FAI submit report to Government questioning public money injection into racing

[2 Year Contract]

https://www.independent.ie/sport/soccer/other-soccer/fai-submit-report-to-government-questioning-15billion-injection-of-public-money-into-horse-and-greyhound-racing/a2012246117.html

Good article. Will be interesting to see where this goes and if funds can be redirected into football and specifically the LOI. Personally I think it’ll be tough given how long standing the cosy number the racing industry has going for itself is

[Elfman]

Great article and Daniel McDonnell's opinion piece in the same newspaper is also worth a read (but that's behind the paywall).

What I couldn't get over was how the government, having ring-fenced the entire betting tax for horse and greyhound racing had to give EVEN MORE money from general taxation (during a recession no less) due to a minimum amount promise.

[Stuttgart88]

Welfare issues such as exporting children abroad should be a major concern for government. You'd also wonder just how big a "football industry" could be in Ireland. Players, coaches, hospitality, medical, media...

You'd have to think it'd be potentially (significvantly) bigger than greyhound racing and with much wider societal benefits.

[sbgawa]

Welfare issues such as exporting children abroad should be a major concern for government. You'd also wonder just how big a "football industry" could be in Ireland. Players, coaches, hospitality, medical, media...

You'd have to think it'd be potentially (significvantly) bigger than greyhound racing and with much wider societal benefits.

Well if we are like HRI we can claim the 6000 people working in betting shops.
Amazing that this nonsense was parroted by TD's but then they were probably completly aware it was nonsense but were looking after their pals in the industry

[nigel-harps1954]

It should be the line thrown back at An Taoiseach and other TD's who parrot the line of how many are employed. For a nation with our quoted GDP, and for how we seem to view ourselves as some big lads in the EU, we have the lowest number of full time employed coaches in all of UEFA.

Instead of this being a stick to use by TD's, it should be a national embarrassment and something they should be actively looking to rectify.

[EatYerGreens]

Great to see the FAI coming out fighting on this.

The funding of greyhound and horse racing in Ireland is perhaps one of the purest examples of what is wrong with politics here. Most people in the country don't really care that much about either 'sport'. Very few people here watch races, and fewer still attend them in person. Most of those betting in Ireland are not betting on those sports/live animals. Yet the goverment gives money hand over fist to 2 industries of limited popularity with questionable animal rights records. All because of an overly cosy relationship between the industries and politicians. The whole thing stinks and should have been challenged a long time ago.

[Another Bohemia]

Well if we are like HRI we can claim the 6000 people working in betting shops.
Amazing that this nonsense was parroted by TD's but then they were probably completly aware it was nonsense but were looking after their pals in the industry

Is that number just people working in physical betting shops or also in IT for large bookies that have headquarters here? Paddy Power and 888 for example both have a significant number of people working in Ireland on their online gambling products(development, trading and support). Wouldn't surprise me if they had the cheek to try to claim those people as well.

[Kiki Balboa]

Just to point out, a lot of the points raised by the Fai here were also mentioned extensively in threads on this site.


The subject really highlights how animal racing is hugely reliant on Government subsidies, and has very limited benefits to wider society. I thought it was hugely important to highlight how a lot of this money goes to only a few horse trainers, who really are the only real beneficiaries of this money. Overall, impressed with the Fai on this. With this, the successful rebranding of the league, the improvement of the league's online presence with highlights right away and LOItv, not to get too ahead of myself, but it is about as good as it could be at this stage after Delaney.


If I was the Fai, I would definitely build upon this report and focus on merging facilities development with urban renewal/ planning. That would mean working closely with local government, which might be more willing to work with soccer if the capital was readily available (such as raising it from the betting tax). It would also help to capture the public imagination, tying together a potential solution to one of the biggest crises in ireland at the moment. This way, you are trying to get as many people on board as possible.


The major problem they face is how stagnant and conservative (not in ideology but in methodology) the Government parties are, and how little ability they seem to have for changing direction - nevermind how scared they are of losing voters from rural Ireland considering they do not have much wiggle room in that regard. Thats the challenge, but there are resonable and viable paths to be explored.

[EatYerGreens]

The major problem they face is how stagnant and conservative (not in ideology but in methodology) the Government parties are, and how little ability they seem to have for changing direction - nevermind how scared they are of losing voters from rural Ireland considering they do not have much wiggle room in that regard. Thats the challenge, but there are resonable and viable paths to be explored.

Rural Ireland is of ever-diminishing importance though. The country is two-thirds urban now, and that continues to grow by 1% every 3yrs = a rate that will accelerate, due to the National Development Plan focusing on growing the regional cities and key towns quickly. Once three-quarters of the country is in urban areas by the middle of this century, rural Ireland will have very little political influence any more (i.e. like the situation in Britain). The one exception might be Fianna Fáil, who could end up disproportionately dependent upon rural voters as Sinn Féin eats up their urban support.

[Nesta99]

Just to point out, a lot of the points raised by the Fai here were also mentioned extensively in threads on this site.


The subject really highlights how animal racing is hugely reliant on Government subsidies, and has very limited benefits to wider society. I thought it was hugely important to highlight how a lot of this money goes to only a few horse trainers, who really are the only real beneficiaries of this money. Overall, impressed with the Fai on this. With this, the successful rebranding of the league, the improvement of the league's online presence with highlights right away and LOItv, not to get too ahead of myself, but it is about as good as it could be at this stage after Delaney.


If I was the Fai, I would definitely build upon this report and focus on merging facilities development with urban renewal/ planning. That would mean working closely with local government, which might be more willing to work with soccer if the capital was readily available (such as raising it from the betting tax). It would also help to capture the public imagination, tying together a potential solution to one of the biggest crises in ireland at the moment. This way, you are trying to get as many people on board as possible.


The major problem they face is how stagnant and conservative (not in ideology but in methodology) the Government parties are, and how little ability they seem to have for changing direction - nevermind how scared they are of losing voters from rural Ireland considering they do not have much wiggle room in that regard. Thats the challenge, but there are resonable and viable paths to be explored.

You are giving them too much credit. Any party in government will be hamstrung no matter how eager, until there is significant turnover of staff in the Civil Service and 'recruitment' as they call it, more accuratelly promotion with a dollop of job protection is replaved by a broader recruitment process. When that happens expect reform of planning process and a revamp of An Bord Pleanala - then you will see cohesive living city strategies like the 10 minute city that can include municipal sports facilities. The tail is currently wagging the dog in a number of civic departments - it is how the decision was made on social housing stock rightly becoming rent to buy but politcal efforts to replenish stock were stymied. Yes elected politicians also obviously had a role but the log jams in eg funding allocations being advanced, tend to be rooted in Civil Service delays and bureaucracy. It will happen but how long? Who knows.

[Stuttgart88]

Irish Times "Inside Business" podcast, with Fintan Drury and Stephen Henderson. I haven't listened to this (yet) but it should be of interest.

https://www.irishtimes.com/podcasts/inside-business/the-sorry-state-of-the-league-of-irelands-finances/

[listowelceltic]

Good listen Stuttgart..thanks for that.

[Kingdom]

You are giving them too much credit. Any party in government will be hamstrung no matter how eager, until there is significant turnover of staff in the Civil Service and 'recruitment' as they call it, more accuratelly promotion with a dollop of job protection is replaved by a broader recruitment process. When that happens expect reform of planning process and a revamp of An Bord Pleanala - then you will see cohesive living city strategies like the 10 minute city that can include municipal sports facilities. The tail is currently wagging the dog in a number of civic departments - it is how the decision was made on social housing stock rightly becoming rent to buy but politcal efforts to replenish stock were stymied. Yes elected politicians also obviously had a role but the log jams in eg funding allocations being advanced, tend to be rooted in Civil Service delays and bureaucracy. It will happen but how long? Who knows.

Ah man, there's so much inaccuracies here.

[Kiki Balboa]

The betting tax is surprisingly low compared to other vices like alcohol and cigarettes. If the FAI keeps pushing this issue and puts more pressure on the animal racing lobby, there might be a possibility of the tax being raised again. This would be to pay off other sports and reduce the pressure to review why only horse and dog racing receive these funds. This way, new subsidies can be shared with football, while horse racing keeps its current funding, and bookies would also be satisfied. I think that is a pratical route that might happen.


Moreover, I find the economic reasoning for subsidizing the horse racing industry a bit lacking. If it is a billion-euro industry, why does the government continue to subsidize it instead of building up other industries so they too can develop and then provide greater income into the public purse? After investing over a billion euros from the government exchequer, shouldn't the industry be expected to stand on its own feet? The industry is entirely capable, but it would require the richest individuals at the top to earn slightly less money. Talk bout welfare queens...


In the early 2000s, eleven million euros were invested in Dundalk racetrack instead of other facilities that more people would have used. In hindsight, Dundalk went on many European runs that had to be played in Dublin, meaning the town missed out on the economic benefits of football, while the racecourse is nearly always empty and exists only so bookies outside the country can sell bets on it. While I do not know the numbers, I could well believe that Dundalk FC would have generated more economic benefits for the town than the race track if they had received the eleven million euros for a new Oriel park.


This would only be the economic side; the difference in the social aspect would be crazily greater.

[John83]

Moreover, I find the economic reasoning for subsidizing the horse racing industry a bit lacking. If it is a billion-euro industry, why does the government continue to subsidize it instead of building up other industries so they too can develop and then provide greater income into the public purse? After investing over a billion euros from the government exchequer, shouldn't the industry be expected to stand on its own feet? The industry is entirely capable, but it would require the richest individuals at the top to earn slightly less money. Talk bout welfare queens...
It was explained to me once that the EU makes direct government subsidy of industries legally difficult, and that this was essentially one niche workaround. I'm not really qualified to judge the argument, but it at least sounds plausible to me.

[Jamesie]

It was explained to me once that the EU makes direct government subsidy of industries legally difficult, and that this was essentially one niche workaround. I'm not really qualified to judge the argument, but it at least sounds plausible to me.

How come the niche workaround isn't available to football? Look let's call it like it us....racing is the sport of the top .01% and the dogs are the equivalent of the gun lobby in America. The fact that Varadker completely blanked the argument last week confirmed this. Looks like Martin duped us with his positive tones last time out.

[John83]

I assume someone would have to treat young Irish footballers like racehorses - as potentially valuable assets for sale abroad - instead of as cheap fodder for the British youth system as we traditionally do. The Irish racehorse breeding industry is seriously globally competitive. It's not easy to find a route to being able to say the same about our football academies. Maybe Brexit will help in the long run, if we establish a pattern of decent players breaking into men's football here (and maybe finishing their Leaving Cert) before going abroad for a fee. Bazunu is an example of just what I mean. If the industry here were consistently a net exporter, it'd be an easier sell to government that finding a way to subsidize it would pay for itself. As it is, football tends to look like a mismanaged money pit.

There's also entrenched interests from other sports: there's no such upside to giving the GAA more money, but you'd **** off a lot of voters no end if you gave more money to football without a corresponding bump for themselves. And there's not much potential upside to funding the GAA better as they couldn't generate much international revenue.

[Kiki Balboa]

How come the niche workaround isn't available to football? Look let's call it like it us....racing is the sport of the top .01% and the dogs are the equivalent of the gun lobby in America. The fact that Varadker completely blanked the argument last week confirmed this. Looks like Martin duped us with his positive tones last time out.

I think the point is that it is a workaround for the racing industry. By using terminolgy that aligns racing with sports and ringfenced taxes based off sport, the government can support the industry maybe against the European rules on subsidies.

It well explains the double language used on the issues by racing and the politicans.

[Kingdom]

Direct state aid is what it is referred to - a legal minefield and hugely monitored and audited with scrutiny deep. Any searches on a particular website that governs such a scheme would be worthwhile I'd think.

I'd be quite sure that the FAI have been encouraged from clued-in public servants to submit the report in the detail to which it was composed in the knowledge that a proper effort, commissioned and funded by the FAI for a private entity to conduct would result in the information being substantial, undeniable, and the basis for a review and either ultimately reform or scrapping of existing systems. Govt silence shouldn't be taken as ignoring the matter at hand.

[Kiki Balboa]

Just buliding on that point, this might be the best moment that LOI fans reach out to local representatives on the underfunding of football.

Its been pointed out by various outlets that the FAI has struggled with lobby for the sport historically, maybe as the base, we should lend a support by highlighting and putting pressure to local TDs on this matter.

It might actually be the best time to do so as might actually make a difference now, because:

1) Government has a surplus
2) Government might want to this to be quickly dealt with so the spotlight is quickly from animal racing (which is increasing in baggage)
3) The report published has a lot of validity to it and raise very reasonable questions.
4) Football is growing massively recently and John Delaneys FAI is gone.

I really hate being the person to contact local representatives, but at least in my head, there might never be a better time.

Should this be something organised?

[JC_GUFC]

The betting tax is surprisingly low compared to other vices like alcohol and cigarettes. If the FAI keeps pushing this issue and puts more pressure on the animal racing lobby, there might be a possibility of the tax being raised again. This would be to pay off other sports and reduce the pressure to review why only horse and dog racing receive these funds. This way, new subsidies can be shared with football, while horse racing keeps its current funding, and bookies would also be satisfied. I think that is a pratical route that might happen.



Just on this point of the Betting Tax - at the moment tax is based on turnover (I think it's 2%) so for every €100 the bookmaker pays €2 in tax regardless of whether the bet wins or loses. Previously, before the advent of online betting, the customer paid this - I remember when I first started betting a £10 bet would cost £11 as there was a 10% tax. As a customer incentive bookmakers (Paddy Power) started to take that cost themselves and eventually the tax was reduced significantly.

The issue (depending on your point of view it may not be an issue, but as a gambler myself this will be an issue for me) with raising the betting tax is that this will reduce the bookmakers profit margins and this will likely results is worse odds for punters. In France they have an incredibly high betting tax and the argument is that people shouldn't gamble so if they lose more that's better because it will discourage them from gambling!
Another result of this would be people betting into "black markets" for which there is no taxation paid - this is already increasing with the actions of some bookmakers in dealing with certain smarter customers.

Anyway it's a pretty convoluted way of saying just upping the gambling tax isn't quite as simple and might have some knock-on effects and a 3% tax on stakes from a 2% tax on stakes isn't likely to lead to a 50% increase in betting tax revenue.

[Stuttgart88]

It was explained to me once that the EU makes direct government subsidy of industries legally difficult, and that this was essentially one niche workaround. I'm not really qualified to judge the argument, but it at least sounds plausible to me.


Direct state aid is what it is referred to - a legal minefield and hugely monitored and audited with scrutiny deep. Any searches on a particular website that governs such a scheme would be worthwhile I'd think.

I'd be quite sure that the FAI have been encouraged from clued-in public servants to submit the report in the detail to which it was composed in the knowledge that a proper effort, commissioned and funded by the FAI for a private entity to conduct would result in the information being substantial, undeniable, and the basis for a review and either ultimately reform or scrapping of existing systems. Govt silence shouldn't be taken as ignoring the matter at hand.

My understanding is that State Aid is allowed in EU if it’s seen to be beneficial for general economic development and isn’t anti-competitive. Creating jobs in coaching, for example, should tick both “exemptions”. Giving a LOI club money to finance infrastructure or hire academy coaches should be unambiguously accretive. Also, the whole idea of actually developing an industry which exists in other EU countries but not in Ireland should be fine too. You could argue that doing so actually enhances competition across the EU – if Irish football becomes stronger. Alternatively, you could make a case that intra-EU competition doesn’t really exist in this industry anyway, except at very elite level. A government subsidy to a football club or a regional academy in Kerry or Limerick isn’t at the expense of something similar in Luxembourg.

Also, EU competition law is quite flexible and in several cases in sport has supported measures that would be seen as anti-competitive in other industries. The very recent ECJ preliminary ruling in support of UEFA and against the protagonists of the Super League is a good example. The Champions League and UEFA’s control over it is obviously anti-competitive. But the ECJ agrees that UEFA’s objective of organising a single competition across borders and with its associated resdistribution of income across the EU and down the pyramid is legitimate and proportionate (i.e., the CL doesn’t go too far in the direction of monopolistic behaviour in achieving an objective that the EU agrees is legitimately in the best interests of football in the EU). EU case law is full of examples where the principles of objective legitimacy and proportionality are used to support measures that would otherwise be seen to be anti-competitive. In fact in the ECJ Super League preliminary ruling I think the concept of the European Model of Sport (https://sport.ec.europa.eu/news/new-study-on-the-european-sport-model) was explicitly invoked, and UEFA’s upholding of this model (and the Super League’s model being seen as in conflict with this model) was a key factor in the ECJ’s ruling. In my opinion, supporting local football with direct government subsidy should be seen as actually supporting EU policy objectives.

Furthermore, I’ve heard the argument that FIFA doesn’t allow government interference in the running of national associations. I think that only relates to governments directly dictating football governance activity, not providing financial support.

I know there are some EU-facing civil servants in our ranks. Any thoughts?

[EatYerGreens]

Just on this point of the Betting Tax - at the moment tax is based on turnover (I think it's 2%) so for every €100 the bookmaker pays €2 in tax regardless of whether the bet wins or loses. Previously, before the advent of online betting, the customer paid this - I remember when I first started betting a £10 bet would cost £11 as there was a 10% tax. As a customer incentive bookmakers (Paddy Power) started to take that cost themselves and eventually the tax was reduced significantly.

The issue (depending on your point of view it may not be an issue, but as a gambler myself this will be an issue for me) with raising the betting tax is that this will reduce the bookmakers profit margins and this will likely results is worse odds for punters. In France they have an incredibly high betting tax and the argument is that people shouldn't gamble so if they lose more that's better because it will discourage them from gambling!
Another result of this would be people betting into "black markets" for which there is no taxation paid - this is already increasing with the actions of some bookmakers in dealing with certain smarter customers.

Anyway it's a pretty convoluted way of saying just upping the gambling tax isn't quite as simple and might have some knock-on effects and a 3% tax on stakes from a 2% tax on stakes isn't likely to lead to a 50% increase in betting tax revenue.

I don't buy this argument I'm afraid. Gambling is a societal problem for a not insignificant number of people, and it provides little or no genunie benefit to society. It's probably in the same peer group as cigarettes and alcohol, yet gambling only gets hit with a 2% tax ? That's far too feckin' low for something that causes so much damage for soem and delivers so little benefit in-return. At least alcohol has a very clear social function.

[Kiki Balboa]

https://www.independent.ie/irish-news/sports-minister-catherine-martin-called-for-1pc-betting-tax-rise-to-fund-large-scale-investment-in-sports/a723064693.html

[Kiki Balboa]

https://www.independent.ie/irish-news/sports-minister-catherine-martin-called-for-1pc-betting-tax-rise-to-fund-large-scale-investment-in-sports/a723064693.html

The amount of money here could roughly double the budgets for every academy, and leave fifteen million left to fund new facilities (funding a new stadium every two years).

[JC_GUFC]

I don't buy this argument I'm afraid. Gambling is a societal problem for a not insignificant number of people, and it provides little or no genunie benefit to society. It's probably in the same peer group as cigarettes and alcohol, yet gambling only gets hit with a 2% tax ? That's far too feckin' low for something that causes so much damage for soem and delivers so little benefit in-return. At least alcohol has a very clear social function.

I'm not sure which argument you don't buy.

I see in yesterday's article a 1% increase in the betting tax (2% to 3%) was expected to raised an additional €40m on top of the €95m, so that was one point I was making that a 1% increase wouldn't simply be half, there would be a decline in revenues for a few reasons.

Raising it to 10%, for example, would definitely drive people to the black market i.e. places which don't pay tax so can offer more competitive odds and also they would have little obligation in the way of responsible gambling.

I do agree that compared to alcohol and cigarettes the tax is very low.

[EatYerGreens]

I'm not sure which argument you don't buy.

I see in yesterday's article a 1% increase in the betting tax (2% to 3%) was expected to raised an additional €40m on top of the €95m, so that was one point I was making that a 1% increase wouldn't simply be half, there would be a decline in revenues for a few reasons.

Raising it to 10%, for example, would definitely drive people to the black market i.e. places which don't pay tax so can offer more competitive odds and also they would have little obligation in the way of responsible gambling.

I do agree that compared to alcohol and cigarettes the tax is very low.

If the tax on cigarettes and alcohol was only 2%, I have no doubt that those industries would claim that a big leap in duty would result in people doing more home brew, buying dodgy hooch, opting for smuggled cigarattes etc etc. With associated health risks claimed as a result. Yet we have high tax on cigarettes and alcohol, and those things are fringe problems in reality.

I have no doubt that the same situation would happen with regards gambling. Industries will argue against higher taxation on their activities and claim reasons why it shouldn't happen beyond reducing their profits, as there obviously wouldn't be much sympathy for that. It's an unfounded argument that's trotted out to protect the industries revenues and appeal. And I don't really buy it personally.

Let's not forget that there was significantly less demand for gambling 15-20yrs ago. The market has expanded because it's so ubiquitous and heavily promoted now. It would be nonesense to suggest that total demand would remain the same, or largely the same, with a large portion switching to dodgy alternatives if it became a more expensive activity. In reality a lot of people would just go back to not gambling at all or as much - which is exactly what they were doing until relatively recently. As for "obligations in the way of responsible gambling...." regarding the current gambling providers. Yeaahhhhhh. Sure, sure.