THE racing and bookmaker industries are about to engage in a battle over betting tax with both camps trying to influence the Minister for Finance ahead of Budget 2018.

Irish racing received state aid of €64 million in the most recent budget, significantly more than the estimated €50 million taken in by the exchequer through the 1% betting tax on turnover in shops and online.

Now the Alliance for Racing, a lobby group representing all the major stakeholders, are preparing a report for the Government’s tax strategy group which will suggest that betting tax should be increased or even doubled.

Fine Gael chairman and Kildare TD Martin Heydon has advised the group to get its act together before the Dáil’s summer recess in July. Speaking at the Irish Racehorse Trainers Awards last Sunday, Deputy Heydon said: “There is a strong case for an increase in betting duty. The budget will be boxed off by the end of the summer, so now is the time to make your submission.”

Shane O’Dwyer, who represents breeders on the Alliance, confirmed that a detailed proposal is being prepared. “A lot of work has gone into it and it’s nearly ready to go. You’ll be hearing a lot more about it once it has been submitted to the tax review group.”

The Alliance is likely to tell the Minister that the offshore betting tax introduced almost two years ago has been very successful without causing excessive damage to bookmaker profits.

Andrew Coonan, the jockeys’ representative on the Alliance, said: “The betting tax issue is one of the few things that unite all the stakeholders. Our view is that racing needs to stand on its own in terms of financing and the betting tax looks the best possible solution. An increase of any sort would be very welcome.”

Horse Racing Ireland, as a semi-state body answerable to the Department of Agriculture, will be launching its own campaign. CEO Brian Kavanagh said: “The question of betting tax will form part of HRI’s pre budget submissions to the Ministers for Agriculture and Finance and is a regular agenda item on our discussions with both departments.

“HRI believes that the horseracing (and greyhound racing) sectors can be fully funded from betting duty as was the intention when the legislation was first introduced in 2001. Changes in the betting market and taxation rates have moved us away from that position.”

Racing’s efforts to have betting tax raised will be directly opposed by the betting industry. Sharon Byrne, chairperson of the Irish Bookmakers Association, said: “The racing industry is shooting itself in the foot. Only recently HRI recognised that on-course bookmakers are struggling and needed to have their fees lowered. The betting shops are no different.

“Our industry is in freefall. There were 1,365 shops in 2008 and only 851 today. The consolidation has not stopped and every closure is damaging the exchequer in terms of PAYE, PRSI, VAT and corporation taxes.”

Byrne also says that there has been an escalation in of illegal gambling in pubs and private clubs. “Increasing the betting tax will drive more people down that route.”

According to Byrne, the big profits are being made by global players such as Paddy Power Betfair who are trading on a worldwide stage. “Betting on Irish racing is declining. We estimate it is no more than 12-13% of turnover when it would previously have been close to double that.”

She said that the betting industry would be more supportive of Irish racing if Horse Racing Ireland was more co-operative in terms of race programming. “They want our money but are reluctant to work with us. It’s time to get real.”