I have been looking at introducing the Horse Racing (Amendment) Bill for some time now. Over the last number of years, the two main horse racing tracks, Down Royal and Downpatrick racecourses, have received a levy from the turf accountants at those courses. Consequently, over time, that has been impacted as a result of the sale of Down Royal racecourse. The previous legislation specifically named the two racecourses as opposed to ensuring that, if there was ever a change of ownership of them, that change would be covered. Consequently, we have not been able to provide funding or to ensure that the levy has been disbursed to the racecourses.
One can imagine the issues with that in that it costs considerable amounts of money to maintain and run a racecourse each year. The funding that was available through the levy on the bookmakers helped to enable the continuation of the racecourses. As a result of losing the levy, the racecourses have been put under significant financial pressure. Whilst it may not be altogether popular with the bookmakers that they have to provide that funding, nonetheless, it is an important part of the horse racing industry, because the racecourses can be maintained, safely and appropriately, in a safe condition for the welfare of the animals and for the safety of the staff and the public who are on-site.
The legislation is about ensuring that we are capable of continuing to provide support to the racecourses. It is a relatively short and simple piece of legislation, and I appeal to the House to support it.
I welcome the opportunity, as Chairperson of the Committee for Agriculture, Environment and Rural Affairs, to outline the Committee's views on the Horse Racing (Amendment) Bill. The Committee received an oral briefing on the Bill on Thursday 22 April. As the Minister said, the Bill is intended to amend the Horse Racing (NI) Order 1990 regarding the named beneficiaries of the horse racing fund. As we can see, the Bill is very focused, short and concise, and the aim is to get it completed before the end of the mandate. It will enable payments of the fund to resume at the racecourses at Downpatrick and Down Royal.
In providing evidence to the Committee, the Minister's officials outlined some of the history of the fund. It was developed in order to address declining gate receipts at the racecourses following the introduction of legislation that meant that people who wished to place a bet on a horse race no longer needed to attend the racecourse. As some of the bookmakers' income is obtained directly from betting on horse racing, there is an obvious and clear link between the two. It seems only fair that bookmakers should pay a levy to the racecourses from the profits that they make from their activities there.
The horse racing fund was established here in 1976 and is currently administered by the Department of Agriculture, Environment and Rural Affairs (DAERA) in line with the Horse Racing (NI) Order 1990, which requires that bookmakers make an annual contribution to the fund of an amount that is determined from time to time by the Department. The amount is also set after consultation with the bookmakers.
As it stands today, the levy is £99 for on-course bookmakers and £1,123 for off-course bookmakers. That rate was set by the Horse Racing (Charges on Bookmakers) Order (NI) 2010. The levy was to be uplifted in 2017, but that did not happen because of the absence of the Assembly. The rates, therefore, remain as I stated. Officials noted that it is not the Minister's intention to consider an increase in the levy at this point.
The Committee was told that a targeted consultation took place in May and June 2020 on the proposal to add the new operator of Down Royal to the 1990 Order.
Furthermore, as the legislation for the horse racing fund is now quite dated and is in need of review, the Department intends to undertake a wider, long-term, more comprehensive review of both the Order and the fund. Therefore, during the consultation, respondents were asked to comment on those longer-term review issues as well.
Members had received a written briefing on the consultation and were aware of the respondents' names and the main issues raised. The Committee heard that, because of the change of management at the end of 2018, the new operator at Down Royal had not been eligible for support under the 1990 Order, as it is not specifically named in the legislation. Payments to the previous operator of the Down Royal racecourse ceased from 1 January 2019.
Payments to Downpatrick racecourse also ceased while DAERA sought a decision from the EU Commission on the application of EU state aid rules. It became clear that an EU state aid application would be unlikely to succeed. However, following the end of the transition period on 1 January 2021, EU state aid rules no longer apply and any payments must instead comply with the UK subsidy control requirements, and that seems to be less problematic.
The Committee heard that £680,000 was sitting in the fund and no payments have been made since 2018. Members asked questions about how racecourses apply to the fund and the criteria for those payments. Officials told us that the purposes for which payments can be made are laid down in the legislation and include items such as prize funds and technical and other services. The two named beneficiaries apply by presenting a business plan that lays out how they will use the fund, and the business plan is assessed by DAERA staff. The use of the funding allocated to the racecourses is also audited.
The Committee also considered the situation in other jurisdictions. It was noted that both Britain and the South of Ireland have recently reviewed their arrangements. In Britain, the fund is administered by a non-departmental public body (NDPB) and includes income derived from online gambling, and the levy is set at 10% of profits. Meanwhile, the fund in the South of Ireland covers greyhound racing and 24 horse racing courses, and the levy is provided by way of the excise department.
The Committee questioned officials on the issue of a levy for online gambling and the possibility of widening the fund to greyhound racing and other local racecourses that may open in the future. We heard from officials that gambling and the licensing of bookmakers rests with the Department for Communities and that DAERA officials are working closely with their Communities counterparts on that aspect. We understand that Communities will undertake a wider review of gambling legislation at some stage in the future and that that will consider that aspect.
Some of the wider issues to be considered in the forthcoming DAERA review have already been mentioned, such as the inclusion of online gambling. Another issue is whether the Bill should have been widened to include greyhound racing. When questioned on that aspect, officials referred to the origins of the fund. Members will recall that I said earlier that the fund was developed to address declining gate receipts at racecourses, following the introduction of legislation that meant that people wishing to place a bet on a horse race no longer needed to attend the racecourse. To remain true to that fundamental principle, an assessment would be needed on whether gambling on greyhound racing was on-course, off-course or a combination of both.
Another issue raised by members was the potential to widen the fund, if required, to other racecourses that may be established here. Officials noted that they were aware of some discussions by third parties on the potential for a further racecourse at Giant's Park but that is only discussion and there are no firm proposals.
In summary, the AERA Committee noted the narrow scope of the Bill and discussed with DAERA officials other matters that may be presented at Committee Stage as areas for possible amendment. Overall, the Committee expressed no concern at the narrow scope of the Bill and looks forward to working closely with the Minister and his officials at Committee Stage.
The issue before the House is one of which many members of the public may never had had any knowledge. It is legislation required to put right an issue that has arisen on the funding of Northern Ireland's racecourses and the blockage to assistance that has prevailed since late 2018.
The legislative angle is that there is a need to change the existing Order to allow payments to be made from the horse racing fund to racecourses in Northern Ireland. I understand that the consultation and the normal practices have been carried out and that the responses received have been taken on board in the formulation of the amendment. I note that the consultation responses were largely supportive of the change.
The fund is made up of a levy collected from licensed bookmakers in Northern Ireland, and that finance provides support for horse racing at Northern Ireland's two racecourses at Downpatrick and Down Royal. The Horse Racing (Northern Ireland) Order 1990 is the legal basis for the horse racing fund in Northern Ireland. The change of operator at Down Royal meant that it was ineligible for support from the fund. That issue will prevail until the current work to adjust the legislation to allow payments to recommence has run its full legislative course. COVID-19 has been another limiting factor for the two racecourses, as has been the case with much of sport over the last number of months. With support being withheld for the reasons outlined, it will be all the more required moving forward.
Discussions have taken place on widening support to include other venues, such as greyhound racetracks and other venues not involved in horse racing. I urge that any further discussion on those points take a firm view on the wider societal impact of off-course and online gambling. Those issues should not be treated in isolation. In recent times, we have heard of the societal impacts of gambling and the negative impacts that it has. Currently, there is discussion on our laws on the matter and on the prolific nature of online betting. I welcome any steps to consider the matters effectively, including the impacts on society of online betting, which has seen a particular increase over lockdown. Cross-departmental cooperation will continue to be important in considering those issues further, ensuring that politics and decisions on competitive sport in this regard are fair, reasonable and balanced against a number of important factors. That said, this legislation is required, and neither venue should be disadvantaged further by its legal, albeit temporary, blockage. I support the Bill.
I thank the Minister for moving the Bill's Second Stage. The SDLP has no fundamental objection to the Bill because there is little in it to object to. However, a number of issues definitely merit consultation. I would appreciate further deliberations with the Minister — perhaps he will disclose later what those are — to bring us into line with the Republic and the UK.
Since 2019, no financial support has been paid out from the horse racing fund, because the original legislation did not take into account the possibility of a change in ownership of one of the two racecourses that the fund was designed to support. Given that the levy involved continues to be raised from licensed bookmakers as a condition of the licence, it seems perverse to prevent the owners of those racecourses from applying for that financial support.
I believe that the fund currently sits at around £600,000, with about £350,000 raised annually, and the Bill could be described as a simple piece of legislative bookkeeping by the Minister and the Department. That said, as we move into more contemporary times, a number of questions could be asked of the Department's approach: for example, is the legislation fit for purpose? In many ways, it is long out of date compared with the rest of the legislation on gambling in the North. For example, there should be a levy on online bookmakers, as a considerable amount of betting is now done online as opposed to in bricks-and-mortar bookmakers.
The fund was set up by legislation in the 1970s and amended in 1990. The vast majority of the fund is, as I said, raised from licensed off-course bookmakers, but the licence issued by the Department for Communities does not cover online betting. The two racecourses involved now have a more varied source of income than in 1990. If the fund is still necessary, should similar venues be able to apply for that support? Should it be extended to cover dog racing, for example? I would make the case that it should. Drumbo and Brandywell compete with Dundalk and other racecourses in the Republic that are substantially underpinned and supported by the state. They get significant drawdown to continue with their activities. Should a non-departmental public body be established for the purpose of oversight, as is the case in the rest of Ireland and GB? Stakeholders raised many of those questions during the limited consultation that the Department carried out in May and June last year. Those are issues and cases regarding the collection of moneys and funds and their distribution in a more equitable way to other courses, especially greyhound courses.
It is understandable that the Minister seeks a remedy as quickly as possible to the position in which the two current racecourses — horse racing courses, obviously — find themselves due to a flaw in the original legislation. However, we would like a firm commitment from him to a comprehensive review of the operation of the horse racing fund, its extension to greyhound racing and the provision of support to horse racing and similar activities for which he is responsible. That would enable the Minister to address some of the many issues raised by stakeholders and others in the sector during his Department's consultation on this short and limited Bill.