Increases in betting duty announced by finance minister Brian Lenihan in October’s budget may have ended concerns over European scrutiny of subsidies to Irish Racing, but the governing bodies of horse and greyhound racing in Ireland have nevertheless been forced to announce sweeping budget cuts in response to a 9 percent reduction in the Horse and Greyhound Racing Fund.

Statistics released yesterday showed that betting activity in the Irish horse racing industry shrank in 2008 for the first time in more than 15 years, with horse sales also collapsing, prompting the boss of the sport’s governing body to demand the imposition of taxation on offshore betting activity.

The announcement of a major consultation process to discuss possible reform of Irish gambling laws has been accompanied by news that funding negotiations between Betfair and Irish racing broke down after the betting exchange refused to double its contributions to the sector.

Ireland’s betting industry could afford a sigh of relief on Wednesday after what had been described as the toughest budget in living memory passed them by leaving betting duty fixed at 1 percent, but the sports on which betting depends were not so fortunate.

The Irish online sports betting market has been valued by accountants PricewaterhouseCoopers at €797m, a figure significantly lower than the one quoted by Horse Racing Ireland in its campaign to fund the sport through a tax on bets struck in Ireland with online operators.

The betting levy in Ireland should be raised to 1.5 percent and imposed on all remote operators who offer gaming to Irish residents, the Labour Party said yesterday.

Whilst most European jurisdictions have adopted modern regulatory structures for gaming, the industry in Ireland remains regulated by antiquated laws such as the Betting Act 1931 and the Gaming and Lotteries Act 1956.

As dust begins to gather on the report of the Irish Government’s casino review committee, international experts have warned that Ireland should not dither in implementing the committee’s recommendations via concrete legislative reform. However, weighing hard on politicians are concerns about how regulatory change will affect the Irish racing industry.

The Irish bookmaking industry yesterday saw its applicable gaming tax rate doubled in a move that will cost the industry an estimated €40m a year as bookies remain unable to pass on any tax to their customers. The Irish Government’s dramatic move has prompted speculation on comparable betting tax increases across the Irish Sea.

Ireland is facing the biggest overhaul of its gambling regulations in over fifty years, but significant changes are on hold until the electioneering is done.