Seanad Éireann díospóireacht -
Thursday, 1 Jul 1999

Vol. 160 No. 2

Horse and Greyhound Racing (Betting Charges and Levies) Bill, 1999: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Agriculture and Food (Mr. Joe Walsh)

I am very pleased with the lively debate we had in the Dáil on Second, Committee and Report Stages on this Bill. Three fairly significant changes were made to the original proposals in the Bill on Committee and Report Stages in the Dáil. These related to the extent to which the State bodies in question and the Ministers for Agriculture and Food and Finance would be allowed to alter the new turnover charges and the introduction of a three tier scale of rates on the flat-rate charges on off-course betting shops. Also the maximum rate for any foal levy to be introduced under section 5 of the Bill was increased. There is now a large measure of consensus on the provisions of the Bill as passed by the Dáil and presented here today. I now set out the background to these developments.

Last year strong representations were made by bookmakers that the competitiveness of their business was being seriously threatened by the recent growth and open promotion in the 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 in the long term, the Minister for Finance has, through the 1999 Finance Act, reduced the rate of excise tax to be applied to off-course betting from 10 to 5 per cent with effect from today, 1 July 1999.

The reduction in the off-course betting tax has implications for the on-course betting levy of 5 per cent which the Irish Horseracing Authority, the IHA, and Bord na gCon collect on bookmaker betting at the racecourses and greyhound tracks. Both bodies have in recent years, with the help of substantial Exchequer funding, invested in improved facilities to attract new patrons. One encouragement given to punters to attend race meetings to place their bets is the lower rate of tax or levy applied. In order to retain the differential and ensure 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 of the order of £6 million annually to the IHA and Bord na gCon. It was decided to proceed to eliminate the 5 per cent on-course betting levy provided satisfactory alternative arrangements could be made to replace the loss in revenue. This replacement income would need to be divided between the IHA and Bord na gCon on a roughly four to one basis.

On the basis of consultations which took place with industry interests and conclusions reached within the Departments, my colleague, Deputy Charlie McCreevy, the Minister for Finance and I jointly agreed and announced the following new measures.

In relation to on-course bookmakers, there will be a betting turnover charge at the rate 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 to be collected by the IHA and Bord na gCon respectively and also charges to 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 to be collected by the IHA.

In relation to 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 to yield annual revenue of the order of £1.7 million, and an additional flat-rate charge of between £500 and £2,000 to be levied on all high street betting shops to 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 at regular intervals to the IHA who will then forward 20 per cent of these moneys received 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 roughly £1.2 million and to Bord na gCon of about £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 in the region of £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 requires legislation and the relevant provisions amending the Irish Horseracing Industry Act, 1994, and Greyhound Industry Act, 1958, accordingly are included in this Bill.

The IHA and Bord na gCon are being given power 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 2.5 per cent maximum on the turnover charges and £1,000 to £5,000 depending on annual turnover on the flat-rate charges, although I would not envisage any substantive changes in the short or medium term. I emphasised that in the Dáil and I emphasise it again now.

The media have recently referred to a matter in relation to these changes. Senators may have noticed in the newspapers that there appears to be some controversy over when the provisions of this Bill will come into effect. On-course bookmakers say that while they agree excise duty on off-course bets on the high street is being cut from 10 to 5 per cent with effect from today, 1 July, the reduction in the IHA and Bord na gCon on-course levies is not taking place until later this month.

There is a perfectly reasonable explanation for this. The reduction of the excise duty was given effect in a simple section of the Finance Act which has already passed through this House. The provisions in the Bill needed extensive drafting and careful consideration by the Government and it is now being processed through the Houses of the Oireachtas. After it passes through the Seanad, it must be signed by the President and there is no way we can pre-empt the outcome of any legislation and introduce a change until the legislation has passed through both Houses of the Oireachtas and been signed by the President.

The processing of this Bill has been very expeditious and clearly the IHA cannot pre–judge a decision of the Oireachtas. I pay tribute to everyone concerned, particularly the staff of my Department and the draftsman's office who worked late into the night to process legislation very quickly. Processing legislation and drafting amendments is very time-consuming. When this Bill is enacted, I will sign the commencement order to bring its provisions into effect for the first date that is practicable and administratively possible.

Between now and the end of July there are not many major race meetings but at the end of July there is a major race meeting in the west, the Galway races. I intend to have this provision ready for the Galway races.

Mr. T. Hayes

It is a very important meeting.

Mr. Joe Walsh

I hope the Senator will be there, as I hope to be. When people collect their winnings, there will be no tax on them and this will be the first year that is the case. In the meantime, the same rate of levy or tax will apply to off-course and on-course for a couple of weeks. The controversy is unnecessary and it suggests we should introduce regulations before Bills are passed through both Houses of the Oireachtas.

The IHA and Bord na gCon are being given power under the Bill to alter the turnover charge. I do not envisage that happening for a considerable length of time. I have introduced a new cap on 2.5 per cent at the behest of Members of the Lower House who brought that matter to my attention.

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 the foals registered in the approved Stud Book maintained by Weatherbys 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.

I increased the maximum levy from £600 to £1,000 on Report Stage in the other House to ensure that it will be possible to charge proportionately more to the owners of higher value stock. I have received no specific or detailed proposals on this levy as yet. However, if such a levy is introduced, I expect it will start at approximately £25 for lower value animals and smaller breeders and reach £500 at the upper end. I could envisage a situation where up to 80 per cent of the revenue would be generated from the top 20 per cent of breeders who can best afford to pay. If some people can afford to pay £100,000 or £150,000 for the service of one stallion, a levy for the development and betterment of the industry should not be too onerous. However, a levy of £25 would be more suitable for people who can only pay £200 for that service and have only a couple of mares for national hunt or point to point meetings. I want to ensure proportionality and fairness when proposals are put to me under this section.

I have included in the Bill a number of important unrelated amendments to the Greyhound Industry Act, 1958, covering areas in respect of which equivalent measures for the IHA on the horseracing side were introduced in 1994. These are to empower Bord na gCon to establish subsidiary companies and to participate in joint ventures subject to ministerial consent, to remove the ban on tote credit betting imposed under section 20 of the 1958 Act, to 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 in relation to betting shops on horse racecourses; to provide general power to Bord na gCon to introduce charges for services and to increase the level of fines which may be applied in respect of offences mentioned in the 1958 Act.

On Committee Stage in the other House I added a section to give Bord na gCon a degree of flexibility on the appointment of committees to allow for the inclusion of people who are not members or officers of Bord na gCon. I also stipulated that such committees could be formed exclusively of people who are not board members to allow, if deemed appropriate, for the establishment of an independent committee of experts to make decisions in areas such as the control of racing. If there is any difficulty about illegal substances, which would enhance the performance of greyhounds, chemists or other scientific people would be able to go on a committee and adjudicate on whether offences were committed and to what degree penalties should be applied.

The Bill also includes a number of other relatively minor and mostly technical amendments to the 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 the bars at greyhound tracks to remain open for up to two hours after the last race instead of half an hour. If a person has a winner at the track, it would be nice to have a glass of champagne or a Paddy whiskey. A half an hour would not be sufficient to do that.

Mr. T. Hayes

This will help them to celebrate.

Acting Chairman (Mr. Glynn)

The Minister is generous.

Mr. Joe Walsh

The horseracing industry is an important sector providing approximately 25,000 jobs and the consequential benefits for tourism, the leisure industry, rural communities and the economy in general. In the past couple of years we have seen the development of many new and upgraded racecourse facilities.

In 1996 the IHA produced the first blueprint for the future of this sector in a strategic plan. I pay tribute to Mr. Denis Brosnan, chairman of the IHA, and his staff for its production. That plan envisaged the establishment of a capital development fund. This meant that if a track in any part of the country was in need of development, it would be able to receive pound for pound support for it. Many tracks have availed of this support. The fund will see the investment in racecourses of a total of up to £60 million over approximately two years, which will involve grant assistance from the IHA for almost every racecourse.

Many racecourses, such as Tramore, were almost written off. However, the people of Tramore said they wanted to retain the racecourse. They said they would raise money locally for its development if the Government matched it pound for pound. They have done a marvellous job with the racecourse. Attendances have increased and it is a great facility for the people of Waterford, Tipperary and the surrounding counties. That has been mirrored in many cases around the country.

The upward trend in betting, attendances, prize money and sponsorship over the past few years is continuing. In 1998 total betting was up by over 10 per cent and attendances were up to over 1.2 million. It is outstanding that 1.2 million people out of a population of 3.5 million go racing. Sponsorship and prize money have shown significant increases of over 15 per cent and 10 per cent, respectively. That is because we have better facilities, racecourses and stadia.

The Government is fully committed to the development of the horseracing industry. Over the past five years it has provided grant-in-aid in excess of £42 million to the IHA. This year will see the investment of a further £14.85 million of Exchequer funds in the industry, a not inconsiderable sum when one takes account of the pressures for Exchequer funds.

Capital investments aimed at upgrading and enhancing the 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, which has been successful.

I pay tribute to the leadership shown by the chairman of Bord na gCon, Mr. Paschal Taggart, and his board and staff. Greyhound racing attendances had almost halved and the industry was in decline. Many people have one or two greyhounds. We have some great trainers and we export many greyhounds. At the two semi-finals of the derby recently in the UK, the 12 dogs were Irish bred.

Over the past two years Shelbourne Park has become well known as the place to go for a fun night out with a difference. Perhaps if the Seanad finishes early on a Wednesday night, Senators might go to Shelbourne Park. The cuisine is excellent, the cellar is top class and there is betting and entertainment as well.

Mr. T. Hayes

The Minister might come with us.

Mr. Joe Walsh

Similar improvements were carried out at Tralee, Thurles and Waterford during 1997 and 1998. Work has commenced on a new stadium for Cork, which deserves it. I officially turned the sod for the development at Bishopstown a few months ago. This will be the number one state of the art greyhound stadium and track in Europe. There are plans for developments at other tracks, including Harold's 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 aggressive marketing, appears to be the key towards the successful promotion and development of the greyhound industry in the years ahead. The key performance indicators for the industry show substantial growth since 1995-96. The strong results of 1997 were surpassed by an exceptional performance in 1998 with total betting turnover up over 10 per cent, tote turnover at a high of almost £10 million, recording a 17 per cent increase, while bookmaker betting turnover at £22 million increased by 8 per cent. Total attendance increased by 10 per cent to 750,000 people. These increases augur well for the long-term viability of the industry.

The Government is deeply committed to this sector. Governments in the past decade have been committed to keeping up the momentum in these industries, which are important in themselves but also for the tourism and leisure sectors. They have substantial exports and create a very good image internationally when we compete at the highest level. During the past five years Governments have provided £17 million in grant assistance to Bord na gCon. This year will see the investment of £5 million of Exchequer funding in the industry.

The Bill will help to underpin the horse and greyhound racing industries in the long term and on that basis I commend the Bill to the House.

Mr. T. Hayes

I welcome the Minister to the House and thank him for his comprehensive speech. We have no problem with the Bill in principle but there are a few matters we would like to address in the course of the debate. I compliment the Minister on following the initiative of Deputy Yates and Deputy Deenihan when they had ministerial responsibility in this regard and building on the work they started.

Horse and greyhound racing is very big business. There is a direct connection between the prosperity of the economy and the number of people anxious to have a night out at the dogs or a day at the races. The 10 per cent increase in betting turnover and the increased attendance at greyhound meetings and race courses is a sign of a thriving economy. Racing may be seen as a minority interest but the industry employs more than 25,000 people around the country. Fewer are employed in the greyhound industry, although hundreds of people are occupied full-time or part-time in that industry. We are talking about securing the future of at least 25,000 people working in these industries. What is good for the industry is good for those who work in it.

Racing would have to defer to the popularity of Gaelic games, whether football or hurling, and other sports such as soccer and rugby. Racing does not attract the same level of interest as will the Munster final next Sunday, but no other sport can claim the same employment level, an important consideration that we must not forget during this debate.

I fully support the measures to develop, protect and expand racing. I was present in the Dáil last December when the Minister for Finance, Deputy McCreevy, announced in the Budget Statement that he would bring forward changes in betting charge at a future date. I remember the applause from the Opposition when he made that announcement.

These tax and levy changes can only be good for the industry. They will help to retain money in the economy that was flowing out of the country and we should support that approach. Many people have questioned the changes and we will have an opportunity to tease them out later. I concurred at the time with those who queried the £2,000 flat rate levy on each bookmaker's shop. Not all bookmakers have the same level of turnover as Ladbrokes, Paddy Power and the other bookmaker chains. Some bookmakers operate on a small scale. I welcome the change that has been made in the levy, but even a small levy can cause problems for some. I give as an example the betting shop in my rural locality which provides a service as important as the local pub or chemist. Older people in my area go once a week to the local village for a bet and a pint. The bookmaker has a low turnover and operates on a very tight margin and he has told me he will not be able to stay in business in the locality if he must pay a levy, because he would do much better in a built up area. I urge the Minister to reconsider this levy.

The reduction from 10 per cent to 5 per cent in the off-course betting tax is welcome as this will make a difference. Some punters availed of offshore telephone betting and Internet betting, but it would be much better to keep that money in our economy. We are fixated by the idea of higher taxes but the man in the street knows that tax reductions generate extra economic activity which produces more for the State coffers. I have no doubt that the tax reduction in off-course betting will increase revenue significantly. The elimination of the on-course levy will be welcomed by all who attend race meetings.

I hope the Minister will think long and hard about devising a mechanism to introduce a levy on the registration of foals. I know the section will not be implemented immediately but within a year or two the levy will be introduced. We have had debates on measures to assist people engaged in horse breeding on a small scale because there are few at the level of John Magnier of Coolmore Stud. I wish Mr. Magnier, a constituent of mine, and his colleagues well as he creates great employment in south Tipperary. The majority of horse breeders run small enterprises and we must try to target assistance at them.

The national hunt foal sales statistics show that hundreds of foals are sold for less than £1,000. These breeders should face only a small levy. The Minister indicated in his speech that it would start at £25 but it should be kept to a minimum to help the small scale breeders who are the backbone of the industry.

Without an increase in the numbers attending race meetings, the industry does not have a long-term future. There has been a noticeable improvement in attendances and I trust the numbers attending greyhound meetings has improved also. I know in some cases when the facilities were improved the numbers attending improved significantly. We cannot rest on our laurels and there must be more improvement. The promotion of racing is lacking. We tend to restrict our appeals to attracting the same pool of people.

Almost everyone is interested in attending one horse or greyhound race meeting during the year and that is why these sports should be promoted. Many people go to the races but they are drawn from a small pool. More advertising by the racecourses, the IHA and the Department is needed. We are not just selling sport, we are selling an industry. Every other industry is promoting and marketing to a great extent and we should do the same for the racing industry. Much more progress could be made in that area. The Minister is aware of the tremendous work at various race tracks throughout the country. Mallow is probably one of the best race tracks in Ireland. Clonmel race track which is in my constituency has recently received funding. I come from County Tipperary and it has three fine racecourses. Unfortunately, there is a cloud hanging over the Tipperary racecourse, formerly known as Limerick Junction racecourse. Many people wonder if it will still be there in five years time. I urge the Minister to secure its future. I know he has attended races there on numerous occasions and is aware of the its quality racing.

I will now outline a few details about Tipperary racecourse. Its seven furlong straight is one of the best in Ireland. A horse that wins on that stretch can win anywhere. There is history attached to many other aspects of the course. Many great horses started their racing career at Tipperary and went on to win big races throughout the world. The track is situated right beside Limerick Junction rail line. People from Galway, Cork, Dublin, Limerick, etc. can travel by rail to get to the course and that makes it an ideal location for a racecourse. It is a pity there is a cloud hanging over its future. I urge the Minister in his capacity as Minister for Agriculture and Food to make sure the IHA is fair to the Tipperary race track. It has been stated in the past that this racecourse does not get proper fixtures to attract punters and that it is given days that other courses do not want. It would be a pity if a racecourse like Tipperary was closed because it did not get the right dates.

I ask the Minister to examine admission fees when he holds discussions with the IHA. A fee of £8 per adult is too high for many people. For those who attend regularly and who are used to paying those fees it becomes another expense. For those the Minister is attempting to attract into the racing industry for the first time, admission fees of up to £10 can be offputting There could be a special month set aside to promote racing whereby families could pay a reduced rate. This measure would attract younger people to race meetings and enable them to see the benefits of the racing industry.

With regard to greyhound racing, I understand why the Minister wants bars at a track to remain open for two hours after a race. What effect will this measure have on local pubs? It is the local publicans who sponsor races.

I welcome the list of developments mentioned by the Minister earlier. However, the greyhound racing stadium in Clonmel has been closed for 12 months due to an ongoing dispute. I realise the Minister does not have the power to open the track but, during coursing week in Clonmel when thousands of people from all over Ireland assemble, there is no greyhound racing. These people have to travel to Waterford if they want to spend a night at the dogs. Everyone in Clonmel and south Tipperary wants greyhound racing to continue, even it is not at the existing track. I want the Minister to take account of this matter and help the people concerned. A few months ago I attended a public meeting on this matter and it was obvious that there was a lot of local concern about it. I am aware that the Minister's hands are tied on this issue but I am still asking him to try to do something about it. I know that the Minister of State, Deputy Davern, is also concerned about this.

The Minister referred to an article published in today's Irish Independent. I understand he is interested in the Bill being passed but other Bills have been guillotined and rushed through the other House in the past few days. Why was this Bill not treated in the same way? It is unfair to have two levels of punters. The Minister justified his actions by blaming the Oireachtas. It should be guillotined. It was expected to come into operation today, 1 July, and that is what should happen.

Mr. R. Kiely

Last year strong recommendations were made by off-course bookmakers that competitiveness in their business was being threatened by the recent growth and open promotion in the Irish media of offshore tax-free telephone betting services. In order to counteract the effect of these developments in our heretofore buoyant betting market and to best protect the Exchequer revenue from this source in the long-term future, the Minister for Finance made some provisions in last December's Budget Statement. He proposed that the rate of excise tax to be applied to off-course betting should be reduced from 10 per cent to 5 per cent. He also proposed the abolition of the on-course betting levy.

Horseracing and greyhound racing are major industries here. They provide thousands of jobs and contribute greatly to tourism and to the national economy. The 10 per cent levy on betting tax became an incentive to the betting public to use off-shore tax-free telephone betting. While the level of that type of betting did not make a major impact on excise revenue, the problem was increasing. Tax on betting brings in about £45 million per annum and it is necessary to protect that source of revenue. The best way to do this is to reduce the rate of tax here to internationally competitive levels. The Finance Act, 1999, provided for a reduction from 10 per cent to 5 per cent on off-course betting tax and the on-course 5 per cent levy was abolished. The proceeds of the 5 per cent levy on on-course betting has being going direct to the IHA and Bord na gCon.

To attract new patrons these bodies have, with the help of Exchequer funding, invested in improved facilities. That investment is best protected by large attendance figures and in recent years there has been a dramatic increase in the number of people attending race meetings. Punters are enticed to race meetings not only by better facilities but by being able to place their bets at a lower tax rate. It is only reasonable to expect that a reduction in betting tax and its elimination would have a positive effect on attendance numbers. The elimination of on-course taxes means a revenue loss of over £4 million to the IHA and £1 million to Bord na gCon. Alternative provisions need to be made to compensate for these losses and this Bill proposes to address that. A package of provisions is necessary and the Bill proposes to implement the part of the package that requires legislative change. Provision is being made for a new 0.3 per cent turnover charge on all off-course and on-course betting in bookmakers. There is a proposal for a flat rate charge of £2,000 on off-course betting shops and a flat rate charge on on-course bookmakers, and the Irish Horseracing Authority and Bord na gCon will benefit from an increase in annual grant aid.

Horse racing is an important industry which provides about 25,000 jobs and consequential benefits for tourism, rural communities and the economy in general. The most noticeable feature of the development of this sector is the promotion of many new and upgraded racing facilities. The task of providing better facilities and racing for the general public continues to be one of the primary objectives of all race courses, together with the need to improve conditions for those working in the industry.

In 1996, the Irish Horseracing Authority produced a five year strategic plan, the most important element of which was the establishment of the capital development fund. The fund has twice been increased and will see investment of up to £60 million in race courses over a relatively short period of time. Grants of about £21 million for the upgrading of race courses have already been approved, involving some assistance for almost every course. This substantial investment is working for the betterment of the industry as can be seen from its performance over the past number of years.

An example of this development and the grant aid being provided by the Government can be seen at Mallow racecourse.

Mr. Joe Walsh

The Senator should not forget Patrickswell.

Mr. R. Kiely

I will come to that and I will also mention Tipperary. The course in Mallow is now known as Cork racecourse but I cannot help calling it Mallow. The course has first class facilities which are an encouragement for people to attend race meetings.

At present there is no racecourse in County Limerick. I attended the last meeting at Greenpark and it was a pity that racing did not continue there until the new course at Patrickswell was ready. The new course is progressing well and I hope the Minister will perform the official opening next year. It will be a fine course which is badly needed in a county which produces many good race horses and has many fine stables.

I attended my first or second race meeting at Tipperary racecourse which used to be known as Limerick Junction. The future of the course seems threatened but I hope this does not materialise. I am sure the Government and the Minister, who has a great interest in horse racing, will ensure there will continue to be race meetings at Tipperary and I would not like to see any reduction in the number of meetings held there. Senator Tom Hayes said that the course does not attract first class horses and is allocated race days which other courses cannot facilitate. The Senator also said correctly that this course has a great tradition, particularly when it was known as Limerick Junction racecourse. As in the case of Mallow, I do not like to see traditional names being changed, but Limerick Junction is now known as Tipperary and I am sure I will attend race meetings there for many more years.

Racing had an excellent year in 1998. There has been an upward trend in betting, attendances, prize money and sponsorship over the past few years and the targets set in the strategic plan were surpassed in almost every area. Tote betting increased by over 10 per cent, attendances of over one million were up almost 5 per cent and sponsorship and prize money showed significant increases of 15.3 per cent and 10.5 per cent, respectively.

I am a member of a committee which organised a race day at Mallow recently for a GAA development in Limerick. We sold tickets and provided valuable prizes. The event attracted a large crowd and the manager of Cork racecourse was very satisfied with the attendance. Such efforts are being made by committees who sell tickets for £100 and provide valuable prizes offering cash, cars, holidays and so on. This event provided a most enjoyable day for people who attended to support the cause involved and it would help racing if more such events were organised.

Senator Tom Hayes mentioned the cost of admission fees, some of which are too high. A race goer who attended the Budweiser Irish Derby at the Curragh last Sunday pointed out that the cost of the train fare and the admission fee came to between £70 and £80, that was before he had placed a bet. It is a lot of money and would not encourage people to attend race meetings. There should be a tiered system which would provide everyone, rich or poor, with an opportunity to attend race meetings.

The greyhound industry is vital to the economy. I have attended many greyhound meetings and once owned a greyhound which I ran at Clonmel – he was beaten in the first round. However, I still have a great interest in greyhound racing. The Minister said that we should take a night off and go to Shelbourne Park which is a modern and attractive stadium. I had many enjoyable nights at race meetings at Shelbourne Park with the former Cathaoirleach, the late Seán Fallon, who was a greyhound enthusiast. I agree with the Minister that it would be a good idea for Members to attend Shelbourne Park and enjoy the racing. The late Seán Fallon had a dog which did very well in the Oaks at Clonmel.

I would like to see greyhound racing flourishing and it will receive the necessary support as a result of this Bill to ensure Exchequer funding is provided. I would also like to see the traditional sport of coursing developed as one cannot have greyhound racing without coursing. I wish the Bill every success.

Ms O'Meara

I am pleased to speak on this important and significant Bill. My family has a long-standing interest in the greyhound industry. Despite his advanced years, my father is still a committed small breeder and takes the dogs to Thurles where he enjoyed some recent success. It is on behalf of people such as him that I speak. While the Bill is fine legislation on one level, our only concern would be for the small breeder. My experience is of greyhound breeding. I have no experience of horse breeding. The Minister knows there are many small breeders throughout the country who enter their greyhounds in races for the enjoyment of it. The Bill seems to be geared towards large breeders and bookmakers. My colleague, Deputy Penrose, pointed out that there are many small horse breeders in his constituency.

That said, I welcome the legislation. I recognise, as does the Minister, that any industry needs to be upgraded periodically and it must be recognised that changes are necessary. This industry is important to the economy and that is recognised by the Minister and the Minister for Finance. We all know the latter's interest in this area. The Bill reflects many of his comments and declared intentions since becoming Minister for Finance.

No one could but recognise that the greyhound industry and dog tracks have improved considerably in past years, and I note the Minister's comments about the welcome improvements in Thurles. The industry's image has changed for the better and this is reflected in the figures the Minister quoted. The performance indicators record substantial growth in the relatively short period since 1995-6. There is no doubt that those figures are impressive and indicate that the investment is clearly paying off. The targeted investment and the forward thinking approach, especially towards marketing and changing the image of greyhound racing, have been very successful. Local economies throughout the country have benefited, including north Tipperary, and Senator Tom Hayes spoke of benefits in his constituency. That is noted, recognised and welcomed.

This legislation is important and significant and has long been called and pressed for by the industry. My only concern is that, especially on the betting side, there are many small operators and this legislation seems to be geared more towards the large bookmakers and large operators in the industry. Only time will tell what its effect will be. It is possible that, even without this legislation, changed economic circumstances would have a certain effect on this industry, as they have had on other industries. My only concern, as expressed by my colleague, Deputy Penrose, would be for the small operator. While we welcome the great developments in the industry and their contribution to the wider and local economy, we need to recognise that there are small operators throughout the country and people who only place small bets in small betting shops. I am sure the Minister knows this. However, I accept that we must also recognise that, if an industry is to survive, thrive and advance with confidence, changes must be put in place.

The Minister acknowledged that changes had been made in the other House to the initial proposals. I welcome them and look forward to further debate on the legislation.

Mr. O'Brien

I welcome the Minister and compliment him on this fine legislation. The importance of the horse and greyhound racing industries to the country is enormous with over 25,000 people employed, directly or indirectly, in the industry. The development of horse and greyhound racing facilities in recent years has been enormous with new and upgraded racecourse facilities available to the public and the people working within the industry.

In 1996, the horseracing industry produced its five year strategy plan. The establishment of the capital development fund was probably the most important part of it with an investment of almost £60 million in racecourses in a relatively short time. This was a remarkable investment and a great confidence booster for the industry for the future. The success of the strategy plan is clearly evident from last year with figures set out in the plan surpassed in betting, attendance, prize money and sponsorship and the figures for this year look set to rise to record levels.

The greyhound racing industry has developed greatly in recent years, with a new positive approach to marketing and selling the industry to attract people to become involved and to attend greyhound racing. The development of a new modern stadium in Shelbourne Park in 1995 was an enormous boost to the industry. Shelbourne Park is now the place to go for a fun night to enjoy the buzz and excitement of greyhound racing with the highest standard of comfort and hospitality available anywhere. While Shelbourne Park is the flagship of the greyhound industry. It is great to see the development of places such as Tralee, Thurles and Waterford and plans for development at other tracks which will not only benefit the tracks but also bring great benefits to the towns and regions in which they are located.

I draw the Minister's attention to Dundalk racetrack where many enjoyable nights have been spent in the past 50 years. In Monaghan, from where I come, a night at the dogs in Dundalk was the thing to do during the 1950s, 1960s and 1970s. I remember the late Paddy Cullagh, who was an usher in the House, telling me about the times they went to Dundalk racetrack from Dublin and the entertainment and enjoyment they had there. The track is becoming a little run down and I ask the Minister to see what funding or support he can give it because it would be a pity to let it become too run down. It was a flagship in the north-east and it would be a pity to let it close. Senators Tom Hayes and Rory Kiely mentioned places that were of historic importance in the south-east but I believe Dundalk would be just as historically important for the people of the north-east. It would be a great boost to Dundalk racetrack if the Minister would look at the situation sympathetically.

Bord na gCon is to be congratulated and complimented on its achievements in recent years. The growth in attendance figures speaks for itself. With 750,000 people attending last year, the long-term future is secure and can allow further development and expansion. The Government's commitment to the greyhound industry is strong. The investment of £17 million over the past five years is clear evidence of this. The Bill before us is designed to give further support to the industry and the Ministers for Agriculture and Food and Finance are to be complimented on the proposals it contains.

Bookmakers became concerned last year that the competitiveness of their business was being severely threatened by the growth in offshore tax-free telephone betting services. In order to counteract this, the Minister for Finance wisely reduced the rate of tax which applies to off-course betting.

I compliment the Minister for Agriculture and Food on the Bill and I welcome its introduction.

Mr. Dardis

This is a good Bill, it is non-contentious and it will be of significant benefit to the important national industry to which the Minister, Deputy Walsh, referred. I congratulate him on the tremendous work he has done during his several terms as Minister to promote the horse racing industry to a point where it has entered the mainstream of sporting activity. He has encouraged those involved in the industry to recognise the need to invest in racecourses and facilities and to provide people with entertainment in a highly competitive environment. One need only consider the range of sports offered by Sky Sports to see the competition the industry faces. The Minister has put in place a structure which has placed the industry on a firm footing. I refer here to the Irish Horseracing Authority, other initiatives and the plan he developed for the industry. He is to be commended for that work.

I live in County Kildare where horse racing is at the core of the people's being. It is by a considerable distance the single largest industry in the county and it is greatly important in terms of revenue and the numbers employed. However, it is even more important than that because, as the Minister said, horse racing conveys a positive image of Ireland abroad. A survey was conducted recently by the tourism organisation in Kildare which asked people to name the activity with which they most identified the county. The majority of people identified it with horse racing.

There is no doubt that County Kildare is associated with horse racing but, more importantly, the country is associated with it and with other equine activities, such as showjumping. There is a great onus on us, therefore, to ensure the industry is properly supported and developed. In addition to the industry's importance, it is central in terms of encouraging large numbers of people to visit Ireland and in promoting a positive image of Ireland abroad. This extends to the food sector because the industry helps to convey a green image in terms of animals that are naturally produced on limestone soils. That dimension of the industry is something of which we can be proud and it is important it is recognised.

I wish to refer to the National Stud which has been completely transformed. On a previous occasion when the House dealt with legislation on this issue, I said that it took considerable talent to lose money, from a farming not a breeding point of view, on 500 acres of prime Kildare land. Fortunately, stallions such Indian Ridge are standing at the National Stud and there has been a major improvement in the atmosphere there. The National Stud is a flagship of which we can be proud. The Minister visited the stud recently for the opening of the St. Fiachra Garden. The newly developed garden is an indication of the foresight of the management team at the National Stud, the members of which recognise that the stud is part of a tourism and entertainment package and should not be solely dedicated to the industry.

Senator Tom Hayes made a point with which I do not agree, namely, that horse racing is a minority interest. I do not believe that to be the case. In terms of the number of people who attend meetings, perhaps horse racing does not compete with great sporting events such as the Munster hurling final, at which the Minister may or may not be in attendance in the near future. As I said horse racing is a part of who we are. There were upwards of 28,000 people at Punchestown on the Wednesday of the festival meeting and that there were more than 20,000 people in the Curragh on Saturday last for the Irish Derby. This is evidence of the fact that horse racing is a firm part of the sporting mainstream.

We must accept the importance of allowing bookmakers to compete on an equal footing with their counterparts overseas. However, their position will become more difficult in the future. With advances in technology, such as the Internet and electronic mail, it will become much easier for people to place bets on events throughout the world. In my opinion the big punters, who are important to the industry, will begin to do this. That is why the legislation is important.

With regard to betting shop fees, licensing fees, etc. a previous speaker referred to the position of small rural bookmakers. One such bookmaker has his premises in my constituency in the town of Kilcullen, quite close to a restaurant that the Minister has been known to frequent from time to time. I do not underestimate the difficulties faced but I do not believe there is an area of commercial life where fees do not attach to the establishment of a business. It is perfectly reasonable to require small bookmakers to pay licence fees. I note that a range of figures for these fees has been provided and there is room for discretion in deciding on the level of fee to be paid in terms of the turnover of a business. As my late father said, he never saw a poor bookmaker. It has also been said – I may have said it to the Minister on a previous occasion – that fast women, slow horses and fattening cattle are the road to ruin. I have experience of slow horses and of fattening cattle but I have not had much experience of fast women.

Another point I wish to make involves prize money. I accept that developments have been made in this regard but we tend to hear only about high profile races offering prize money of £100,000 or more. Small owners – I was one until I saw the light – are at the core of the industry and some inducement must be provided in smaller races to ensure these people keep their horses in training, which costs about £150 per week, and pay fees to the Turf Club. These owners must be able to reap a reasonable reward in terms of the prize money on offer. They should not be obliged to continue their operation by living off the proceeds of betting on their horses. It is unsatisfactory that to remain in business these people are being encouraged to gamble. That is not desirable.

Certain racecourses do not deal respectfully with owners. I apologise to Senator Tom Hayes but I must refer to Tipperary racecourse as an example of this. I had a runner at a race meeting in Tipperary one evening and, having spent the day working, I arrived very late and I could not park my car or obtain a race card. If a person has a runner in a race, the least the management of the course can do is to ensure they are provided with basic facilities. If a football match, for example, was being played I am sure car parking spaces would be provided. Racecourse owners must give such matters serious consideration. If one has a runner at a country race meeting or at one of the race tracks, one should be entitled to a basic level of service. I am sure the racecourses will say that they are keeping the industry going and the owners and trainers will say that they are keeping it going, but a reasonable balance must be struck in this regard.

We must also acknowledge the major improvements that have taken place at the racecourses. Regarding the racecourses in Kildare, Punchestown can be favourably compared to any international course anywhere in the world. It is very successful. The Kildare Hunt Club and the directors of Punchestown who undertook that development deserve a great deal of credit.

Having regarding to the smaller tracks, Naas racecourse has prime facilities of the order the Minister referred to in Shelbourne Park. People can go to the racecourse, sit in comfort, have a meal, watch the races and place their bets. That is the way racecourses must be developed. It has taken a long time for people to realise that. The directors of the racecourses at Naas and Punchestown are to be commended. The turf club in the Curragh must also be commended. The facilities there have been improved. It is now much easier to gain access to it and it is an attractive place to go to now in terms of the entrance alone.

I take the point that has been made about the smaller courses. They are important, but they must realise that this is a competitive and difficult business and that they must compete in that marketplace. They cannot continue indefinitely to look to the Government to prop them up. They are commercial businesses and they should be run as such. The managers of the racecourses in Kildare realise that and they are prepared to take that on board. The increase in the attendances is a reflection of that. The managers of racecourses realise that they are in the entertainment business and not only in the sporting business and that they must produce good facilities that are of a comparable standard to facilities elsewhere.

I note what the Minister said about Newbridge dog track and I think it will develop in a similar direction. Events on these tracks are tremendous social occasions, even in terms of the charity meetings run at Newbridge dog track for organisations like CARE. They are very beneficial and good social evenings that can be enjoyed.

Senator Hayes made a very important point. It is a pity he was not here several years ago when he could have said that to his Fine Gael colleagues. The point he made is so important that I wrote it down. He said that when taxation is reduced more revenue is produced. That represents a sea change in thinking in the Fine Gael Party compared to the position several years ago. The conventional philosophy then was that if one reduced taxation, revenue would fall and all the services which the State required would also be affected. It has taken some considerable time to convince mainstream political opinion that the opposite is true, that when taxation is reduced, revenue will increase and services will improve.

I commend the Minister for what he has done for the industry. I am pleased this legislation is part of a continuing process that involves the improvement of the National Stud, racecourses and the horseracing and dog racing industries. I support the Bill.

Mr. Callanan

I welcome the Minister to the House and commend the introduction of this Bill. I wish to correct one or two matters on the record. I wish to acknowledge, as we all should, the Minister's work in establishing the Irish Horseracing Authority on a sound footing when he piloted legislation through the Oireachtas to give effect to that authority in 1994. We should also acknowledge the work he did in securing funding in the Estimates for the development of Shelbourne Park. It is also important to recognise that he put the funding in train for the development of the old Mallow racecourse, now the Cork racecourse. He had to pursue that vigorously when there was a change of Government and a possibility that such funding would be diverted to Limerick, which Deputy Rory Kiely might have appreciated. We would do well to acknowledge that we have a very committed Minister in this Department who understands his brief and is committed to doing a good job.

Most speakers have referred to race tracks in their general area. The Minister knows where Ballymountain is. It is one of the few racecourses that is on the Ordnance Survey map. The old Ballymountain racecourse was an international racecourse in the last century and into this century.

Mr. R. Kiely

The Senator never showed it to me.

Mr. Callanan

The Senator came over at night when he was canvassing for votes. That racecourse is still there and perhaps we should be saying to the Minister that it would be a closer racecourse to west Cork than the racecourse at Mallow.

It is correct to acknowledge what is included in the Bill. We have a strong betting market in the betting offices on the high street, which has been growing at a great pace in recent years, with a turnover of more than £360 million in 1994 which has now increased to an annual rate of more than £520 million. The Exchequer collects about 10 per cent in excise duties on these bets which yields a revenue of more than £50 million a year.

This market was seriously threatened by the open promotion by the Irish media of offshore tax-free telephone betting services. In order to ensure the future of the betting market and Exchequer revenue that accrues from it to Government, this year's Finance Act provided for a cut in excise duty on high street betting from 10 per cent to 5 per cent, which takes effect from today.

The Minister explained why there is a slight delay in the introduction of this measure. The Bill requires the President's signature and I hope there will not be any great delay on this. If she is here tomorrow, I am sure it can be brought before her for signature. We are working to ensure that the Galway races will enjoy the benefits that will accrue from this change.

The IHA and Bord na gCon have heretofore collected a levy on on course betting of 5 per cent. On the basis of the difference between the high street rate and on course rate, it was attractive for punters to go to the races to bet. To maintain that difference, it would be necessary to eliminate the on course levy. That would mean that the IHA and Bord na gCon would lose essential revenue of about £6 million a year and that loss would have to be made up in other ways. This Bill is providing for that. It provides for the abolition of the 5 per cent on course betting levy and introduces other charges on high street betting as well as on course bookmakers, which coupled with increased Exchequer funding and a contribution from racecourses, will more than compensate the State bodies in question.

The alternative finance measures include a betting turnover charge at the rate of 0.3 per cent to be paid by all bookmakers operating at horse and greyhound race meetings and on the high street, flat rate charges on bookmakers at racecourses to be decided by the IHA and flat rate charges of between £500 and £2,000 to be paid by high street bookmakers on each betting shop.

The annual grants in aid of 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. The IHA and Bord na gCon will arrange with the racecourses and greyhound tracks about their contribution.

The on-course charges will be collected by the IHA and Bord na gCon and the off-course charges will be collected on behalf of the IHA and Bord na gCon by the Revenue Commissioners and paid over to the IHA, which will then forward about 20 per cent of the moneys received from those sources to Bord na gCon.

These new arrangements will provide a new structure for the financing of those important industries. For the first time we will have tax free betting at racecourses and greyhound tracks, which should provide a real boost for the sector. A strong link will be established between the off-course betting market and the industry to provide the essential raw materials for quality racehorses, greyhounds and racing and one industry will help to fund the other.

We have a long tradition of good horse breeding and greyhound breeding. It is wrong to say that these sports are only for a minority of the population. Horseracing and greyhound racing are major sports. They are part of the tourism industry. They have served this country well and Ireland is internationally recognised as a breeding ground for good horses and dogs. As Senator Dardis said, this gives us a green image and it is good that the industry is promoted in such a fashion.

The horse and greyhound breeding and racing sectors employ 20,000 and between 5,000 and 10,000 people, respectively, and contribute to tourism, rural development and the economy as a whole. We do not want to be burdensome in our application of taxes or levies. Above all, we want to ensure the interests of the small breeders who represent the cornerstone of many rural communities are not adversely affected, especially in relation to the service charges mentioned by the Minister. The big breeder can afford to pay a higher fee while the smaller breeder pays a lesser one. The introduction of these charges is desirable in the interests of the industry. I commend the Minister for what he is doing and what he has done for the industry. I look forward to the Minister continuing this work. I commend the Bill.

Minister for Agriculture and Food (Mr. Joe Walsh)

I thank Members for their positive and constructive contributions which highlight the keen level of interest at all levels of society in the horseracing and breeding industry. As Senator Dardis said, we are discussing more than racing – we are discussing the breeding industry and a culture and tradition. This interest extends to this House where some Members are involved in a syndicate which owns at least one horse. I do not know how well he is doing but we look forward to seeing him race.

Mr. Dardis

They seem to be dining out well on him.

Mr. Joe Walsh

About two million people attend horseracing and greyhound racing meetings every year, which is impressive given the small population of five million on the island. Both industries operate on an all island basis and people North and South interact through these, which facilitates the breeding and racing industry. Hopefully that will continue and will be further enhanced after today's proceedings. The industry ranges from the smaller breeders to the bigger ones such as Coolmore which is at the top internationally, as well as Kildangan, Gilltown and the National Stud. The National Stud is a valuable asset of the Irish people. Its board of directors should be praised for the way it manages the breeding operation and continues to enhance the visitor facilities there, including St. Fiachra's garden. I suggest that Senators visit the garden which is a fabulous facility. It is a millennium commemorative project and was started on time. Although a millennium committee was established to plan various events, the National Stud is the only State body I know of which has independently commemorated the millennium.

While on the subject of Kildare, I also pay tribute to Trevor Coyle who rode Cruising, owned by Mary McCann, to a win in the Grand Prix in Aachen in Germany a few weeks ago against the stiffest of international competition. As has been said, apart from the value of the employment created, 25,000 people in the horse industry and 10,000 in the greyhound industry, we also have an outstanding reputation at competitive level, in both the thoroughbred and sport horse industry.

This Bill ensures we keep up with the times. Given the electronic services available nowadays, we are no longer on the periphery of Europe. We are internationally mobile and Irish people can access services, including betting, provided around the globe. A valuable industry was at risk because the Isle of Man, Gibraltar and other places were being used for tax-free betting and were heavily promoted in the sporting press. Following the reduction in the tax rate on high street betting from 10 per cent to 5 per cent, this Bill reduces the on-course rate to zero, as we want to attract more patrons to racecourses. Until this Bill is enacted in a few weeks, there will be equality in the rates available in the High Street and on-course which will be 5 per cent. I hope the on-course rate will be reduced to zero in time for the Galway meeting.

All these impressive improvements did not take place by accident. First, the structure had to be improved. It was very fragmented in the early 1990s as we had the Turf Club, the Irish National Hunt, the Racing Board and point-to-points. Similarly in the greyhound industry there was a lack of structure and facilities. The chairmen of those boards showed foresight and their leadership in this area was outstanding. When leadership is given, it is far easier for the Exchequer to support such proposals. The Exchequer did not support it 100 per cent. It specified that if the money was put up, at least pound for pound, and there was a good local board of directors, it would give its approval. There was a great partnership arrangement, similar to that which contributed to the growth of the economy which began in the late 1980s and early 1990s and is still continuing and we have one of the fastest growing and best developed in any part of the OECD due to partnership arrangements.

I pay tribute to everyone concerned, not only the directors but also those in Limerick and Bord na gCon which is presently headed by Michael Field and was formerly headed by Des Hanrahan, Sean Collins and others. In the horseracing industry we had Frank Smyth and others. I also pay tribute to the late Noel Ryan, a very good official, who died tragically at a very young age. I also compliment the various chairpersons and members of the boards, particularly Denis Brosnan and Paschal Taggart who have served in a voluntary capacity during these important years. If one had to pay professional people for the amount of time they put in, one would have a considerable bill.

The further changes proposed in this Bill represent another milestone for the horseracing and greyhound racing industries. The key to success in these industries, as with any business, is to con tinually review structure and performance to bring about the changes required for the circumstances of the time and to set realistic performance targets, deliver on them and manage the process of change in a strategic fashion through effective planning. This Bill is another step in that process. I am confident it is the right way to move forward. I will finish on that upbeat note. I commend the Bill to the House.

Question put and agreed to.

Committee Stage ordered for Friday, 2 July 1999.

Sitting suspended at 1.30 p.m. and resumed at 2.15 p.m.