Niamh O'Sullivan from the School of Business examines the history of bookmaking in Irish Horseracing and asks where did the idea of betting on horses come from?

    In 2016, the racing public bet approximately £150 million on races at the famous Cheltenham Festival demonstrating the continued popularity of the sport of kings on these islands. The history and development of horse racing and bookmaking is closely interwoven leading to an often-tumultuous relationship between the two. 

    Similarly, each has had its share of colourful characters and troubled fortunes over the centuries. Historical manuscripts tell of chariot racing taking place on the Curragh as early as the 3rd century AD, though organised horse racing in both England and Ireland was to come much later. 

    Initially horse racing and betting was the preserve of the aristocracy and the landed gentry. It involved only the horse owners, who bet with each other on the outcome of private races known as Matches. Such races were common in the 16th and 17th century and their purpose was to discover who had the fastest horse, with victory leading to the establishment of bragging rights. 

    Inevitably, society began to experience the negative consequences of gambling on such a large scale, coupled with the availability of alcohol on the same premises

    The relatives and friends of the owners watched and bet on these two-horse affairs, normally held on private land. However, horse racing became much more organised and fiercely competitive in the 17th century, when King Charles II, a huge racing enthusiast, endowed Royal Plates in order to encourage the improved breeding of racehorses. Gradually, these match races become more ambitious and sophisticated with huge crowds attending and significant amounts being gambled.

    The first promotors of horse racing were innkeepers and publicans who encouraged owners to hold their match races near their establishments. They became the first sponsors of flat racing and the first bookmakers. They were also the first to realise the huge potential of "steeplechases", a form of racing first created in Ireland where the riders would race from one church steeple to the next jumping everything in their path! An innovation in 1826 at St. Albans in England saw the horses starting and finishing in the same place, an innovation still in place today at modern racecourses.

    At this time, betting was still unregulated with betting on racing operating on a credit system. As the popularity of horse racing increased, betting levels soared. Inevitably, society began to experience the negative consequences of gambling on such a large scale, coupled with the availability of alcohol on the same premises. Consequently, the government of the day banned gaming in public houses, giving rise to the opening of betting shops by bookmakers. 

    This decision greatly reduced funding and sponsorship levels in racing until expanding rail companies took the place of the innkeepers and publicans. They saw an opportunity to promote rail travel by offering services to and from the races and this led to the establishment of many racecourses close to railway lines

    Racing has taken place in approximately 409 separate locations in Ireland since 1751. Baldoyle races in Sutton, Co Dublin was the first of such "Park courses" with gate money collected in return for the facilities offered. It was here that the term "betting ring" first originated. This came about because of the practise of the bookmakers to wait for the result of each race in front of the judge’s box and they would then proceed to assembly in a circle and settle all bets. 

    Major milestones in the history of betting included the development of laying as many horses as possible in the same race, the introduction of cash betting and the offer of fixed odds against each horse in a race. This on-course model of betting soon made its way to the High Street. Once again, betting thrived, but it was felt by many that much of the growing social deprivation of the day was linked to the growth of betting. Parliament passed the Gambling Act in 1845 followed by the Suppression of Betting Houses Act in 1853.  Credit houses and on-course gambling was permitted, but cash betting on the streets still regularly took place.

    The Street Betting Act of 1906 officially banned cash betting, but it was poorly enforced. It would be some twenty years later before licensed off-course betting shops were to appear. They were licensed by the Irish Free State Government in 1926 to raise much needed revenue from the duty of five percent on turnover. It took our British counterparts longer to shake off their concerns about the possible negative social consequences of betting and establish the equivalent in the UK in 1961. In 1929, the Irish Government passed the Totaliser Act, but it would be some time before the Tote would become a net contributor to Irish horse racing

    In 1945, the Government established the Racing Board to improve horse breeding and racing and their remit also included the financing of racing from levies received from betting. The Irish Horse Racing Authority replaced the Racing Board in 1994 and a semi state body called Horse Racing Ireland (HRI) was set up in 2001 to continue the development of the sector.

    A key issue for many within the racing sector in the 1990s was that off-course betting operators were using the product of horse racing without making any return to the industry. The passing of the Horse & Greyhound Racing Act of 2001 changed the regulation of horse racing and ensured a significantly increased and guaranteed amount to the sector each year. It also enabled the establishment of HRI as a single governing body for the horse racing sector.

    In the intervening years, the landscape of betting in Ireland has changed fundamentally. We have witnessed the highs and lows associated with the rise and fall of the Celtic Tiger in the racing and betting sectors. We have seen the consolidation of many High Street betting shops to a number of dominant chains, and the impact of aggressive competition from offshore and online operators who initially did not contribute to Irish racing. This competition was keenly felt by the smaller, independent high street betting shops and the on- course bookmaker. Licensed betting offices still represent the largest source of betting on racing in Ireland, but numbers have fallen considerably from 1,385 in 2008 to around 850 in 2016 with an increasing move to online betting. 

    A particular grievance for many within the sector is that the current betting levy of one percent is on turnover in a sector which they argue is characterised by high costs, tight margins and intense competition. They also note that Irish horse racing is now only responsible for about only 12 to 14 percent of retail betting shop turnover. Similarly, turnover levels for on-course betting have declined very significantly in the last decade from a high of €282 million in 2007 to approximately €169 million in 2016. In particular, on-course bookmakers have lost a huge share of the betting market in that period. 

    The dilemma for HRI in the last decade was how to capture a return from remote and o line betting operators. The passing of the Betting Amendment Bill of 2015 ensured that all operators using the Irish racing product made a return to the sector and aimed to create a more level playing field among the different operators. The question being asked by HRI and many within the racehorse sector now is if the current rate of return from betting should be increased. So far, the government have shown no inclination to change the betting tax in this country. But should a change occur, it would seem likely that an oft-tumultuous relationship may become even more so. 

    This piece originally appeared on RTÉ Brainstorm.