Committee Reports > List of Committees > Joint > 1992 > Committee on Commercial State-Sponsored Bodies (6th Committee) > Report No. 05 - Bord Na gCON

INTRODUCTION

(i)This is the first report which any of the Joint Committees on Commercial State-sponsored Bodies or their predecessors has prepared on Bord na gCon. Indeed it is the first report by any Government body on the Bord and the first related to the greyhound breeding and racing industries since the report of the Advisory Committee 40 years ago.¹ The industry has also escaped the attention of official statisticians and academic researchers, possibly because of its small scale and the scattered rural base of its operations. The Joint Committee has thus had rather less to go on in terms of socio-economic material than is the case with most of the state bodies under its purview. (A summary of such material as is available is contained in the Appendices.)

(ii)In these circumstances, the Joint Committee has decided that the most appropriate approach would be to concentrate its inquiries and its recommendations on the broad questions of public policy and on the structure of the Bord. Resources have, therefore, not been available for an examination of detailed aspects of the operations of the Bord, as would normally be the case in Joint Committee examinations. In any case, under the new structures recommended in this report, management arrangements should be greatly simplified in the future. Meanwhile, the report of the management consultants, Deloitte Haskins and Sells, on the operational aspects of the Bord, which was completed in 1989, still has considerable relevance.²

(iii)At the outset, the Joint Committee wants to emphasise that Bord na gCon is the inheritor of decisions taken and policies pursued by previous Boards of the Company. Also, the Bord must operate under a legal structure which is not of its making and which the Joint Committee considers to be a key source of many of the difficulties facing the industry. Since its appointment, the present Board together with management, has taken a number of commendable and sometimes difficult decisions. Thus the Joint Committee wishes to emphasise that where matters are criticised in this report they are not always wholly and some times not at all the responsibility of the present Board.

(iv)The Joint Committee would also like to acknowledge that in preparing this report it was greatly helped by the cooperation of the members and staff of Bord na gCon. In particular, the Joint Committee would like to acknowledge the assistance given by Mr. Kevin Frost, Chairman, and Mr. Sean Collins, Chief Executive, in the preparation of the report. Their contribution is all the more appreciated because, the Bord being a small organisation, they had limited scope for delegation. The other members of the Board also gave generously of their time to meet the Joint Committee and the consultant.

(v)The Joint Committee would also like to acknowledge the cooperation of many other individuals and organisations who submitted memoranda, gave oral evidence or met the consultant. These include the Irish Greyhound Owners and Breeders Federation; the Irish Coursing Club; Irish Council Against Blood Sports; Campaign for the Abolition of Cruel Sports; the Greyhound Racing Companies Association; the Irish Independent Betting Offices Association; the Irish National Bookmakers Association; Dublin Greyhound Owners and Breeders Association; and Messrs. Frank McDevitt and Brendan Harkin, Derry. The Joint Committee would also like to acknowledge the assistance of the staff of the British Greyhound Board; Mr. Frank Smyth, Chief Executive, The Racing Board; and Mr. Frank O’Donnell and Mr. Gerard Dromey of the Department of Agriculture and Food who gave time to the consultant and who furnished statistical and other relevant information.

(vi)Oral evidence was taken from Bord na gCon on 12th June, 1990 and on 10th December, 1991; the Irish National Bookmakers’ Association on 5th February, 1991; the Irish Independent Betting Offices Association and the Irish Greyhound Owners and Breeders Federation on 12th February, 1991; and the Irish Council Against Blood Sports, the Irish Coursing Club and the Greyhound Racing Companies Association on 22nd October, 1991. Oral evidence is printed separately.

(vii)The Joint Committee appointed Mr. Jim Dorgan as its specialist adviser for the purpose of this inquiry and wishes to express its deep appreciation of the invaluable assistance given by him in the course of the examination of Bord na gCon.

1. SUMMARY

1.1Bord na gCon was set up under the Greyhound Industry Act, [No. 12 of 1958] with two objectives:

to control abuses which had developed in the greyhound industry; and

to help develop the industry having regard to its potential for generating agricultural income and exports.

1.2The Bord is controlled by seven Directors all of whom are appointed by the Minister for Agriculture and Food. Three are chosen from the Executive Committee of the Irish Coursing Club (ICC).

1.3Between 1968 and 1975 the Bord bought nine of the eighteen greyhound race tracks in the country (one of which has since been sold). These tracks account for about 75% of total attendances at greyhound meetings.

1.4The Bord is financed by a 5% levy on on-course bookmaking and by the profits from totes at all greyhound tracks. The Government also grant aids the Bord.

1.5The Bord uses these funds to defray its own expenses, to distribute prize money and to assist in the development of greyhound stadia.

1.6Since the mid-1970s, attendances at greyhound meetings have been declining and this has put pressure on the Bord’s finances. Critics argue that the reasons for the decline are:

The Bord does not exercise effective control over racing;

The facilities at most greyhound tracks are obsolete and unattractive to potential patrons;

The quality of the service provided by bookmakers is poor.

1.7While all of these factors help to explain the decline in attendances at greyhound race meetings, the Joint Committee believes that changes in consumer taste and increases in competition from other forms of entertainment have also had an effect.

1.8The consequence of the decline in attendances has been a sharp fall in the Bord’s revenues. In real terms these have declined by 60% between 1980 and 1990. On the other hand, the Bord has not been able to control costs proportionately. As a result an operating surplus of £18,000 in 1987 has deteriorated to a deficit of £100,000 in 1991.

1.9Other than providing racing facilities and prize money over the years, the Bord has taken few steps to assist directly the breeding and export of greyhounds.

1.10Another published criticism of the Bord from some quarters is the close inter-relationship between it and the ICC. Critics assert that greyhound racing is “tainted” by any association with blood sports. It is also alleged that resources which properly should be allocated to greyhound racing have been diverted to coursing.

1.11In 1988, a new Board was appointed and it commissioned a study of the Bord’s operations by Deloitte, Haskins & Sells (DHS), a firm of management consultants. The consultants made a number of recommendations including the disposal of small tracks, the redevelopment of the large tracks, the introduction of computerisation and a redundancy programme.

1.12The Board accepted the report and a number of steps have been taken to implement its recommendations. These include the tightening up of control measures, more systematic dope testing, the allocation of grants to the redevelopment of the leading racetrack, the development of training courses in greyhound breeding and the promotion of greyhound breeding as an alternative farm enterprise.

1.13The Joint Committee believes that while desirable, the recommendations of the DHS report and the measures taken by the Board to date, do not go far enough. It notes that the backlog of investment in the tracks is enormous relative to the Bord’s means. It also notes that attendances are still falling and the Bord has an operating deficit, though this is now diminishing.

1.14The Joint Committee believes that the fundamental problem is that the 1958 Act is no longer an appropriate basis for the regulation and development of the greyhound industry.

1.15In particular, the Joint Committee believes that the tasks of controlling racing, developing the breeding industry and operating greyhound tracks are three different functions.

1.16In framing its recommendations, two alternative strategies presented themselves to the Joint Committee:

Privatisation: Repeal the 1958 Act, privatise the tracks and oblige the industry to become self-regulating and self-funding.

Continuity: Encourage the Board to continue with its current programme of reform measures.

1.17The Joint Committee considers that total privatisation could not be supported by the industry, at least at the present time. On the other hand, continuation of current policies is not sufficient.

1.18The Joint Committee’s recommendations therefore are:

(1)Control: The control function should be hived off to an independent ‘Control Authority’ comprised of seven members of whom five should have knowledge and experience of all aspects of the industry, including breeding, owning, track ownership and bookmaking, while the other two should be drawn from outside the industry. Its task would be to ensure that the highest standards are observed in greyhound racing. The Control Authority would also be responsible for implementing a code of practice for bookmakers (Paragraph 5.13).

(2)Track Management: The Joint Committee believes that an organisation constituted like Bord na gCon cannot compete effectively in the fast moving entertainment business. However, it recognises the difficulties involved in disposing of all of its tracks. It proposes that at least for the time being, the Bord’s tracks should be formed into a single Track Company subsidiary with its own Board of Directors who would be recruited from outside the industry but who would have relevant commercial experience (Paragraphs 5.14 and 5.15).

(3)Disposal of Tracks: Disposal of tracks should be a matter for decision in the light of commercial circumstances and the nature of proposals submitted by private and community groups (Paragraph 5.16).

(4)It is possible that some of the tracks will not find buyers and will have to be closed. However, some closures must be inevitable in an industry which has witnessed a 50% fall in attendances in the last fifteen or so years (Paragraphs 5.16 and 5.17).

(5)Totes: Management of the totes should also be assigned to the Track Company. Disposal of these by sale or franchise to outside groups may need to be considered if the recent changes in equipment and manning do not yield adequate returns to the Bord (Paragraph 5.18).

(6)Levy: The levy is relatively costly to administer and is uncertain in its impact. The Joint Committee urges that alternative methods be investigated for collecting it (Paragraph 5.19).

(7)Composition of Board: The Board should include members drawn from the main interests in the industry such as breeders, owners, bookmakers and private track operators. There should also be three independent members who would be chosen for their commercial expertise. The statutory requirement in respect of the appointment of three directors drawn from the Executive Committee of the ICC should be dropped (Paragraph 5.20).

(8)Functions of Bord na gCon: The Bord should continue to be directly responsible for the racing calendar, distribution of prize money, raising sponsorship, encouraging development of the breeding industry, assisting the development of stadia, promotion of exports and so on (Paragraphs 5.21 and 5.22).

(9)Relations with the ICC: There should be no statutory relationship between Bord na gCon and the ICC and the latter should become a fully independent self-regulating body. The ICC should, however, remain responsible for greyhound breeding. But all charges and fees connected with this function should be no more than is necessary to cover its costs (Paragraph 5.23).

(10)Funding: Bord na gCon’s requests for further funding from the Government should be considered in relation to the economic benefit arising from the industry. Steps to establish the economic importance of the industry ought to be initiated. But given the Government’s present fiscal problems, it is only realistic that the Bord and the industry assume that, apart from what the Government has specifically promised, the Bord will have to survive on its own resources (Paragraphs 5.24 to 5.28).

(11)Regulation of Horse and Greyhound Race Fixtures: In general the Joint Committee does not favour the imposition of restrictions on when horse or greyhound races may be held. It recommends the abolition of the ban on Sunday greyhound racing (Paragraph 5.29).

(12)Relations with Bookmakers: The Control Authority should be empowered to introduce a code of practice for bookmakers. Bookmakers’ pitch fees should be freely negotiated depending on the commercial circumstances of the individual tracks and should not be constrained as at present under the 1958 Act (Paragraph 5.30).

(13)Recruitment: The Joint Committee recommends that there should be open recruitment for senior positions in the Bord as was recently done in the case of a senior manager post for Dublin (Paragraph 5.31(1)).

(14)Admission Fees: The Board should be free to reconsider free entry concessions to tracks which at present run to almost one in every three attendees (Paragraph 5.31(2)).

(15)International Marketing Centre: While welcoming the concept, the Joint Committee cautions that it should only be proceeded with if it can be shown to be commercially viable (Paragraph 5.31(3)).

(16)Credit Betting: The legal ban on credit betting on greyhound racing should be abolished (Paragraph 5.31(4)).

2. THE ROLE, STRUCTURE AND FINANCING OF BORD NA gCON

Objectives of Bord na gCon

2.1The regulation of the greyhound racing and breeding industry in Ireland initially rested with the Irish Coursing Club (ICC) which was established in Ireland in 1916 as the successor body in this country to the National Coursing Club which was based in England. Dissatisfaction with the quality of the control exercised by the ICC over greyhound breeding and racing led to the establishment by the Government of an Advisory Committee following whose report the Greyhound Industry Act was passed in 1958 (See Appendix II for a brief review of the history of the Irish greyhound industry). This Act established Bord na gCon with two basic objectives:

Control: to eliminate the abuses which had crept into the greyhound industry during the preceding years and to create an open and competitive sport;

Development: to act as an agency for the development of a sport which was generating useful exports and revenues for the agricultural community.

2.2In fact the two objectives are interrelated. The availability of fair and competitive racing is necessary if dogs are to be bred and trained which are capable of attracting overseas buyers. By the same token, the development of export markets is essential if the flow of income into the sport is to be maintained and dogs produced for home racing.

Greyhound Industry Act, 1958

2.3The principal features of the 1958 Act are:

(1)Bord na gCon is established as a body corporate with a Chairman and six directors appointed by the Minister for Agriculture and Food for a five year term. (In the case of the Chairman, the term of office is at the Minister’s discretion). Three of the directors must be serving members of the Executive Committee of the Irish Coursing Club. (Note that these three directors are not nominated by the ICC).

(2)The Act gives the Bord wide-ranging powers to regulate all aspects of greyhound racing including the licensing of tracks and public auctions and the issue of permits to officials, bookmakers and trainers. The Bord can fix admission charges, entry fees and prize money for greyhound race meetings and also has power to issue exclusions and barring orders on individuals or their dogs, while the Bord’s Control Committee has power to impose fines.

(3)In order to help promote the industry, the Bord is empowered to augment prize money at greyhound tracks, to give loans and grants to tracks to enable them to improve their facilities, to assist exports and to advertise or assist tracks to advertise greyhound racing. The Bord can own and operate tracks and run public auctions of greyhounds. In fact, the Bord has a general competence under the Act to do anything it thinks fit to promote the sport (Section 16 (1) (viii)).

(4)By way of finance, the Bord has power to operate totes at greyhound tracks and to apply an on-course levy on betting at the tracks. From 1958 to 1990, direct exchequer support was limited to about £50,000 which was donated in 1985. In 1990, a grant of £500,000 was given by the Minister for Finance and this was raised to £750,000 in 1991 with the same amount payable in 1992 and again in 1993.

(5)The Act provides that the ICC should confine itself to promoting and regulating coursing and breeding. This, however, only applies in the Republic of Ireland. The ICC still regulates greyhound racing at the three tracks in Northern Ireland. The Act laid down the Constitution of the ICC and this can only be changed with the approval of Bord na gCon. The Board also has the power, in consultation with the ICC, to regulate coursing and to apply sanctions for transgressions. Bord na gCon may also advise or assist the ICC. In return, as noted in paragraph 2.3 (1), the ICC has three executive committee members on the Board. In effect, however, the day-to-day affairs of the ICC are a matter for its executive committee and Bord na gCon has little formal contact with ICC.

Control

2.4The control function of Bord na gCon is discharged by the Controller of Racing who has thirteen full time control stewards who in turn are assisted by two stipendiary stewards. One control steward must attend at each race meeting. The stewards are responsible for ensuring that the regulations set down by the Bord for fair and competitive racing are followed. If a transgression occurs at a race meeting, these officers can call a local inquiry and this may be referred back to the Control Committee. The Control Committee is comprised of the Chairman of the Board, the Chief Executive and three other members of the Board. It has the power to impose fines. Disqualifications and exclusions can be imposed by the Board. The conclusions of the Control Committee are published in “The Sporting Press”, the journal of the greyhound industry. Control stewards also oversee coursing meetings but this is no part of their responsibilities to Bord na gCon.

Racing

2.5The Bord has licensed a total of eighteen greyhound tracks in the Republic of Ireland. (As noted in paragraph 2.3(5) above, there are also three in Northern Ireland which are controlled by the ICC). Of the eighteen tracks, eight belong to the Bord: the remainder are owned and operated by the private sector. (The Bord has a minority share in one of these). Unlike the UK where there are two racing organisations, each with its own code, there is no greyhound racing outside the tracks licensed by the Bord in the Republic. In 1990, these tracks organised a total of 1,839 meetings at which 15,596 races were run. The number of meetings has shown a slight decline since 1980, but this has partly been counterbalanced by a slight increase in the average number of races per meeting. Attendances at these tracks in 1990 were about 725,000. This includes about 200,000 free entries which are comprised of bookmakers and their staff, old age pensioners and students and young persons. The number of paid attendances was therefore about 525,000 in 1990, a figure which is less than half the level in 1975. (See Fig 3.1, page 15).

2.6Races are divided into graded and open races. In graded races the racing manager at the track categorises dogs, who are mainly in the development stage, into comparable groups with the object of making a competitive race. Open races are

for the better dogs and there is no grading. Within the open category of races are the feature events and the classics. These latter are the highlights of the racing calendar and draw the largest crowds, the heaviest betting and the most valuable prize money.

Prize Money

2.7The largest single item of expenditure in the Bord’s budget is the distribution of prize money to the individual tracks. The total amounted to £816,000 in 1990 which was 55% of the Bord’s operating income. (See Table 3.2, page 45) for the figures for 1984-90). These grants are supplemented by prize money contributed by sponsors which the Bord and the individual tracks recruit. As a result, in the aggregate, prize money, after a decline in real terms from 1980 to 1985 has increased substantially over the last five years. Graded races attract flat rates of prize money from the Bord while prize money grants for the other races are a matter of decision for the Board in consultation with the individual tracks.

Tracks

2.8In the 1960s and 1970s the Bord’s support for the tracks comprised the distribution of funds to enable them to construct covered stands, provide bars and catering facilities and generally upgrade their physical assets. In addition the Bord subsidised private tracks. However, in 1968, Shelbourne Park in Dublin, then as now the premier track in the country, came on the market and in order to prevent it being lost to the industry, the Bord then decided to purchase it. The consideration was £240,000. The following year Cork was purchased and a series of acquisitions followed in subsequent years so that by 1975 the Bord had acquired nine of the eighteen licensed tracks in the country, with a significant minority share in one

other. As of 1990, the Bord’s investment in fixed assets stands at £2.45 million much of which is represented by land and buildings on its tracks. As the land has not been revalued since the acquisition of these companies, it is clear that the book value of the Bord’s fixed assets is greatly understated. In particular, the site values of Shelbourne Park and Harold’s Cross (the other track in Dublin) must now be several millions.

2.9Shelbourne Park, Limerick and Harold’s Cross are the largest tracks in terms of attendances. Together, these account for about 50% of the Bord’s tote and levy income. Cork, Dundalk and Tralee are next in that order and contribute about 20% of the Bord’s revenues. All but Dundalk are owned by the Bord. The remaining thirteen tracks account for the other 30% of revenue. However, it has been the Bord’s policy over the years to sustain the smaller provincial tracks with prize money and development funds (in the case of some of the Bord’s own tracks, operating subsidies) in order to provide breeders throughout the country with facilities to train and develop their dogs.

2.10The decision in 1968 to acquire and operate tracks was a major departure for the Bord. From being a small control and development organisation, it became a major commercial undertaking (at least in relation to the greyhound industry). In terms of assets and liabilities, costs and revenues, employment and management time, the tracks rapidly became and still remain a major preoccupation of Bord na gCon.

Marketing of Greyhounds

2.11Public greyhound auctions were subject to considerable abuse in the 1950s. It was recognised that these abuses undermined the credibility of the auctions and damaged the exports of greyhounds. Consequently, the Bord was given powers to control them. Today, auctions are operated by the Bord through sales companies at the Shelbourne Park, Limerick and Cork tracks. In 1990 there were 60 auctions and 3,256 dogs were sold for a total of £1.44 million. It should be noted that these public auctions handle a small proportion of the total number of dogs sold in the country each year: the majority of dogs are sold privately and these include dogs of the better class. This includes exports which in 1990 amounted to 9,932 dogs. Of these, 7,825 went to the UK. Bord na gCon has also in the past taken measures to encourage the sale of greyhounds to the US where the market is large and dynamic. However, the format and equipment of US tracks are different to those in Ireland and this plus the distance involved makes it difficult to penetrate the US market. However, as discussed in paragraph 4.3 (3) and (4) below, the Bord has plans to renew the attack on the US market (See Appendix I for background information on the greyhound industry and details of exports).

Structure of the Bord

2.12The organisational structure of Bord na gCon is illustrated in the graphic on page 20. As noted in paragraph 2.3(1), the Board comprises six members and a Chairman. The Chief Executive reports to the Board and he is assisted by two Deputy Chief Executives (DCEs) one of whom deals with the two Dublin tracks while the other DCE is the Controller of Racing and is responsible for control aspects of the industry (See paragraph 2.4 above). This DCE also handles the organisation of the racing programme and the recruitment of sponsorship.

2.13Also reporting directly to the Chief Executive is the accountant who is responsible for financial management and control. He is also responsible for personnel matters.

2.14Each of the individual tracks is owned by a company the shares of which are 100% owned by Bord na gCon (99% in one case). The Boards of these companies are composed of the Chairman of Bord na gCon, its Chief Executive and two other Board members and a Bord executive. Bord executives also carry out some of the functions of track management. Otherwise, local management is usually provided by the track Racing Managers. As the chart indicates, management of individual tracks report directly to the Chief Executive.

2.15Table 2.1 on page 22 gives details of the current level of employment in the Bord. As can be seen there has been a decline in numbers as a result of redundancy and retirements.

The Tote

2.16Following its establishment the Bord began to introduce totalisator machines at tracks throughout the country. The first were installed in Harold’s Cross and Shelbourne Park in 1960. Thereafter, they were gradually introduced throughout the country until by 1970 all but one track were equipped. Initially, win, place and forecast bets were offered but now jackpot and trio bets are also available.

2.17The equipment originally installed by the Bord was electro-mechanical. This was technically superior to the manual equipment at horse racing until quite recently. However, like the Racing Board, Bord na gCon has recently switched to computerised equipment. By comparison with electro-mechanical equipment, computerised totes require less labour, are quicker and offer a wider range of betting products.

Table 2.1 EMPLOYMENT IN BORD NA gCON

Betting Levy

2.18The principal source of Bord revenue nowadays is the betting levy. This is fixed by the Bord at 5% of all on-course bookmaker betting. Betting being a cash business there is ample scope for bookmakers to evade the levy. Likewise, there are opportunities for unlicensed individuals to make a book in the stands. These abuses are controlled in the first instance by levy inspectors who attend every race meeting. To reinforce their efforts in 1984, Bord na gCon decided to introduce an incentive scheme whereby for every increase in levy receipts over and above a specified target, a percentage would be returned to the track concerned to augment prize money. The prospect that some of the increased levy payments would come back to the track to stimulate attendances and therefore betting, appeared to prove effective. Certainly there was an increase in the betting levy receipts in 1984 and 1985. While some of this is attributable to the reduction in the on-course levy which took place at this time, part of the increase must have been attributable to improved cooperation by bookmakers.

2.19However, while some tracks benefited from the incentive scheme, others, perhaps through no fault of theirs, did not. In addition, it is by no means clear that evasion does not still continue. Certainly, it is the case that, following a surge in 1984-85, the upward trend in levy income tailed off. In 1991 therefore, the Bord changed to an arrangement whereby prize money will be more directly related to levy income generated at the individual tracks. Of course, this had an adverse effect on the tracks which benefited from the levy incentive scheme.

Summary

2.20Bord na gCon was set up in 1958 to control abuses in the greyhound racing industry and to help develop greyhound breeding as an industry with good export potential. The Greyhound Industry Act, 1958 provides that the Bord should be financed by a levy on on-course bookmaking and by a tote. In recent years the Government has also made direct grants to the Bord. Under the 1958 Act, the Bord has very extensive powers to control racing and to develop the industry. It has used these powers, inter alia, to acquire and operate nine tracks, to set up a levy collection and tote organisation and to regulate greyhound racing. It has also taken steps to encourage exports of greyhounds. The interventions of the Bord supported the industry and preserved the structure of tracks throughout the country. While in recent years there have been suggestions (which are examined in this report) that the number of tracks is excessive and that the private sector should be given a greater role, it must be recalled that in the 1960s and 1970s the private sector was unable to support this structure which, in those years at least, served the industry so well.

3.1 THE GREYHOUND INDUSTRY AND BORD NA gCON

Attendances at Greyhound Races

3.1During the 1960s and up to the mid-1970s, the popularity of greyhound racing increased. Starting at 725,000 in 1960, paid attendances at race meetings rose steadily to peak at 1,075,000 in 1975. The recession of the late 1970s led to a reversal of this growth and paid attendances began to fall. There was a slight recovery in 1978 and 1979, but since then numbers have fallen almost continuously (Fig. 3.1, page 15). In 1990, there were 525,000 paid attendances at greyhound meetings - a decline of 51% from the peak in 1975. Although there is another 200,000 persons who have free admittance to meetings, the impact of the decline in paid attendances on Bord revenues has been very great and has led to the accumulation of a number of problems.

3.2There are several causes for the decline in attendances at greyhound meetings. These are briefly reviewed in the following paragraphs.

3.3Most of the 1980s have been years of recession in Ireland and consumer budgets in particular have been under pressure. However, as Fig. 3.2 on page 17 suggests, this is not a convincing explanation of the downward trend in attendances at greyhound meetings since attendances at horse race meetings have been more or less constant throughout the same period. In fact consumer spending, after a fall in the initial years of the 1980s, grew throughout most of the period while the recovery in betting in 1984-85 (some of which may have been due to better collection of the levy) tailed off (Fig. 3.3, page 26). Clearly, factors other than the trend in consumer spending have been at work on attendances and betting at greyhound meetings.

3.4There is increasing competition for the consumer’s entertainment “budget” and with tastes constantly changing, it would seem that greyhound racing no longer has as attractive an image as it had twenty years ago. As a way of spending a relaxing evening, greyhound races have to compete with such things as modernised pubs offering food, entertainment, snooker, darts and TV. The introduction and dissemination of multi-channel TV, which enhances the attractions of home entertainment as opposed to going out for the evening, can also be counted a potent competitor. Cinemas have revamped their premises, films have become more spectacular and more heavily marketed, and cheap but attractive restaurants bring eating out within the means of the average consumer. All of these attractions, and others not mentioned, have emerged in the last decade as strong, if indirect, competitors for greyhound racing. The fact that greyhound racing is mainly an outdoor sport, and an evening one at that, accentuates its competitive disadvantage vis a vis other forms of entertainment. Obviously, improved facilities would go a long way towards alleviating this particular disability.

Specific Competitive Threats

3.5Moreover, greyhound racing has suffered from a number of highly specific competitive threats:

(a)Evening has traditionally been the time slot for greyhound races, but in recent years the Racing Board has introduced evening races. These now account for about one in every three horse race meetings annually. Evening racing has drawn away attendances and bookmakers from the greyhound tracks. Further extension of evening meetings and in particular the holding of meetings on Friday and Saturday evenings (evening horse races are still confined to mid-week) is seen by the Board as a critical threat to its future.

(b)Televising of afternoon races in the UK and their dissemination to off-track bookmakers via Satellite Information Systems (SIS) may have drawn off punters from both horse and greyhound tracks alike. But, of the two, greyhound tracks are likely to be the more adversely affected. Should bookmakers get the right to open their shops after 6 pm (a limit now prescribed by the Betting Act, 1931), this challenge will become even more acute. The strength of this challenge to greyhound racing is indicated by the fact that it is estimated that 12% of all off-course betting in Ireland is on SIS transmitted greyhound races in the UK. This is more than the amount wagered at greyhound tracks in Ireland.

(c)The introduction of a heavily advertised and well funded National Lottery may also have made inroads into the national “gambling budget”. In particular, it is thought that the ordinary punter, who patronised the tote, may be attracted by the lottery. If so, it may help explain the recent decline in tote turnover.

3.6All businesses have to contend with changes in taste and in the strength and diversity of competition. Arguably, those which affect Bord na gCon are no worse than those with which other businesses have had to contend. Over the past decade, in particular, the Bord has been exposed to the criticism that it has failed to find a competitive response in a changing market. It might be added that the Racing Board has suffered from some of the same pressures, and while it has generally had better success than Bord na gCon in terms of attendances and revenues, it has shown signs of weakness in the last year or so.

Control

3.7One area where it is alleged that the Bord has failed to meet the demands of customers is in the area of control. There is a strong body of opinion in the industry that the control function has not been rigorously discharged by Bord na gCon over the years and that as a result greyhound racing lacks credibility. This deters the punter and in addition makes it difficult for bookmakers to offer a good service, which is a further deterrent to attendance. It must be said that some critics feel that this is a matter of appearances and that in reality breaches of the rules are few and far between. Some critics allege that it may also be the case that bad management rather than malpractice is at the root of the perceived lack of control.

3.8For a good competitive race, which appeals to spectators and which provides attractive opportunities for both bookmakers and punters, it is essential that the form of the dogs be known to bookmakers and the betting public and that dogs of approximately equal capacities are pitted against each other. Of course there must be no interference with dogs by way of administering retarding or stimulatory substances. But even short of administering drugs, it is possible for good and bad dogs to be pitted against each other, either as a result of inexperience on the part of the track managers or as a result of collusion between owners and management. This provides opportunities for those “in the know” to effect betting “coups”.

3.9A practice which contributes to the superior knowledge of some punters vis a vis the general betting public and the bookmakers is unrecorded trialling. An arrangement whereby owners are permitted to trial their dogs on licensed tracks was introduced by the Bord as a means of generating ancillary revenue for the tracks. However, since the performance of the dogs is not officially recorded, the owner is in a unique position to judge the chances of his dog racing on that track. The bookmakers complain that the practice creates a major inequity. However, Bord na gCon maintains that unrecorded trialling is common in greyhound racing in Northern Ireland, the US and Australia and also in horse racing in Ireland. Furthermore, the Bord suspended unrecorded trialling at Shelbourne Park for a period of eighteen months without any appreciable improvement in betting. While not making a specific recommendation, the Joint Committee believes that this is an issue which should attract the particular attention of the Control Authority which the Joint Committee proposes should be established to ensure high standards in greyhound racing.

3.10The DHS consultants in their report on Bord na gCon argued that at least part of the cause of what was perceived as unfair or uncompetitive racing lay in the lack of good quality racing dogs, the best being exported to the U.K. According to DHS, this led to the situation where, in order to fill their programmes, racing managers were obliged to take dogs of variable or unknown qualities. This is more likely to be a problem in Dublin than in the provincial centres since greyhound breeding and owning is no longer carried on extensively in the city. In addition, it appears to be no longer worthwhile for owners to transport their dogs long distances into Dublin - at least for ordinary races. Consequently, the Dublin tracks do not have access to a large “pool” of dogs. By contrast, provincial centres like Limerick, Cork and Tralee have fewer problems and seem to enjoy better racing. It should be added that there is some feeling that the general quality of racing may have improved in the last year or so due to the decline in the export of quality dogs to the UK.

3.11It is convenient at this point to interject that the poor quality of the racing is sometimes attributed to the level of prize money. This is an area in which the Bord has some measure of responsibility. The fact that the Bord’s prize money grants for graded races does not discriminate in favour of the better dogs, also does not encourage attractive racing from the punters’ viewpoint. (It is of course, easily understandable from the owners’ viewpoint.). However, the Bord can say that even if it has been unable to expand its own contribution to prize money, it has been able to help with the recruitment of sponsorship and this has expanded the total amount of prize money available to the industry in the past five years (See Fig. 3.4, page 32). The Bord is also now considering the introduction of graded prize money for graded races. But with almost 16,000 races per annum even a small change in prize money can have a substantial effect on the Bord’s finances. It is also relevant to note that prize money is higher in the Republic than in Great Britain where there appears to be no shortage of entertaining racing.

3.12In the last year or so the Bord has taken a number of steps to strengthen the control function and in so doing to try and put to rest criticisms on this score. Measures taken include the introduction of dope testing on a regular basis. Whereas in 1990 only 12 tests were taken, this increased to 191 in 1991 after the establishment of a dope testing laboratory by the Board. In the current year the Bord expects that there will be about 1,000 tests. In addition, the number of stewards inquiries increased from 131 in 1990 to 318 last year. It is now also the official practice to announce the fact of an inquiry and the result. However, this has not stilled criticism. Whatever the reason, suspicions are easily aroused when races do not run true to form and punters or bookmakers lose money. In the light of

the foregoing considerations, it would be a large leap from there to the conclusion that deliberate abuses abound in Irish greyhound racing. Certainly complainants do not find it easy to adduce concrete evidence. But it would seem that credibility, having once been lost for whatever reason, is not proving easy to restore.

Quality of Betting

3.13The 1958 Act gives the Bord extensive powers over on-course bookmakers and some critics attribute the poor service offered by bookmakers to the Bord’s apparent willingness to tolerate lax standards. Amongst the criticisms put forward are that bookmakers do not put up their prices until races are about to start; that they do not price the whole field; that quite modest bets are sometimes refused; that unreasonably low limits are imposed; and that prices are subject to radical change at a moment’s notice. A further problem is that the number of bookmakers attending at greyhound meetings is declining. Many who have permits do not use them regularly: others arrive late for meetings having been in attendance at evening horse race meetings.

3.14On the other hand, the bookmakers contend that the problem lies in the lack of credibility about the races. According to them, the variable quality of the dogs, their unknown form, the apparent absence of control by the Bord and the possibilities for abuse, put them at a disadvantage against punters. In this context it has to be recalled that according to market research carried out by the Bord, and quoted in the DHS report, 80% of the attendance at the average greyhound race meeting are owners and their friends. The bookmakers contend that these people know more than the bookmakers. Since the uninitiated punter has disappeared from the tracks, the bookmaker is confronted solely by expert punters. In these circumstances, bookmakers find it unprofitable to attend meetings and, when they do attend meetings, many tend to offer a restricted service.

3.15To the extent that the bookmakers’ service is poor, spectators will be deterred from attending and betting at races. However, the Board contends that it lacks the necessary powers to enforce higher standards on the bookmakers. In this connection it should be said that court decisions appear to give bookmakers almost proprietorial rights over their “pitches” at race tracks. The Board believes that the best way forward would be to have its authority reinforced through the incorporation in the 1958 Act of a “Code of Practice” for bookmakers or that it be given statutory powers to implement one.

3.16One suggestion which is sometimes heard is to abolish on-course bookmaking altogether and provide tote facilities only. An argument in favour of this is that the profits from betting on the track would then accrue to the industry whereas at the moment profits from bookmaking accrue to the bookmakers. It might also be argued that the tote provides a sure and certain standard of service which accurately reflects the market. The fact that a number of countries with well developed racing industries, including the US and France, do not permit bookmakers, adds weight to this line of argument. The counter argument is, of course, that bookmakers appeal to certain types of punter who would be lost to the industry were bookmaking to be abolished. It is also said that an element of colour and excitement, characteristic of the Irish race meeting, would also be lost were bookmakers to be banned.

Facilities

3.17Although investment has taken place at the major tracks, there is a strong body of opinion that the standard has fallen well below what is necessary. Probably, the majority of the Bord’s critics would say that the poor standard of facilities to be found at greyhound racing tracks, and particularly the leading ones in Shelbourne Park and Harold’s Cross, is the single most important explanation for the decline in attendances. Substantial investment has been undertaken very recently in Shelbourne Park which has considerably upgraded the facilities there. To that extent these criticisms may, therefore, be out of date. However, they may still be relevant as an explanation of the downward trend in attendances over the years. Market research commissioned by the Board around 1988 and the DHS report indicated that the average visitor to greyhound race meetings was strongly deterred by the standards at these tracks. The criticisms related to poor standards of maintenance, lack of adequate catering and bar facilities, absence of parking, poor hygiene, and low standards of customer service by personnel. These criticisms are accentuated by improvements in these areas at most other forms of entertainment. Highly unfavourable comparisons have also been made between the quality of facilities available at the leading racecourses in Ireland and at many greyhound race tracks in the UK.

3.18The relatively poor standard of facilities at the metropolitan tracks (at least until very recently) is in part the outcome of the Bord’s policy down through the years of channelling resources in prize money to the provincial tracks in amounts disproportionate to their contribution to the Bord’s resources through the levy and the tote (See Fig. 3.5, page 36). This orientation of resources is accentuated by the fact that some of the smaller provincial tracks have

made losses and these losses have had to be made good from the profits of the metropolitan tracks. This policy reflects the preferences of breeders who have tended to be strongly represented on the Board and who in any case have a strong lobby in the Irish Greyhound Breeders and Owners Federation. There is no doubt that it has been of help to breeders who are, of course, mainly living in rural areas, to have tracks and races organised in their localities. However, the disadvantage is that the tracks which generate the Bord’s revenues have tended to be neglected in the past.

3.19As noted in the preceding paragraphs, the Board has now begun to rectify the poor quality of facilities by redeveloping Shelbourne Park. Using the funds contributed from the Exchequer the Board has completed the first part of a £3.5 million investment programme. This seems to have had at least some positive effect in increasing attendances. However, for reasons expressed in paragraphs 3.3 to 3.5, while improved facilities will undoubtedly increase the appeal of greyhound racing, it is unlikely by itself to arrest the decline in attendances. The long term decline in British greyhound tracks, which have seen attendances fall from 6.7 million in 1980 to 5.1 million in 1990, is instructive in this regard. This decline took place despite heavy investment in facilities.

Development of the Industry

3.20One other consequence of putting so much effort into prize money and racing at provincial tracks is that the Board has been unable to take initiatives to stimulate directly the development of the industry. Efforts to assist directly exports to the US market for greyhounds are probably the only exceptions and these have been limited in scope. In the area of marketing the Board has been able to argue that the UK market provides a large and generally good outlet for the Irish breeders. However, a situation in which the industry is dependent on one country for 90% of its exports is not healthy. On the other hand, the US market is very large and has witnessed very rapid growth. In comparison with a total of 7,000 greyhounds produced every year in the US, Irish exports number only a few hundred. Despite the difficulties involved in broaching the US market, there appear to be substantial and neglected opportunities there. However, the Board has plans to open up the US market. These are discussed in paragraph 4.3.

3.21Much the same can be said of the Board’s policy towards breeding where improvements are in the hands of fairly small scale operators. This means that problems such as infertility and disease control are inadequately studied. Other problems experienced in this area include inadequate information, lack of transparency in stud fees and lack of standards. It is also claimed that there is a lack of stud dogs of good standard at fees which the industry can afford. Recently, the Board has taken steps to deal with these problems (See paragraphs 4.5 (3), (4)and (5)).

Relations with the ICC

3.22Relations between the ICC and Bord na gCon was an area about which certain individuals and interests have expressed concern. The formal position is (see paragraph 2.3(5)) that three members of the Executive Committee of the ICC are appointed as Directors of Bord na gCon. In addition, the Bord has a supervisory role over the ICC with respect to its rules. The Bord also supplies stewards for coursing events and in the past it has grant aided the ICC. The ICC is, of course, the body concerned with greyhound breeding and controls the studbook. Greyhound owners therefore pay registration and other fees to the ICC. In addition, a rule of the ICC requires all greyhound owners to be members of a coursing club. At an informal level relations between the two organisations are also close since many people involved in greyhound racing are also involved in coursing.

3.23This relationship between the two organisations and the two branches of the sport has given rise to three sets of concerns. As expressed by the Irish Council Against Blood Sports and the Irish Greyhound Owners and Breeders Federation (amongst others) these concerns are:

(1)The objection to coursing as a cruel sport and the poor opinion which certain sections of the public retain for it, “rubs off” on greyhound racing with deleterious consequences for its appeal to the general public;

(2)The close formal and informal relations between the two organisations is such that there is a perception that the ICC exercises considerable influence over the Board and there is a perception that this has been used to ensure favourable treatment of the ICC by, for example, the payment of grants and the supply of control stewards to the ICC;

(3)The ICC earns substantial fees from the registration of greyhounds, the bulk of which are intended for greyhound racing while the fees benefit coursing. As a result, the ICC is prospering on the basis of revenues which should rightfully belong to Bord na gCon whose finances have been in poor condition.

3.24In response to these criticisms the Board points out that it has now stopped providing any grants to the ICC. Also, it no longer supplies or pays for stewarding. As for the other criticisms (e.g. ICC membership of the Board), the Board can reasonably claim that they are a result of the legal framework within which they are obliged to operate. However, Bord na gCon denies that the ICC exercises any influence over it. It contends that all members of the Board, including those nominated from the executive committee of the ICC, have acted at all times in the interests of Bord na gCon. With regard to the argument about the registration fees, the ICC argues, and Bord na gCon concurs, that these fees are used exclusively to defray the costs of operating the stud book and do not therefore accrue to the ICC or benefit coursing.

Tote

3.25The impact of the downward trend in attendances on the finances of the Bord is illustrated in Tables 3.1, 3.2 and 3.3, pages 44, 45 and 46, respectively. Table 3.1 shows that revenue from the tote has fallen by over £300,000 or by over 20% in the last decade. The totes operated by the Bord have tended to be highly labour intensive. In addition, the Board appears to feel that it is necessary to provide facilities at all tracks, including the smallest. As a result, despite the decline in revenue, expenses of the tote have continued to rise with the result that the Bord’s net income from the tote was only £234,000 in 1991 or about one third of the level in 1980. When allowance is made for price increases, this represents a fall of over 80%. This decline in what was once a major source of revenue to the Bord is a severe indictment of the way the Bord had been managed during this period. However, it is encouraging that the Board’s programme of computerising the totes combined with redundancies amongst operators has helped reverse the decline in profitability. The profit recorded in 1991 was a substantial improvement on the £116,000 recorded in 1990 (see paragraphs 4.5 (1) and (2)).

Levy

3.26Revenue from the levy has been more buoyant than that of the tote and the net income has increased by about 18% in the 1980s. There has, however, been little change in the total level since 1985. The difficulties in collecting the levy by virtue of the cash nature of the business have been adverted to in paragraph 2.18. When it is recalled that there are over 1,800 race meetings every year, it is clear that strict policing of the levy is impossible. The consequence is that relations between the Board and the bookmakers are envenomed by arguments over the amount of levy due to the Bord. The levy appears to yield a substantial income relative to the financial costs of collection, but its uncertain incidence and the cost in terms of bad relations with an important element of the industry make it desirable to find alternatives.

3.27Furthermore, Table 3.5, page 48, indicates that the levy may not be all that cheap to collect. This shows (Col 1) net levy revenue from the tracks in 1989; prize money from the Bord (Col 2); net payments or receipts from the tracks to the Bord (Col 3); and net payments or receipts as a percent. of prize money. It can be seen that ten of the eighteen tracks have net payments or net receipts which are plus or minus 15% of gross prize money. The abolition of the levy and prize money grants to these tracks would make little net difference to the Bord. Assuming the tracks could collect the levy or its equivalent from bookmakers, the abolition of the levy and prize money would make little difference to these tracks either. It is the other tracks which contribute all of the difference of £450,000 between levy receipts to the Bord less prize money grants. The abolition of the levy and prize money would, therefore, be an aggregate gain of this amount to the tracks which would, of course, be a loss to the Bord. The cost of collecting this £450,000 is probably about £100,000 which is not particularly cheap and reinforces the case for finding an alternative to the levy.

Financial Performance

3.28In aggregate, net revenue available to the Bord from the tote and the levy has fallen by £300,000 in the last ten years or so in current money terms. When allowance is made for inflation, the final column in Table 3.1, page 44, shows that the drop in the Bord’s revenues has been catastrophic: a fall of 60% in little more than a decade.

3.29Table 3.2, page 45, shows a summary of the Bord’s profit and loss statements for the period since 1984. As can be seen, the surplus before tax shows a rapidly deteriorating situation with a surplus of £18,000 in 1987 declining to a deficit of £319,000 in 1990. This has since recovered to a loss of £100,000 as a result of a reduction in the costs of the tote and general administration. (It should be noted, however, that both figures include redundancy and certain other outlays of a once-off nature which tend to exaggerate the size of the deficits). Moreover, the Board expects that it will break even in the current year. In an additional effort to curb the deficits, the Board has cut back on prize money and grants to the industry. Table 3.2 is supplemented by Table 3.3, page 46, which shows the sources and uses of funds by the Board. It can be seen that during the late 1980s, the Board made substantial investments in fixed assets which were financed partly by running down its liquid assets. In 1990, a substantial grant from the Government enabled the Board to resume its investments.

Summary

3.30The decline in attendances at greyhound races has resulted from a variety of factors. The perception that greyhound racing is not properly controlled, that the quality of betting is poor and the acknowledged inadequacy of the facilities at the leading tracks - at least until recently - have deterred attendances. Some of these problems stem from the Bord’s policy over the years of channelling resources to the industry in rural areas in the form of prize money and of supporting provincial tracks. The consequence has been the neglect of spectators who form the Bord’s revenue base. Long term developmental measures in the areas of marketing and breeding have also been neglected. However, the Joint Committee also believes that fundamental changes in the market have also taken place as a result of changes in taste and increasing competition. These factors are unlikely to be completely countered by any measures which the Bord can take. The long term decline in attendances at UK tracks is instructive in this regard. Whatever the causes of the decline in the market, revenue and profitability have deteriorated. Happily, from the preliminary results for 1991, the implementation of the reforms advocated by DHS appear to be bearing some fruit. But the Joint Committee is not convinced that the reforms undertaken by the Board will by themselves be sufficient to put its operations on a sound financial footing.

Table 3.1: BORD NA gCON: PROFITABILITY OF TOTE AND LEVY 1980-90

Table 3.2: BORD NA gCON: SUMMARY REVENUE ACCOUNTS 1984-1990

Table 3.3: BORD NA gCON: SOURCES AND USES OF FUNDS 1984-1990

Table 3.4: BORD NA gCON: SUMMARY BALANCE SHEET 1984-1990

Table 3.5: LEVY AND PRIZE MONEY BY TRACK 1989

4. RECENT ACTIONS TAKEN BY THE BOARD

Report by DHS, Management Consultants

4.1Concerned by the deterioration in the Bord’s position, the Directors, in January 1989, retained Deloitte, Haskins & Sells (DHS), management consultants, to review the policy and operations of Bord na gCon. They reported in September 1989 and their principal findings were as follows:

(1)A major dichotomy between the Bord’s need to obtain revenue from the major tracks (which the consultants termed “entertainment” tracks) and the need to support racing at the smaller provincial venues (or “training” tracks) was identified. The “training” tracks are located in rural areas and provide facilities and racing where owners can train and develop their dogs.

(2)The ethos of the Bord was judged by them to be administrative rather than commercial. For example, the consultants reported that the Bord had no formal budgets, business plans or forecasts. This lack of commercial orientation was the reason the Bord had failed to respond to the changing commercial environment of the 1980s. A related point is that the average age of Bord employees was high: over 60% of the executive and clerical staff had service of twenty years or more. (This has changed in recent years due to retirements and recruitment.)

(3)The consultants believed that departmental responsibilities within the Bord were not clearly defined. This also contributed to the situation where the Bord had no management information system capable of showing financial results in relation to managerial responsibilities. The Bord also lacked monthly management accounts.

(4)Cost structures had become excessive. The consultants believed that substantial savings could be made in the operation of the tote while with computerisation the number of people at head office could be reduced.

4.2The principal recommendations resulting from this analysis were:

(1)Resources (i.e. prize money and investment in facilities) should be concentrated on the leading tracks, especially Shelbourne Park, and consideration should be given to disposing of the smaller “training tracks” to community groups or private interests. By improving facilities and strengthening prize money at the major tracks the consultants believed that the quality of the racing and the size of the attendances could be increased.

(2)The head office should be reorganised, identifiable and measurable objectives should be assigned to the senior executives and a computerised management information system should be introduced.

(3)A redundancy programme should be introduced aimed at realising economies in head office administration. The consultants also identified major economies which could be effected in the operation of the tote. In all the consultants estimated that annual savings of £350,000 should be attainable.

Five Year Corporate Plan

4.3The Board accepted the consultants’ recommendations in September 1989 and in October 1989 the Chief Executive submitted a “Five Year Corporate Plan 1990-1994”. This was also accepted by the Board. The Corporate Plan comprised a total of 58 recommendations. In general, these dealt with the implementation of the consultants’ recommendations. In addition, however, the Plan made a number of additional proposals:

(1)The breeding and rearing of greyhounds should be accepted as an alternative farm enterprise and so qualify for support from the EC’s structural funds;

(2)The Bord should set up a training programme for greyhound breeders in conjunction with FAS;

(3)An International Marketing Centre should be established to promote the sale of Irish greyhounds to the US. This Centre would include a US-type track, a sales arena and a computerised pedigree data bank at an estimated cost of £1.12 million;

(4)A National Greyhound Stud should be established with particular attention to breeding for the US market. The estimated cost was £0.85 million;

(5)The Department of Agriculture and Food should establish a “Regulatory Racing Agency” with overall power to allocate fixtures and starting and closing times as between the Racing Board and Bord na gCon;

(6)A Code of Practice for bookmakers should be incorporated in the 1958 Act;

(7)Increased financial support should be provided for Bord na gCon in the form of:

4.4In January 1990, the Minister for Agriculture and Food accepted the proposals in the Corporate Plan with the exception of the call for an agency to arbitrate fixtures between Bord na gCon and the Racing Board. He decided that that should be a matter for negotiation between the two bodies. With respect to funding, the Minister for Finance in the 1990 Budget made available a sum of £500,000 to Bord na gCon with the understanding that this would be paid annually until 1993. In fact £750,000 was made available in 1991 and 1992 and it is understood that a similar sum will be provided in 1993.

Board Action to-date

4.5Since taking up office the new Board and Chief Executive have moved to implement the consultants’ report and the Corporate Plan. The following specific steps have been taken:

Management

(1)The Bord has negotiated a redundancy scheme whereby the number of persons involved in the operation of the totes has been reduced, in some cases by as much as 50%. There have also been redundancies in general administration and a backlog of pay claims which had built up by 1988 has been resolved.

(2)Computerisation of most of the head office functions has been completed. Likewise, a new management information system has been installed to support a formal annual budget and a monthly reporting system. Computerisation of the subsidiaries has commenced.

Development of the Industry

(3)In collaboration with FAS, Bord na gCon has developed a training course in greyhound breeding and rearing. Strong demand was expressed for the 25 places on the first course in 1991 and a new course will commence in 1992.

(4)Feasibility studies on the establishment of a National Stud and an International Marketing Centre have been completed and have received Departmental approval. As noted in paragraphs 4.3 (3) and (4) the capital cost of these projects is around £2 million in total. The projects will be eligible for assistance from the Structural Fund.

(5)The proposal that greyhound breeding be adopted as an alternative farm enterprise and be eligible for structural fund grant aid has been implemented and has attracted an encouraging response from the industry.

Track Development

(6)The Board has prepared and submitted to the Government, business plans for the development of Shelbourne Park. The capital cost is £3.5 million. Up to the end of 1991 £1,250,000 has been spent from the funds provided by the Government.

(7)A programme to computerise the totes at the tracks throughout the country has been completed which has enhanced the quality and range of the betting products offered and has reduced operating costs.

(8)In accordance with the recommendations of the DHS consultants, the Board has disposed of the Clonmel track to private sector interests and is negotiating the disposal of the Youghal track. Plans are also underway to dispose of other tracks including Harold’s Cross.

(9)Computerised form banks for dogs have been introduced in Dublin, Cork and Limerick.

(10)The Board has commenced the printing of its own racing cards at a saving of approximately £70,000.

Control

(11)A number of measures have been taken by the Board to update and strengthen the control function. Notable amongst these is the establishment last year at Limerick of a laboratory for dope testing. As recorded in paragraph 3.12 the Board has increased the number of tests and the number of stewards’ inquiries in the last two years.

(12)The Board has completed a lengthy review of the Rules of Racing. This was the first such review since 1958 and will involve 56 changes which will be implemented during 1992.

Summary

4.6DHS consultants recommended a series of actions aimed at reducing costs through redundancy and computerisation and improving profitability through concentrating resources at the major tracks. These proposals were accepted by the Board and embodied in a Five Year Corporate Plan. In addition, the Plan proposed a number of other initiatives aimed at improving the marketing and breeding of greyhounds. Requests were also directed at the Department of Agriculture and Food for extra funding. The Minister for Agriculture and Food approved the Five Year Plan and the Government made available £500,000 in 1990 and £750,000 in 1991 and 1992 and promises to provide the same amount again in 1993. Meanwhile, the Board has made considerable progress in implementing the DHS consultants’ recommendations.

5. CONCLUSIONS, STRATEGIES AND RECOMMENDATIONS

CONCLUSIONS

5.1The evidence submitted by Bord na gCon and by the other interest groups and individuals has led the Joint Committee to a number of basic conclusions about the Bord and the industry. The first of these relates to the fact that Bord na gCon was established by statute over 33 years ago. The legislation governing the Bord reflected the philosophy of public administration at that time. That philosophy included a belief in the efficacy of Government action through semi-state agencies, the importance of extensive legal and administrative powers to support the intervention and the appropriateness of cross-subsidisation as a method of finance i.e. the subsidisation of unprofitable but desirable activities by charges to profitable activities. All of these characteristics are strongly embedded in the Act and consequently in Bord na gCon. Today, a different philosophy is in the ascendant where competitive forces are given freer rein and state agencies operate in partnership with the private sector organisations with which they are concerned.

5.2From its original role in the area of control and development, the Bord has become involved in a major commercial activity. In fact, it is more accurate to speak of Bord na gCon nowadays as an entertainment business with a few administrative functions tacked on. But as the DHS report observes, the Bord did not adapt to its new role. Initially, the growth of attendances and associated revenues from racing masked any inadequacies in the structure of the Bord. But with the decline in attendances and revenues these inadequacies have been exposed. In part, because of the inflexibility of its governing legislation, the Bord is still structured for administrative functions. Indeed, the Bord still appears to itself as primarily an administrative entity.³

5.3The functions carried out by the Bord can be analysed into three separate categories: control; development of the industry; track management. The corporate cultures required for the effective discharge of these functions are different: indeed, they are incompatible. The control function is a semi-judicial function in which independence is a key requirement. But as the Bord has to exercise control over its own employees and tracks as well as the employees and tracks in the private sector, the appearance of independence is plainly lacking. So long as it appears to be judge and jury in its own case the Bord will always have a credibility problem. This is perhaps one of the reasons why, despite steps taken by the Board to strengthen control, there is still strong criticism.

5.4The requirement of independence also applies in the case of the development role where the Bord has to decide on the allocation of funds and prize money as between its own and private sector tracks. In addition, this role requires a blend of administrative and commercial skills somewhat different from those required of a regulatory and disciplinary body. Furthermore, there is a conflict of interest between a regulatory body, whose main concern must be the interests of patrons at the tracks, and a development body whose interest is the welfare of greyhound owners and breeders.

5.5The skills required for regulation and for development are different again to those required to discharge the third function: track management. As noted elsewhere, competition for the consumer’s entertainment pound has increased. Reference has already been made to the extension of evening racing by the Racing Board and the incursions made by satellite racing. A particularly serious aspect of this competition is that some of it is restrained only by statutes and regulations of one kind or another. This is the case with late opening of off-track bookmaking. In an era of deregulation and liberalisation, it would be unwise to pin hope of commercial survival on the continuation of old or the imposition of new legal restraints on competition. In fact the Joint Committee feels that it would be undesirable to attempt to blunt the impact of competition on the Bord by legal or administrative controls on other entertainment industries. It is true that greyhound racing is itself constrained from Sunday meetings by the 1958 Act. But in a general relaxation of restraints, access to Sunday racing by the Bord would be outweighed. Only the most highly developed commercial skills are likely to be successful in this environment.

5.6The Joint Committee accepts and acknowledges that in the last few years significant steps have been taken by the Board to reform itself. Previous paragraphs have listed the measures taken to strengthen control, to improve administrative efficiency, to rationalise the tracks and to refurbish plant and equipment. These are positive and commendable efforts. Perhaps, and if the problems were not so grave, a continuation of these measures would be enough. But the Joint Committee notes the extent of the backlog in refurbishing the tracks. The current plans submitted by the Board are for outlays of £3.5 million on Shelbourne Park. In addition, there is a requirement to invest something around £2 million at the provincial tracks. To this should be added something for the cost of upgrading the smaller tracks and the private tracks. Ongoing investment will be required in tote equipment and computerisation. Yet these investments will do little more than repair the neglect of previous decades. Moreover, in the entertainment business, refurbishment is required every three or four years. The creation of new services like the International Marketing Centre and the National Greyhound Stud will involve additional total outlays of about £2 million. Yet these are, in principle, highly desirable developments since they provide direct assistance to the breeding industry.

5.7In the meantime the Bord is not yet out of the financial wood. The break-even anticipated in the current year will come after most of the readily attainable economies have been implemented and considerable improvements have taken place in the tote and facilities. Meanwhile attendances are continuing to decline.

5.8The Joint Committee emphasises that the structure of the racing industry has been largely unchanged in the past thirty years. There are the same number of tracks now as there were 15 years ago when attendances were twice the level they are today. Only in an excessively rigidified industry would it be possible for a fall of 50% in business not to entail a drastic restructuring of the industrial structure. While not directing that a rationalisation of the tracks should take place, the Joint Committee believes that it is only realistic to recognise that this is likely to happen.

STRATEGIES

5.9In assessing the action which needs to be taken, the Joint Committee considered two alternative and sharply contrasting approaches. On the one hand, the Joint Committee could frame its recommendations on the basis of the existing legislation and the existing policies of Bord na gCon. Within this framework, many individual recommendations could be offered relating to the strengthening of the Bord’s efforts in the area of control and in the development of the industry. A greater role for the private sector in the operation of the tracks would be envisaged in this strategy.

5.10The other extreme would be to formulate recommendations aimed at returning control and direction of the industry to its constituent parts. The tracks could be assigned to private or community groups, perhaps under covenants restricting use to greyhound racing. The tote could likewise be disposed of to the tracks or to other interests. Control could be a matter for the breeders, bookmakers and track owners. The Minister for Agriculture and Food might retain some vestigial powers to ensure that racing was fair and competitive and step in if the industry failed to perform in this respect. But otherwise the industry would be self-financing and self-regulating. This is somewhat like the situation which prevails in the UK.

5.11The difficulty with the first alternative is that it does not seem to the Joint Committee that the current reforms will be enough by themselves to return the industry to health. The scale of change required is too great and the resources of the Bord are too limited. On the other hand, complete privatisation of the industry must be deemed too radical. In particular, it must be recalled that greyhound breeders and owners are essentially small scale operators and lack the managerial and financial resources to shoulder the burden of the industry. Certainly, proposals from the private sector to participate in the running of the larger tracks should be considered. Also, after the new structures which are proposed below have been in place for a few years, it might be possible to envisage a withdrawal of the State from involvement in the industry, should the State feel obliged for financial or other reasons to do so. But certainly, at this stage, the Joint Committee is not recommending complete and immediate privatisation.

RECOMMENDATIONS

5.12Therefore, the Joint Committee proposes a new strategy which involves a restructuring of the role of the public sector and substantial amendments to the 1958 Act. However, before detailing these proposals, the Joint Committee would like to make it clear that it endorses the many excellent and commendable reforms which are now underway and which are detailed in paragraph 4.5. The Board is urged to continue with them with as much speed as possible.

Control

5.13A new organisation for the control of greyhound racing should be established. This ‘Control Authority’ should be headed by seven persons appointed by the Minister of whom five would be selected on the basis of their knowledge and experience of the industry but in such a way as to ensure that the five are drawn from the main interests involved. There should also be two members drawn from outside the industry. They would serve in a part-time capacity. In general terms the Authority would have at its disposal all of the powers now provided by the Act to ensure that greyhound racing is fair and reasonable to all the interests concerned. The Authority itself would combine the functions now discharged by the Control Committee of Bord na gCon but, in addition, would be responsible for the recruitment and management of stewards. The assignment of the control function to an independent but broadly representative, single purpose agency, would help to reinforce confidence in the credibility of racing.

Greyhound Racing Tracks

5.14The Joint Committee’s concern about the strength of the commercial challenge facing the racing tracks as against the resources of the Bord has been detailed at length. This concern might lead to the conclusion that the tracks should be privatised. In fact, the Board, following the DHS recommendations, is in the process of disposing of the smaller tracks to private and/or community groups. However, the difficulties incurred in the disposal of the smaller tracks indicates that complete privatisation of all of the Bord’s tracks would be a difficult and a drawn out process. It is inevitable, therefore, that even if a policy of privatisation were to be adopted, the Bord would be involved in managing tracks for some time to come. It is desirable however, that the management of the tracks should be evolved as much as possible out from the day-to-day control of Bord na gCon.

5.15The Joint Committee, therefore, proposes that the Bord should form a single subsidiary into which all of its racing tracks should be combined. This track company would have its own Board of Directors, two or three members of which should be drawn from the existing Bord na gCon but with the addition of other members recruited for their commercial experience, preferably gained from some segment or other of the entertainment sector. This would introduce a more commercial orientation into the management of the tracks. Amongst other things, it would facilitate the development of ancillary commercial activities at the tracks, a policy which the Joint Committee feels could yield substantial benefits. The new structure would also be a considerable simplification on the present structure where the tracks report directly through the Chief Executive to the Board.

5.16Whether tracks ought to be disposed of is a matter which the Joint Committee believes ought to be left for the Track Company and Bord na gCon to decide on depending on commercial circumstances and the nature of any propositions received from private or community groups. In favour of disposing of these tracks to outside groups is the fact that, as the Board itself admits, being a public sector organisation, its tracks incur higher costs than the private tracks. It also acknowledges that private tracks are able to extract more realistic contributions from bookmakers. In general, the tracks in private ownership might encourage more realistic expectations amongst all sides of the industry, breeders and owners included, than seems to be the case when the industry is dominated by public ownership.

5.17Bord na gCon and the proposed Track Company should, therefore, be willing to consider propositions from the private sector for greater participation in the operation and/ or the ownership of the tracks, including the large tracks. Of course, the Board should not dispose of tracks unless it is satisfied that racing will continue and that the interests of all sides of the industry will be safeguarded. This qualification must itself be qualified however. There are likely to be some tracks which cannot realistically continue in either private or public hands.

Totes

5.18The totes have recently been modernised and staff numbers reduced. The result has been an encouraging improvement in profitability. However, the level of this profit is still very small by historical standards. As paragraph 3.25 noted, the decline in the revenues from the tote from 1980 until last year, is an indictment of the then management of the Bord. It may be the case, therefore, that the sale, or the franchising out of the totes to private or community groups, would be more financially rewarding to the Bord in the long run than direct ownership and control. However, the Joint Committee feels that until the impact of the recent improvements have been fully felt no decision on franchising or sale should be taken. The Joint Committee does recommend, however, that day-to-day management of the totes should be assigned to the Track Company which would thus group together all of the commercial activities of Bord na gCon.

Levy

5.19As paragraphs 3.26 and 3.27 indicate, the present levy system is uncertain in its impact and cumbersome and costly to administer. In fact, many of the smaller tracks receive back in the form of prize money all or most of what they contribute to the Bord in the form of the levy. The Joint Committee urges, therefore, that the Board should investigate alternative methods of collecting funds equal to that yielded by the levy.

Board Membership

5.20Traditionally, members of the Board have been strongly representative of the breeding side of the industry. Consistent with the recommendation in Paragraph 5.23, the statutory requirement that three members of the Board be drawn from the Executive Committee of the ICC should be dropped. Furthermore, considering the challenges confronting the industry, the Joint Committee believes that a wider range of experience should be available to the Board. It, therefore, recommends that the Act should be amended so that members of the Board should be chosen by the Minister to be representative of all sides of the industry i.e. breeders and owners, bookmakers and private track operators. It is essential also that room be found for three independent members who would be chosen for their general commercial expertise.

Functions of Bord na gCon

5.21The remainder of the functions now performed by Bord na gCon would be retained directly by the Bord. These include: arranging the racing calendar, attracting sponsorship, distributing prize money, promoting exports, encouraging education and training in the industry, distributing grants for the development of tracks and facilities. It would also continue to receive the proceeds of the levy or whatever arrangements are put in place pursuant to the recommendation in paragraph 5.19. It would not be empowered to support coursing.

5.22Under these arrangements, the Bord would be free to concentrate on the development aspects of the industry - aspects which have tended to be somewhat neglected. It would remain a powerful body and, with a board membership representative of all aspects of the industry and including outside members, it should be acceptable inside and outside the industry.

Relations with the ICC

5.23There should be no statutory relationship between Bord na gCon and the ICC. On the other hand, the suggestion made by some interests that the ICC’s function in regard to breeding be handed over to Bord na gCon is not endorsed by the Joint Committee. In fact, the ICC has a proven record in this field. However, the Joint Committee recommends that ICC revenue from greyhound registrations should not exceed what is necessary to fund the cost of maintaining the stud book. Furthermore, the Joint Committee recommends that the requirement that greyhound owners be members of coursing clubs should cease. In effect, the thrust of these proposals is that the ICC should become an independent self-regulating body.

Government Subvention

5.24The Board has requested on-going direct Government subvention arguing that it (and the Racing Board) are entitled to a share of the on-course betting levy. The Board’s proposal would have the effect of attracting an annual subvention of about £3 million per annum. This compares with £750,000 which the Board now receives and which is available only for capital purposes. Furthermore, there is no Government undertaking that it will continue beyond next year. The Board has also drawn the Joint Committee’s attention to the more favourable treatment which other bodies, especially the Racing Board, have received from the Department of Agriculture and Food over the years.

5.25The subventing of the Bord is a matter for the Government. But a consideration which has to be taken into account is the economic benefit to the community from aiding the greyhound industry. The Board claims that the greyhound industry is a substantial one (See Appendix I).

Unfortunately, firm statistical data to support this claim is not available. The only official statistic on the value of the industry is the CSO’s data on exports. These show that the value of greyhound exports is about £2.5 to £3 million per annum. At face value this is not a significant trade and would hardly justify any Government intervention in the industry. It is claimed, however, that these exports are systematically understated by persons within the industry and that the real value of exports is at least seven times the official one. Until this aspect of the industry’s operations is more transparent and a clearer view of the true value of exports emerges, the Government should not consider giving a subsidy.

5.26The Joint Committee is concerned at the large discrepancy between the official export figures and those estimated as being the real figures since it is possible that this indicates tax evasion. The Joint Committee feels that this is a matter which should be addressed by the Revenue Commissioners.

5.27The Board has argued that a proportion of the off-course betting levy is rightly attributable to the greyhound industry since it is wagered on it. (In the UK the entire yield from the off-course betting levy goes back to the horse and greyhound industries). But according to the off-course bookmakers, very few of their members will accept bets on Irish greyhound racing. Thus, it is not clear that the Board’s claim is well founded.

5.28The Joint Committee concludes its recommendations on subvention by urging that it is only prudent for both the Board and the industry in general to assume that in the present and foreseeable fiscal climate the Bord will have to rely on its own resources. In this regard the Joint Committee notes that some of the representations from interested bodies reflected their unrealistically high expectations of the capacity of the Bord and, by implication, the Government to meet their demands.

Regulation of Horse and Greyhound Racing Fixtures

5.29Bord na gCon has suggested that an authority should be set up by the Minister for Agriculture and Food to regulate the extent of evening horse racing. The Board points out that the extension of evening racing has impacted adversely on attendances at greyhound races which have traditionally been evening events. The Joint Committee considers, however, that it would be unwise to restrict competition as between the two industries. The Joint Committee does believe, on the other hand, that the greyhound industry suffers unnecessarily from the statutory ban on Sunday racing. It, therefore, recommends that this ban should be removed from the Act.

Relations with Bookmakers

5.30It is evident to the Joint Committee that relations between the Bord and bookmakers are unsatisfactory. The consequence is damage to the industry and to the Bord and the bookmakers themselves. The Joint Committee has recommended that bookmakers be more formally represented in the structures of the industry and it is also proposing a more commercial orientation for the tracks. The Joint Committee feels that the bookmakers ought to accept a code of practice along the lines proposed by the Board and in force, it is understood, in Australia. The Joint Committee recommends that implementation of this code of practice should be assigned to the Control Authority. Likewise, the Joint Committee recommends that bookmakers’ pitch fees ought to be a matter for free negotiation as between the tracks and the bookmakers and not be constrained, as at present, by the 1958 Act.

Other Recommendations

5.31The Joint Committee concludes with a number of other recommendations about different aspects of the Bord’s performance:

(1)Recruitment: The Joint Committee notes with approval the decision of the Board to recruit a manager for its Dublin stadia from outside the Bord. The Joint Committee recommends that in future all senior appointments in the Bord should be publicly advertised. This will ensure that the Bord has access to the widest available talent.

(2)Admission Fees: The Joint Committee notes that almost one in three attendees at greyhound races are admitted free. The Joint Committee would question the rationale of this policy in the context of the poor financial condition of the industry and recommends that the Board review its policy accordingly.

(3)International Marketing Centre: The Joint Committee notes that the Board has received Departmental approval for the development of an International Marketing Centre. The Joint Committee endorses this initiative in principle but cautions that the activity should only be proceeded with if it has a high chance of commercial success: the Bord is certainly not in a position to incur additional obligations.

(4)Credit Betting: The statutory ban on credit betting on greyhound races should be removed; it has been abolished in respect of horse racing.

10th June, 1992.

¹ Report of the Advisory Committee on the Greyhound Industry (Prl 1341) Government Publications. Dublin 1952.

² Policy and Operations Review of Bórd na gCon. August 1989. Deloitte Haskins & Sells.

* In constant 1980 prices

* Minor differences are due to rounding.

3 “The fact that Bord na gCon is primarily a Regulatory and Disciplinary Body ...” Page 3, Final Submission to the Joint Committee. Bord na gCon. December, 1991.