Inside the world of business
Timing could be lucky for bookies
PADDY POWER’S announcement yesterday that it plans to create 500 jobs at its Dublin HQ comes at an interesting time. The jobs, part of 1,440 positions that the quoted bookmaker announced for its Irish, Australian and British operations, are in areas such as risk management, technology, software and web development.
In short, they’re in the smart economy, something the Government is keen to promote. The announcement has come just three weeks shy of a budget, which could propose changes to the current betting tax regime, which takes 1 per cent of all bets placed in bookie shops, but which does not apply to wagers placed over the internet or telephone.
State funding for horse and dog racing was tied to gambling, and Horseracing Ireland (HRI) wants the rate doubled to 2 per cent and extended to internet and telephone betting.
Paddy Power says it is not against a tax on internet betting, once its non-Irish competitors, many of whom are based in low-tax jurisdictions, also pay it. The company has warned that if such a tax were to place it at a disadvantage, it could force the company to move its internet operations offshore.
A jobs announcement on the scale of yesterday’s, backed up by the news that it needs 86 people straight away, is going to make the Government wary of doing anything that is likely to damage its prospects.
With similarly good timing, a report commissioned by the racing and breeding industries, and written by high-profile economist Colm McCarthy, shows these activities generate €1.1 billion a-year for the economy, and employ 14,000 people.
Their case is that a tax that delivers a slice of the betting revenue which racing helps to generate is justified given this scale, and they point out that in most other competing jurisdictions, gambling funds the sport.
Bookmakers and racing have been rowing over this issue for some time. Either way, the Government won’t want to hurt two successful industries and any compromise it comes up with could do just that. Perhaps the best way around this would be ask both sides to see if they can find some common ground.
Greencore boss repays board' confidence
FOR GREENCORE boss Patrick Coveney, yesterday must have been personally satisfying in a number of different ways.
The Corkman will lead a business with turnover of £1.7 billion, and 17,000 employees, having engineered a deal that provides Greencore with scale and substantial growth potential. This will no doubt boost his remuneration and his reputation in the corporate world.
But for Coveney it’s a vindication of sorts of his abilities, following the revelation two years ago of a €12 million major fraud at the company’s water business in Scotland.
That incident happened on Coveney’s watch as chief financial officer and was hugely embarrassing to him, given that the revelation emerged not long after he had taken the reins from David Dilger.
Luckily for Coveney, his board stood four-square behind him. In an interview with The Irish Times 12 months ago, Coveney said he never considered resigning. “While I was responsible for it happening, I also thought I was pretty well equipped to actually fix it, and that’s what I got on with.”
It was a politician’s answer from the son of a TD.
Coveney can now enjoy his day in the sun. Barring an unexpected hiccup, this recommended offer should be completed by the end of March 2011.
By then, his brother Simon could be a minister in a Fine Gael-Labour coalition. When their father Hugh Coveney died in 1998, Fine Gael was keen on Patrick filling his shoes.
But Simon wanted the gig and Patrick was happy to support him. On reflection, it was quite a break.
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