Sports Minister Calls for 1 Percent Betting Tax Rise to Fund Large-Scale Investment in Sports

The proposal was rejected by then finance minister Pascal Donohoe. The link between the revenue generated by the betting tax and state support for the horse racing and greyhound industries has been under renewed scrutiny in recent weeks.

Last month the Irish Independent revealed details of a Football Association of Ireland (FAI) commissioned an analysis of betting tax by KHSK Economic Consultants that found €1.5bn had been raised for the horse and greyhound industry since 2001 through the tax, even though between 20pc and 30pc of all bets are made on football.

The ring-fencing of betting tax revenues for horses and greyhounds was formally severed in 2009, the FAI analysis said the amount brought in from betting duty continues to play a role in how much the State provides the racing industries each year.

The FAI report proposed three different reforms to increase funding for other sports. Included was a proposal to increase the betting tax to 3pc with the extra tax revenues ring-fenced for sports such as football.

It was estimated the increase to 3pc would raise tax revenues from €95m a year to €135m. If the extra €40m was split between other sports based on the amount of bets they generate that would lead to an annual €20m dividend for football.

The Sunday Independent has learnt that Ms Martin, supported by then junior sports minister Jack Chambers, wrote to Mr Donohoe on August 9 last year to advocate for an increase of the betting levy to 3pc. She proposed that the additional yield from the tax would be allocated to fund large-scale sporting infrastructure.

A spokesman for Ms Martin confirmed she made the proposal. “The Department of Finance subsequently decided not to proceed with the proposal and advised that money raised from the betting duty goes into general Exchequer funds rather than being ring-fenced,” he said.

The Department of Finance said the proposal was “one of many proposals received for Budget consideration”.

“The minister considered the proposal but decided not to proceed with it,” it said. The department spokesman said Ms Martin wrongly believed revenue from the betting tax was ring-fenced for the Horse and Greyhound Fund, an arrangement known as “hypothecation”.

“The basis for the proposal was a misunderstanding that hypothecation is a feature of betting duty,” the finance spokesman said. “This is not the case. While historically there had been a link between revenues accruing from betting duty receipts and the allocation to the Horse and Greyhound Racing Fund, there is no longer any hypothecation of these revenues.

“Consequently betting duty is not considered as a means for funding capital infrastructure or sporting funds. These matters are for the Department of Sport and the Department of Public Expenditure and Reform as part of annual estimates process.”

Mr Donohoe has since swapped ministerial jobs with Michael McGrath, who has moved from Public Expenditure and Reform to Finance.​

Asked if Mr McGrath would consider expanding the betting tax this year, the spokesman said: “It is not appropriate for the minister to comment on his budgetary options in advance of the Budget other than to say all proposals will receive appropriate consideration.”

At a Public Accounts Committee meeting last week, Brendan Gleeson, the secretary general of the Department of Agriculture, which administers the annual payment of €91m split 80:20 between the horse and greyhound industries, was quizzed by TDs about the fund.

“In a way, the Horse and Greyhound Fund is a bit of a misnomer,” said Gleeson. “Up to 2009, there were hypothecated taxes from betting tax, and they were given to the horse and greyhound sector proportionately according to the provisions in the legislation, which require an 80:20 split.

“Really, the situation now is that there is a Vote allocation [the amount of public money provided] for horses and greyhounds every year. It just so happens that it pretty much matches the receipts from betting tax.”

The FAI report said if monies were allocated according to the betting excise generated, horse racing would have received €35m-€45m in 2019, with greyhounds some €6m. Football would have received €16m-€26m, with just under €17m for other sports.

SOURCE: Independent.ie.