Kavanagh says HRI will find a way to cater for extra demands with same funding

Horse Racing Ireland chief executive Brian Kavanagh has refused to speculate on where efficiencies might be found following the government's decision not to increase the authority's funding for 2020.

In Tuesday's budget, finance minister Paschal Donohue confirmed that the Horse and Greyhound Racing Fund's allocation would remain at €80 million, of which €67.2m goes to horseracing.

Given the uncertainty surrounding Brexit and its impact, that was not a massive surprise. However, it will present challenges for HRI, which last month announced seven extra fixtures for 2020.

"It's too early to say what areas might be impacted," Kavanagh said on Wednesday.

"It will make things tighter for our budget for next year, but it was generally a standstill budget in the context of Brexit. It will put us under some pressure.

"We have extra fixtures to cater for and other requirements in other parts of the industry, such as pay agreements with staff and so on. We will digest it all and bring the budget for the year to the HRI board.

Paschal Donohoe: the Irish finance minister announced a conservative budget on Tuesday

He added: "We have been pushing a growth agenda for the past few years and used reserves to fund that one year, so that's how tight we are. We'll sit down and have a look at it, but you have to understand that the Brexit issue is the biggest one facing the country at the moment.

"We knew this was a possibility when we announced seven extra fixtures so we will look at everything in the round. It's too early to speculate on what areas might be impacted."

In last year's budget, HRI's funding rose by €3.2m for 2019. The doubling of the rate of betting tax from one per cent to two per cent, with the revenue yield on target to nearly double from €52m to €95m, had raised some tentative hope that the authority's allocation would receive another bump.

A deeply conservative budget ultimately put paid to those prospects, but Kavanagh nonetheless feels the increased revenue is a big plus for racing.

He said: "The important thing is that it moves it from a situation where the government were writing a cheque, on top of the betting tax take, to fund horse and greyhound racing, to a situation now where the betting tax take significantly exceeds the money going to the Horse and Greyhound Fund.

"That's a more comfortable situation for us to be in as you are not perceived to be taking money out of health or education budgets.

"Longer term, it does provide a basis for increasing the allocation that comes to horse racing, so that is very positive."

Ireland will host an additional seven fixtures in 2020Credit: Patrick McCann

Betting shop closures in Britain and Ireland also have a negative effect on the funding that underpins Irish racing due to the decreased media rights revenue, but Kavanagh insists HRI has adequately catered for those headwinds.

"What is probably having more impact at the moment is the weakness of the sterling," he suggested.

"The majority of the media rights deals are done in sterling, but the shop closures are along the lines of what we had budgeted for. The bulk of that impact is on racecourses as opposed to HRI directly, so it may impact their ability to provide capital funding.

"There is nothing there at the minute that is unexpected or that wasn't budgeted for – but we could do with sterling getting a little stronger.

"The negative impact of the media rights is somewhat offset by significantly increased revenue from streaming. Again, that's the same split, 92.5 per cent racecourses and 7.5 per cent HRI."

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