant decline in levy income from £5.2 million to £3.5 million over that period. As a consequence, the level of funds available to the industry as a whole has been contracting and there have been insufficient moneys available for development of racecourse facilities. This is most unfortunate at a time when horse racing has to compete with an ever growing list of leisure activities. Despite these difficulties the industry remains important and recent international trends suggest that the time is ripe to embark on a new development stage in this industry.
Unless the facilities available at racecourses are continually improved there is a danger that the industry could get caught in a downward spiral of falling attendances, lower levels of betting and consequent reductions in income accruing to the racing industry with falling levels of prize money and little or no money available for capital development.
The situation would have been much worse but for the action taken by the Government to introduce a grant-in-aid for the Racing Board in 1989 and since then £13 million has been put into the industry by the taxpayers. Of this figure £7.5 million was used to supplement prize money at the lower levels and about £4 million to develop racecourse facilities. The balance was allocated to promotion and advertising of the sport, marketing of horses and the provision of infra-structural services. With regard to the marketing and promotion of horses I want to pay tribute to the Irish thoroughbred marketing group which has done a brilliant job in its area of activity.
These measures have brought about a significant degree of improvement. I think most people in the industry would agree that with an improved organisational structure and greater resources the horseracing industry has considerable potential for growth leading to increased income for the economy generally and, in particular, to additional employment in the sector. The racing industry is a labour intensive one and expansion is directly reflected in higher employment. A figure of 25,000 earning a livelihood from a sector of the industry in Ireland is important.
Apart from the worldwide recession which the industry has experienced in recent years, the problems of the industry in Ireland can be traced to a shortage of funds and the lack of a coherent approach to its development. Having two separate bodies was not of any help. I do not want to be critical of the governing bodies — the Turf Club and the Irish National Hunt Steeplechase Committee — which have done valuable work in administering Irish racing for over two centuries. Their guardianship of the rules of racing and of its integrity is recognised domestically and internationally as being first class.
Since its establishment in 1945 the Racing Board for its part has performed an excellent role in the financing and development of the industry within the terms of its remit. All of those who accepted appointment to the Racing Board and the members of the governing bodies served in a voluntary capacity and all are entitled to our thanks for their valuable contributions.
None of that takes from the fact that, in the present circumstances, the absence of a single body to provide the focus for direction and funding is a serious impediment to its development. That is why we are now proposing in this legislation the establishment of a new horseracing authority to provide that focus for the future. The new Bill, as well as proposing a new organisational structure, will provide a comprehensive legislative framework for the industry. We are providing in this legislation for the development of the industry well into the next century.
Our guiding principle and our only motivation in all of this is to put in place arrangements and legislation that will enable the industry to realise its full potential. I am glad to be able to point out that it was the industry itself that recognised the difficulties it was facing and it was its decision to do something about it that eventually lead to my proposals for the restructuring of the industry which I announced in October 1992; I am referring to the joint working group set up by the Racing Board and the governing bodies in 1991 under the chairmanship of Dr. Paddy Moriarty. That group examined the key areas in the industry which most needed to be addressed. A large degree of consensus was reached at that time on what needed to be done.
I subsequently established another committee with wider industry representation which was chaired by Michael Dowling, Secretary of my Department. The valuable work done by the Moriarity Committee formed a basis for the work of the Dowling Committee. This committee reached agreement on the outline of a draft Bill to establish the new structure. Some changes to that agreement became necessary in the course of the formal drafting process to conform with legal requirements and to ensure that the precise meaning of all its provisions could be clearly understood. During this process, and indeed after the Bill was published, I continued to receive further representations from various interests in the industry on various aspects. I accepted some of the points made and put forward some amendments on Committee Stage in the Dáil to accommodate those concerns, which I felt were legitimate. On Report Stage, I also accepted the broad thrust of some amendments which were put forward by Opposition Deputies on Committee Stage. The result of this is the Bill now before the House. It is now in a form which is generally acceptable to the industry and its various provisions represent a good balance for the overall industry.
I was anxious from the outset that the Authority should be a representative one covering all the main sectors in the industry. I recently announced that the Government had decided on the 16 people to be invited to act as members of the new Authority. I have asked those selected to act in an interim capacity, pending the finalisation of this legislation and the making of an order formally establishing the new Authority. I felt that this was desirable so that preliminary arrangements on structures, staffing and other matters could be put in place as soon as possible. It is essential that this job be done carefully and well and that the time and energies of the new Authority be devoted almost exclusively to it for the immediate future. I will, therefore, after the enactment of this Bill, postpone for some time the signing of the commencement order of the Authority to give it the opportunity to complete this work. In the meantime the Racing Board will continue with the necessary day-to-day business of the industry.
The question of the membership of the new Authority was repeatedly raised in the Dáil. We need the number proposed to create sufficient balance on the Authority. What is important first is the quality of the membership. We have put in place a high quality Authority well capable of giving a strong lead to the industry. The second important element is how the Authority works. It is critical that members see themselves not primarily as sectoral representatives, but as a board of directors for the industry. They must work cohesively to promote and develop the industry as a whole.
This is a major national task and I am confident the Authority we have put in place is capable of undertaking it. We intend to let it get on with the job without interference. It represents the industry and it will be its responsibility to work out and implement what is best for its overall development. We will, of course, give all the assistance necessary to ensure that it can work effectively.
The new Authority has an important role to play in ensuring the Irish horseracing industry is developed to its full potential and that it will lead to the further development of the industry, which will continue to enhance our international reputation of having a high standard and ensure our horseracing and breeding industry is in the first division of that industry worldwide. Having got broad consensus on how we should develop this legislation to secure the future of the industry and appointed a broadly representative board, it is essential that sectoral, petty and narrow interests be put aside and that the new Authority will work in a coherent way to serve the industry well and in the best interests of those working in it. I should say at this point that I was conscious in proposing the new structure of the necessity of preserving the strengths of the present regime. In particular, I was careful to provide for the independence of the governing bodies as the institution responsible for the rules of racing and the integrity services. It is also important to ensure the efficient administration provided by the registry office would continue to be available to the industry.
The governing bodies have, as the Members know, successfully administered Irish racing for over 200 years. Without their contribution racing could not have developed. The two bodies have carried out their functions professionally and have regulated racing with impartiality. They have also invested their own funds, which they earned outside their formal role in the sector, back into the industry for the benefit of all when such investment was badly needed. Irish racing certainly would not have flourished but for the major contributions of the governing bodies over the last two centuries.
It is for these reasons that I propose to give legislative backing to those functions of the bodies which all sections of the industry agree they should continue to perform. Section 39 of the Bill, for example, provides for their continued regulation of horse racing, the making and enforcement of the rules of racing and the provision of the integrity services. They have, of course, also been given formal and substantive recognition by being given the right to nominate three stewards directly onto the Authority. A fourth member will be representative of National Hunt interests and will be appointed on the nomination of the racing regulatory body. The Turf Club and National Hunt steeplechase committee will be the new racing regulatory authority.
There are other provisions in Part 3 of the Bill giving the racing regulatory body the statutory right to make charges for its services and guaranteeing to it the costs of its integrity services. I am satisfied the position of the governing bodies is given fair treatment in this Bill and is in fact being strengthened by the new legislation. They have a major role to play in the new structure. Therefore, it is correct they should get statutory recognition. I would like to make it clear that any activities of the racing regulatory body or of its constituent bodies other than those outlined in the Bill are not affected by this legislation.
A major issue for the industry is its financing. Apart from the need for a new Authority to rationalise the way in which the industry was organised, it has suffered badly in modern times from a lack of adequate financial resources. As I have already mentioned, the Government has provided over £13 million to the industry through the Racing Board over the past four years in recognition of this shortage of funds. I have repeatedly stressed the Government's long term commitment on this question.
I now want to place this matter in a broader context. When formally established, the new Authority will, of course, have to set about devising strategies for the development and promotion of the industry on a multiannual basis. This will involve virtually all the Authority's functions. It also requires a substantial degree of financial certainty. To facilitate the Authority in this regard, I can confirm that it may plan for the future on the basis that the Exchequer contribution will be maintained at current levels. I must emphasise that the contribution is considerable; this year it stands at £6.6 million. I also put £1 million into the old Racing Board and gave a substantial contribution to the Irish thoroughbred marketing organisation. With regard to horseracing in other jurisdictions, this compares favourably with the contribution made by our taxpayers, is reasonable and adequately recognises the importance and potential of the industry.
It is, of course, essential that the industry itself strengthens its financial base by increasing its revenue from other sources. There is no point in squeezing the taxpayer for additional money if the industry itself does nothing. An additional effort will have to be made to raise money for reinvestment if the industry is not producing the goods and earning adequate revenue.
The Authority's promotional role is relevant in this regard. It must look at how revenue from other sources can be tapped, especially through the development of new sources of betting revenue. An efficient tote system, for example, is required. It will generate real revenue for reinvestment in the industry. I have already given an example of one racing area in New South Wales and there are many others. Some will say these areas have much larger populations, but a greater effort will have to be made. I expect the new Authority to make a greater effort to substantially raise its own revenue. If extending tote operations to off-course locations would be of help, we are prepared to facilitate this through an appropriate adjustment of the licence.
Finally, I must emphasise that the new Authority, which is a commercial State company, is principally a promotional and development body rather than a trading one. In recognition of the fact that any surplus it makes will be reinvested to promote and develop the industry, the Government is prepared to consider conferring tax exemption status on the Authority in the new Finance Act. This gives an incentive. Rather than having some of this money raised being siphoned off by the Revenue Commissioners, it will be available for reinvestment in the industry. It is a sufficient incentive for the new Authority to proceed to rationalise its activities at an early date and seek new sources of income.
The new legislation opens up opportunities to increase the overall level of betting turnover and levy revenue which were not available under the old Racing Board regime. I hope these opportunities will be grasped by the Authority in a way that will see revenue from this source greatly increased to the benefit of the industry as a whole. In this regard I refer the House to section 54 of the Bill, which allows the Authority to apply a levy on all bets placed at a racecourse on horse races or any other events taking place elsewhere. Heretofore these were regarded as off-course bets and were liable to the 10 per cent off-course betting tax.
The Finance Act, 1994 includes provision under section 89 to remove the 10 per cent tax on such bets. In the Bill before the House the Authority is required to apply a rate of levy on those bets equivalent to the rate of tax applying to similar bets placed on the high street, which at present is 10 per cent. The result will be that the revenue from levies on all bets placed at racecourses will go to the Authority for the benefit of the horse racing industry. While the amount of betting at racecourses on off-course events is estimated to be quite small at present, under the new legislation there will be an incentive for the new Authority to develop this source of revenue and at the same time to encourage increased attendances at race meetings.
Another new source of revenue for the industry is provided for in section 12 of the Bill, which empowers the Authority to make charges in respect of the carrying out of any of its functions or the provision of any of its services. Under section 43 the Authority may require the racing regulatory body to collect fees, levies or charges on behalf of the Authority. This is a new and flexible possible source of funding. Charges could be set, amended or removed without the need to put elaborate arrangements in place. It would in particular allow the Authority a greater flexibility in ensuring a fair and equitable distribution of the burden of the industry's costs.
The Bill also provides for a range of new controls in key areas. Section 26 provides that the Authority must approve the amount and form of prize money offered in respect of all races. This is not unreasonable, given that the Authority will be making a significant contribution to the prize money fund and will be, in effect, the guarantor of that fund.
The allocation of fixtures and the setting of programmes are functions which were heretofore performed by the governing bodies but which are now being assigned to the Authority. The Authority will have the principle role in regard to the development of Irish racing, especially in regard to its current funding. Fixtures are central to all of this and it is therefore logical that the fixtures committee be appointed by the Authority.
The establishment of the fixtures list is, of course, a sensitive issue and it is important that there is careful balance in the composition of the committee charged with deciding on the fixtures. We have provided for that balance in the legislation. The programme committee is also, of course, important and requires the participation of quite a number of people with specialist knowledge and expertise. It is sensible that it be left to the Authority to call on such expertise as is required without constraining its options in this regard through tight legislative provisions. Regarding race programmes therefore, section 20 provides that the Authority establish that committee after consultation with the regulatory body.
It is important to emphasise that the work of the Authority in this and in many other areas covers the industry in the whole of the island. It is also important that the potential of the industry in the whole island is developed to the full. I will be formally asking the Authority to have special regard in all of its activities to the development of the industry in Northern Ireland. I will be especially asking it to ensure that such development is catered for in the terms of reference of the fixtures committee and the remit of the programmes committee.
Section 33 of the Bill proposes to control starting price returns. All who are familiar with the racing scene will appreciate the need to ensure that there is only one starting price determined and published for each horse in any race. These starting prices are used by off-course bookmakers in setting the odds at which bets are paid. For this reason we must ensure that the integrity of the starting prices is maintained and section 33, as currently drafted, provides adequately for this. It is not intended to interfere with arrangements whereby racecourses benefit from the revenue generated by starting price contracts, but simply to ensure that this essential element in the running of racing is adequately controlled and is independent from sectional interests.
Section 53 deals with the regulation by the Authority of bookmakers on racecourses. The lifeblood of racing is the betting that takes place. In order to make racing attractive we must have quality racing at venues with good ancillary services and betting facilities. For example, I saw a new development at the Curragh racecourse over the weekend where a first class screen was installed across from the finishing line, courtesy of one of our electrical companies. The screen was of a very high quality and was one of the best I have seen at any track internationally. It would be nice for the ordinary punter, who cannot get into the boxes or the main stands, if they could see all of the race from the ground, with good quality facilities such as those introduced at the Curragh. This is only one example and I would like to see more facilities of this kind in many of the tracks around the country.
One of the initiatives which is provided for under section 53 is the possible introduction of betting offices at racecourses. I realise that there are those who strongly believe that this would not be a positive move. For anybody who knows anything about racing, one of these offices was installed at Leopardstown racecourse for some time and was discontinued. I believe that this was a mistake and a disappointment to many people who attend race meetings at Leopardstown. I would like to see that, not alone is it reinstated, but that a similar facility be provided at other race tracks throughout the country.
It is possible that the full range of betting services could be provided by an extension or development of the current system of on-course bookmaking at pitches. It may prove to be the case that in the long term a combination of pitches and betting offices would be the best method of providing the service which the punter wants. In the final analysis this is something which will have to be decided by the Authority. This Bill allows the greatest possible flexibility in that regard. However, in making regulations under this section, the Authority may take into account agreements reached between the racecourses and bookmakers. In that context I will be asking the Authority to decide on this issue at an early date.
In future, racecourses will be authorised by the Authority. Previously the Racing Board had no legal function in this regard. The new Authority must be in a position to ensure that all racecourses have appropriate facilities for all those involved in horse racing and are capable of providing a quality level of service to the racegoer. For example, I attended a race meeting at one the country's tracks over the Christmas period. Naturally, the weather was most inclement and very cold. My family was with me and we searched for some place to have a cup of coffee. We finally found a place, but it had no heating. Eventually a SuperSer heater was provided, but unfortunately it did not contain a gas cylinder, resulting in a chilly experience by all when taking the coffee and a great deal of criticism, especially from the younger members of my family.
This example illustrates the lack of facilities, and the lack of appreciation that there are other entertainments available on Saint Stephen's Day, a weekend or whatever. Unless those in charge of racing and race tracks provide suitable accommodation and appropriate facilities, younger people especially, and those additional people apart from the hard core racing people, will not be attracted to the racecourse.
The provision of section 59 will satisfy this need, and also the requirement that all racecourse authorisations have to be reviewed every five years. I hope this will ensure the maintenance of high standards on an ongoing basis so that if management of racecourses become lax they will be subject to review every five years and kept up to date.
Section 61 of the Bill deals with broadcasting and filming rights. It allows the Authority some say in the transmission or relaying of any broadcast of any race fixture. This is necessary in order to ensure that such broadcasting is always done in a way which is in the best interests of the industry as a whole.
I draw the attention of the House to two or three other provisions in the Bill which, in due course, could prove to be significant. Section 35 would allow a subsidiary of the Authority to apply for a bookmaker's licence. Under section 36, however, it would need the consent of the Minister for Agriculture, Food and Forestry and the Minister for Finance before it could establish such a subsidiary.
The operation of bookmaker offices by a subsidiary of the Authority could prove to be the vehicle by which a new range of betting services could be introduced. It could also be a revenue booster for the Authority. However, the relevant provisions in the Bill are enabling ones and the whole area would require some detailed research and analysis before any Ministerial consent, as provided for, could be given. I would also draw attention to the fact that joint ventures between subsidiaries of the Authority and other companies are provided for in section 36. This could lead to some beneficial partnerships between State and industry.
Part 9 of the Bill deals with the amendment of the Licensing Acts. The area of liquor licences for racecourses has been restrictive up to now. Sunday racing has added to these problems as occasional licences are not allowed for Sundays. The changes proposed here for horseracing are similar to those that have applied to greyhound racing since 1962. If it is to retain its customer support, racing must be in a position to provide a comprehensive entertainment and leisure service.
Standard provisions for State boards in relation to a code of ethics for the Authority and its staff and for ministerial control on pay, superannuation and borrowing are included in Part 2 of the Bill. The dissolution of the Racing Board and the transfer of all its assets, liabilities and staff are provided for in part 10.
Before I conclude, I would like to take this opportunity to pay tribute once again to the Racing Board, the Turf Club and the Irish National Hunt steeplechase committee for the magnificent contributions they have made to Irish racing down the years. I would particularly like to thank all those involved in the various committees and working groups that helped us to bring forward this Bill. I feel we are about to turn a corner and to witness the start of the next major phase in the development of the horseracing industry. I refer in particular to the Moriarty working party, the Dowling committee and the Brosnan interim committee which worked on the financing and structures of the industry for a few months earlier this year, preparing the ground for the Authority. All of the material prepared by the latter committee will now be examined by the recently appointed Authority acting in an interim capacity.
Inevitably there were on occasions different perspectives within the various groups, but they all worked conscientiously to overcome these and in the end the whole process concluded with broad consensus. This work was invaluable and I would wish to place on record our thanks to the chairman, Dr. Paddy Moriarty, Michael Dowling and Denis Brosnan and all the members of the groups for their unstinted efforts in sign-posting the way forward.
To reiterate briefly, in this Bill we are establishing an overall Authority to manage, promote and develop Irish racing; we are putting in place an updated and comprehensive legal framework for the industry; and we are giving legal recognition to the work of the governing bodies in regard to the rules and integrity of racing.
I commend the Bill to the House.
