Sir, - Two separate items in your paper of last Saturday (March 7th) encapsulate the total lack of understanding of the betting industry which seems to affect many people outside it.

A letter from the Alliance for Racing and Breeding states rather bizarrely that a raising of the rate of betting duty would benefit bookmakers. However, just preceding this, an article appears which predicts between 2,500 and 3,500 job losses and the decimation of betting shops should the rate of duty be increased.

This piece refers to a report from Goodbodys Stockbrokers and is compiled by an independent financial expert. Given that the report is not on behalf of any vested interest grouping I think it fair to say that it is a lot more relevant to the debate than any unresearched wishful thinking comment.

Some 420 betting shops or 30% of the total have closed in the last eight years which is hardly the sign of an industry which can cope with an increase in the rate of duty.

Outside of the economic downturn the retail industry has suffered greatly from the anomaly in the rate of duty which has seen the online operators encourage customers to migrate to the duty-free platform.

Equally, the seldom-mentioned cost of pictures has proved too much for many small operators. My small shop will pay €45,000 for pictures this year which goes towards the €15 million-plus which Irish racecourses receive for picture rights each year. I rarely hear the racing industry make any mention of this sizeable sum.

It was interesting to see the use of the comparison of the Irish rates of duty with those in other racing jurisdictions. The international tax manuals, which lay idle for the many years of the stallion tax exemption, must have received a dusting down to provide these figures!

As was the case then, international tax rates only have partial relevance to our own unique position. For example, the UK tax rate is significantly higher but can be absorbed by UK shops because of the large profits they make from the controversial FOBT machines.

In addition part of the tax is only payable on bets taken on UK horseracing. Given that Irish retail shops only derive 12% of their turnover from Irish racing the adoption of a similar type of tax arrangement here could provide Irish racing with a rude awakening.

Equally irrelevant is the French system which induces much misty-eyed longing among racing professionals here. Given that it is based on a pari-mutuel system, it is highly unlikely to be introduced here anytime soon. Strangely enough these Francophilic tendencies never seem to stretch as far as calling for the introduction of French labour laws in their own industry. Rather inconsistent, n’est ce pas?

Betting duty is unique in Irish tax legislation in that it is based on turnover and is borne by the business not by the customer. By its very nature it is a blunt and unfair instrument as it is payable whether the business is profitable or not. The impact of a tax of the profits of a business is a far fairer and more relevant metric to use than the simplistic use of percentage rate of tax on turnover.

In 2014 Irish retail bookmakers would have made a profit of between €40 million and €45 million before paying duty of €26 million. This provides us with two interesting facts. The percentage rate of duty paid to profit is a penal 60%, and equally interesting is the fact that the grant to racing is well in excess of the the total pre-duty profits of the 1,000 retail betting shops in the country. Food for thought, is it not? – Yours etc.,

BRIAN COLLINS,

Bookmaker,

Askeaton,

Co Limerick.

Letters to the Editor should be addressed to The Editor, The Irish Field, Irish Farm Centre, Bluebell, Dublin 12. Name, address and telephone number must be included for verification. Letters are published at the Editor’s discretion and the Editor reserves the right to edit letters within reason.