The most popular form of win and each-way wagering in Ireland and the UK is not pari-mutuel, but fixed odds wagering. The bookmaker sets a price he or she is willing to pay on winning wagers and the price you get could be vastly different from the price that I get. This is unlike pari-mutuel wagering where all the winners are paid out equally. But, this isn't the only difference, the bookmaker contributes next to nothing to the racing industry. The takeout from the pari-mutuel pool funds purses, provides revenue for racecourse improvements, allows for advertising and promotions, and generally improves the quality of racing for horsepeople, owners, and racing enthusiasts.
Bookmakers operating in the UK are taxed at a rate of 10% of profits....in excess of 500,000 pounds, not of the total amount of wagers they process. Irish taxing of bookmakers is a bit more complex. There is a 1% tax on turnover (total handle) in betting shops and phone wagering, 0.25% tax of similar upon racecourse bookmakers and 15% tax upon profits on exchange wagering.
Compare those rates to those paid by Totepool in the UK (run by Betfred) and The Tote in Ireland. The Totepool tax on win wagering is 19.25% and increases to 20% for place wagering. The Tote in Ireland taxes win wagers at 20% and place wagers at 25%. The most popular Tote across Europe, by far, is France's Pari-Mutuel Urbain, better known as the PMU, where bookmaking is illegal. Win and place wagering is taxed at a rate of 15.05%, but takeout can be set at lower rates when large amounts of money are flowing through a single entity rather than through a hodgepodge of betting shops, on-course bookmakers and betting exchanges. A random trotting race from Vincennes on a weekday afternoon generates a handle above one million Euro.
I noticed a recent tweet by someone associated with the UK racing industry. The tweet was accompanied by a picture of French punters queued up at Lonchamp waiting to place wagers on automated tote machines. The tweeter was lamenting that UK racing would never want to go in this direction because the "colour" and "excitement" of the betting ring would be lost. What? I've never been to a UK course but I have been to five courses in Ireland. Colour is probably the last word I would use to describe the betting ring which, from what I have seen, is full of old men standing on boxes shouting "TWO MINUTES TO FAIRYHOUSE" or women in low-cut shirts and push-up bras trying to entice some out-of-his-luck punter toward her business. I would used adjectives more like "antiquated", "smarmy" or "unnecessary" to describe the betting ring. I have also poked my nose in a few betting shops and upon first look did an about face and placed my wagers over the mobile.
Where is the difference in all of these taxing schemes most obvious to the punter? Purses. Take a look at the average purses for even a provincial course in France and it dwarfs those in Ireland and the UK. It is astonishing that world-class talent like Ryan Moore and Will Buick are risking injury riding in maiden races for 6,000 pound purses which are easily 5x - 10x less than those offered at the Parisian courses. I will not even broach the topic of purses at American courses where maidens routinely run for $50,000 to $100,000 at top-tier courses. Increased purses are the building block of the highest quality racing: they attract better owners, better horses, better trainers, larger fields, and better payoffs. Imagine if all of the wagering in Ireland and the UK were funneled through a single entity with a takeout similar to the PMU? What would the purses be? What improvements would be made to courses (have you seen those courses in France)? It's the 21st century and time for racing to move quickly into that direction.
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