27th of January 2011 Author: Johnny Karp
The industry is in danger claims the Association CEO
Brian Kavanagh, the chief executive of Horse Racing Ireland, has proposed doubling of the horse racing levy, insisting that the horse breeding industry and the Irish economy on the whole could be severely affected by maintaining the current situation, the Irish Times reports.
Furthermore, Kavanagh opined that offshore operators should pay the same betting levy as the bookmakers operating on Irish soil.
Commenting on the reasons for these proposals, Kavanagh explained that the betting levy was introduced in 2001 to finance the industry and was determined at 5 percent and worked well, but was progressively reduced to 1 percent in 2006 and the liability transferred from the punter to the bookmaker. As a result, he said, the Horse and Greyhound Racing Fund had been gradually losing funds and had fallen from Euro 76 million in 2008 to Euro 57.2 million this year, making it impossible to develop a key industry from such a position.
Relying on statistics to support his position, Kavanagh called for urgent action, explaining that the industry provides 16,500 full-time jobs, and that the sector's value to the economy exceeds Euro 1 billion, as well as that industry attracts around 80,000 visitors on annual basis.
Bookmakers strongly oppose the HRI's position that the current one percent levy for off-track betting should be doubled. HRI also plan to apply the same taxes to the online betting firms and the high street bookmakers.
Reportedly, Kavanagh presented the government's agriculture, food and forestry committee with additional statistics according to which total betting in Ireland quadrupled from Euro 1.3 billion to Euro 4.5 billion from 2001 to 2009, while the return to the Exchequer more than halved to Euro 31 million, concluding that reduction of the betting levy to 1 percent was at the key problem of the equine industry.
'The rate is so low that the bigger betting operators can absorb it as part of their costs while the smaller operators find themselves struggling to pay a turnover tax irrespective of their level of profitability. The bigger operators also have online betting operations which avoid paying even this 1 percent levy. Online is effectively offshore and even telephone call centres based in Ireland route their calls offshore and thus accrue no duty,' Kavanagh concluded.
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