Julian Muscat’s fascinating article on Brian Kavanagh, Chief Executive of Horse Racing Ireland, in last month’s issue was a reminder of the difference in how the British and Irish governments view their respective horseracing industries. It also explains why Irish racing, despite the collapse in the general Irish economy five years ago, has been able to claw its way back to a state of relative prosperity.
British racing could not, unfortunately, simply adopt the Irish way of doing things to enjoy similar prosperity in terms of prize-money and the quality of the race programme. As Brian reminds us, the strong part played by agriculture and by bloodstock breeding in the overall Irish economy means their government attaches a much greater level of importance to horseracing. In contrast, the British government just takes our racing industry for granted.
While Ireland, like Britain, allows off-course bookmakers to flourish, they have a very different system to facilitate the flow of money from the betting industry to racing. The function that our levy performs here is absorbed by the Irish government which operates a turnover tax on bookmakers and in turn makes an annual grant to Irish racing. If money from betting falls short, this is topped up from central government funds and, combining this with revenues from media rights, means that HRI knows exactly what their annual budget will be.
Significantly, the Irish government’s plans to extend that tax to offshore betting are already well developed and, when implemented, will produce more money for Irish racing. Contrast that with the British government’s proposed point-of-consumption tax. While this is greatly welcomed, none of the additional revenue is earmarked for British racing.
The Irish system means it is much less beholden to the betting industry than we are. Rightly or wrongly, we treat the betting industry as our most important customer and provide it with what they want, when they want – a policy that leads to a bloated fixture list with a surfeit of poor horses running for low prize-money.
The foundation of such a system lies in the fact that racecourses in Britain claim to own most of their fixtures, though this has never been legally challenged. With media rights now playing such an important part in racecourse income, the more fixtures they have, the better it is for them financially. But along with this there is an equal incentive to keep prize-money as low as possible, because prize-money is a major cost to the racecourse.
We treat the betting industry as our most important customer while Ireland does not
Horse Racing Ireland, on the other hand, benefits greatly from actually owning the fixtures. In this way they can control the number of fixtures and the quality of the race programme. It is a situation that has allowed them to stipulate that no race in Ireland is run for less than €7,000 and that there is no place for any horse rated below 44. The emphasis on quality, the article tells us, is so pronounced that 10% of all races run in Ireland carry prestigious black type.
Against this, the British fixture list and race programme is moulded more by the demands of the betting industry than by what suits the horse population. A three-runner novice chase might, for example, be anathema to bookmakers but there are times when such an event is needed from a horse and trainer’s perspective.
Listening to the wise words of Brian Kavanagh, there can be no mystery attached to why such a close and cooperative relationship exists between the Irish government and its racing and breeding industries. But we must do more than simply envy their position.
For when we learn from Deloittes that the total economic input of British racing is £3.45bn, that direct and indirect industry employment is 82,500, and that racing generates tax contributions of £276m, we surely have the ammunition to show our government that British racing is important to this country too.
