AS next Tuesday’s Budget draws closer, there is heightened speculation that the Minister for Finance will raise betting tax.

While the racing industry’s campaign for a tax increase has appeared to lose momentum this year, the issue has gained traction in mainstream media, primarily driven by revelations around problem gambling.

Senior TDs, including several with Cabinet connections, have in recent weeks issued public statements calling for a betting tax increase, fuelling conjecture that this year the Minister is prepared to act.

A year ago Minister Paschal Donohoe decided not to change the betting tax rate from 1%, a decision which may have been influenced by intense lobbying from the betting industry. However, he did say he would consider it again this year.

Sharon Byrne of the Irish Bookmakers Association claims that up to 300 of Ireland’s 850 betting shops will close if the tax rate is doubled to 2% of turnover, a charge they are prohibited from passing on to the punter. “It is fantasy to believe that doubling the tax rate will double the revenue by another €50 million,” she said. “Margins in betting shops are already very tight to compete with the online market. A 2% turnover tax will close 300 shops, resulting in 1,500 job losses.”

MEDIA REVENUE

As well as depriving the exchequer of millions in lost employment taxes, betting shop closures will also directly hit Irish racing’s media rights revenue, warns Byrne. “The current media deal is linked to the number of betting shops open for business, and there is already a huge risk posed to this revenue by the proposed new regulations on fixed odds betting terminals [FOBTs] in British shops.”

One theory doing the rounds is that the Minister will introduce a tax on winnings in betting shops and online. This would incentivise big punters to return to the racecourse betting rings, where no tax would apply.

A senior figure with a respected online betting company told The Irish Field: “We’re hearing that the tax increase is a very real prospect. We are lobbying hard against it as we believe it will lead to more unregulated firms entering the Irish market. We have no problem supporting measures to tackle problem gambling. It’s an issue that already affects us and others in racing. It is a struggle to attract talent and sponsors into racing-related organisations as the issue of problem gambling is seen as toxic.”

Another senior racing industry figure who has been involved in the betting tax campaign said: “The Department is playing its cards close to its chest this year, so we await next Tuesday’s speech with bated breath. Even if the extra money is not promised to racing, it would be good to see betting tax raised as it would be another step along the path to making racing self-sufficient.”

HRI chief executive Brian Kavanagh said there was “no point” in speculating about what the Budget would hold for racing. However, he did take the opportunity to congratulate senior civil servant Brendan Gleeson on his appointment this week as Secretary General of the Department of Agriculture.

“We welcomes Brendan’s appointment which is well merited,” Kavanagh said. “Racing and breeding has been well served in recent years by the officials in the Department of Agriculture who have been very supportive of our industry.

“Brendan had direct responsibility for horse racing in his position as Assistant Secretary General and is very familiar with the issues and people within the sector. More recently he has been responsible for Brexit policy within the Department and is fully familiar with the concerns of the industry in that regard.I am delighted for him and look forward to working with him.”

RACING’S ANNUAL

GRANT

2014: €43 million

2015: €54 million

2016: €59 million

2017: €64 million

2018: €64 million

2019: ???