FAI supports funding plans relying on betting levy increase

A new project to modernise the infrastructure of Irish football over the next 15 years has been backed by senior executives at the Football Association of Ireland (FAI). The project, which will see about €60m a year invested in football, relies largely on funding from the Irish government, and has attracted a lot of debate in both policy-making and sports circles. Attending at a press conference at Abbotstown, FAI’s Chair Roy Barrett and CEO Jonathan Hill discussed their view of the future of football in the country and how the sport could avoid the funding crisis in the years leading to 2019. In presenting the project, however, Barrett and Hill have proposed a change that could have serious consequences for Irish betting sites and other betting and gaming providers.

A crucial point of the plan is the increase of the existing levy imposed on betting sites and other betting and gaming providers from 2% to 3%, and using the extra income to fund football. Currently, the levy is paid by the horse- and greyhound-racing industry, where regulated betting sites and bookmakers pay a percentage of their profits for the improvement of the sport. Barrett and Hill are proposing that the Government increases the levy and gives some of the funds to football. A controversial proposal which is not likely to go down well with the companies behind betting sites, nor with the racing industry, this is likely to provide a source for the share of funding for which the Government would be responsible should the new project is given the go-ahead.

The project itself relies on a total investment of €863m over 15 years. The ambitious proposal suggest that 60% of the funds will be the responsibility of the Irish Government, 20% coming from profits from the sport itself, and the last 20% being generated from “local projects”. Barrett and Hill are suggesting that the money will fund over 2,500 new projects over the course of the years, with €426m being given to grassroot clubs, €47m being invested in improving the national team, and the outstanding €390m funding improvements across the League of Ireland.

Speaking about the new infrastructure project and the increase of the levy on betting sites, Hill said:

“What happened prior to 2019 will never happen again. […] We have started discussions already with the Department of Sport and Sport Ireland. They have been very positive. They are supportive of any proposal that brings the wider debate of funding sport to the table. I personally see the levy situation as a good example of government actually delivering a stimulus to a sport and not seeing it as a subsidy. I do see the opportunity for the government to replicate what it has done for horse racing, which is clearly a very successful sport and industry now, for football moving forward.”

As a reminder, under its previous management the FAI experienced a number of issues with the management of its funding, which ultimately resulted in it being suspended until the issues were identified and resolved. In 2017, the Association brought in a revenue of €49m and generated a retained surplus of €2.8m. In 2019, however, the picture was different. By the beginning of April 2019, the FAI had already spent over a half of the budget allocated to it by the Government – €2.7m. As a result, the Association found itself in a dire need of funding, sourcing a short-term loan of €100,000 provided to it by former Chief Executive John Delaney. And while the loan was paid off in full in 2 months, questions were asked about the inability of the Association to manage its funding and to operate within it, and it was noted with concern that Sport Ireland had not been notified about the loan.

Barrett also spoke in support of the new infrastructure project:

“[…] if you look over the last 20 years […] the reality is as sport and a leading sport, football was grossly underinvested in compared to the other main sports. We ask on behalf of the football community, here is a plan and what it will take to give people the necessary facilities for them against the backdrop for a generation there hasn’t been sufficient investment in football compared to any other leading sport. Those are the facts. […] It makes sense in any economy, when you have surpluses like that, to spend a chunk of it on improving infrastructure.”

It remains to be seen how official discussion in relation to the new project will go. Previous suggestions by the FAI to increase the levy were not met enthusiastically by the Government, with Taoiseach Leo Varadkar being especially critical of pitching sports against each other. One aspect of funding that is not clear yet however is whether the levy increase affecting betting sites and bookmakers will be extended to cover other sports as part of the new proposal, or if it would be limited to the racing industry again. However, for Barrett, who is due to leave FAI by the end of the year, the project may be his last chance to revolutionise football in Ireland. With FAI having released the detailed proposal and explained the rationale behind it, the ball is now in the Government’s field. Betfree.ie will follow the topic with interest and report any news on our blog.

Please see more of Hill and Barrett’s statements below.

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Hill:

“What happened prior to 2019 will never happen again. This is a new debate and conversation we’re going to have with government. We have started discussions already with the Department of Sport and Sport Ireland. They have been very positive. They are supportive of any proposal that brings the wider debate of funding sport to the table. “

Hill on the levy:

“I personally see the levy situation as a good example of government actually delivering a stimulus to a sport and not seeing it as a subsidy. I do see the opportunity for the government to replicate what it has done for horse racing, which is clearly a very successful sport and industry now, for football moving forward.”

Barrett:

“We can’t attest to what happened under the last management infrastructures, all we know is it imploded around 2019. At the time I absolutely believe it was the right thing for government to step in and stabilise the organisation. They placed a lot of trust in the management and the board to do that and help the game grow against the backdrop where they absolutely recognised the relative importance of football in this country and what it could be.

“But if you look over the last 20 years and however things were managed and whatever the perceptions were, the reality is as sport and a leading sport, football was grossly underinvested in compared to the other main sports. We ask on behalf of the football community, here is a plan and what it will take to give people the necessary facilities for them against the backdrop for a generation there hasn’t been sufficient investment in football compared to any other leading sport. Those are the facts. Any government funding for anything, particularly sport, is going to be emotional. People will have an emotive view, whichever sport they are from. What we have sought to do over the last 18 months is to take the emotion out of it and say, ‘the facilities are poor’.

“It makes sense in any economy, when you have surpluses like that, to spend a chunk of it on improving infrastructure. We have lots of needs in this society, with the housing crisis, the housing needs, but we also have a sporting infrastructure deficit. I do believe putting money into facilities now to cater for current needs and growing needs that will be there over the next 20 years is the prudent thing to do. We have a sport which has been chronically under invested for a long period of time. If that underinvestment continues we will have all sorts of problems given the growth of the sport, the relative size of the sport, and the changing demographics would indicate that the demand for football and football facilities will get bigger and bigger and bigger. Against that background are we confident we will get funding? I am certainly confident that we should get funding. We believe we have a good case.”

On pitching sports against each other:

“We have not been critical of any sport. When you look at something like the betting tax we tried to take the fact based approach to a funding stream that has been there for the last 22 years for two other sports. Rather than being emotive about this, let’s look at this and see why it happened and how it happened. The reality is, for those two sports, €1.6 billion has been put into those sports as investment. I think it is an absolutely reasonable question to ask – if the original basis of the legislation was one thing, and if you applied it today then football and other sports should benefit from it. What we would suggest is an increase of the betting levy from two to three per cent so other sports, including football could benefit from an increased yield from betting levies. We are not trying to pit ourselves against other sports or say we should be taking off them. The most reasonable option is not to take away from existing sports, as there is clearly a dependence on it, but to increase the yield from the levy. So increase the levy.”

On the impact of the levy on betting sites and bookmakers:

“That has been a constant refrain every time there has been a change in the betting levy. I see Horse Racing Ireland has called for an increase in the levy as well. I don’t believe that that issue should dwarf the significant benefit that can accrue for society more generally if increased yields from gambling are put to proper use, and good use, which in this context is more facilities for more sports, which would benefit more people.”