FAI submit report to Government questioning public money injection into racing

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Originally Posted by 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.

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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.

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Originally Posted by John83

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.

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Originally Posted by 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.

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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 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?

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Originally Posted by JC_GUFC

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.

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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.

https://www.independent.ie/irish-new...723064693.html

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Originally Posted by Kiki Balboa

https://www.independent.ie/irish-new...723064693.html

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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).

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Originally Posted by EatYerGreens

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.

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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.

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Originally Posted by JC_GUFC

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.

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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.