The Nicosia Race Club (NRC) is up in arms over a proposal by the cash-strapped Ayios Dhometios Municipality to increase tax on horse betting in order to help repair damage caused by the economic crisis.
Reportedly, the municipality which receives a steady stream of revenue from the NRC is suggesting that taxation on horse racing bets is increased from 1% to 1.5%.
General Manager of the NRC George Hadjiminas warned that the increase will translate into further annual losses which the track cannot cope with after enduring years of cutbacks including staff downsizing and wage reductions.
"The NRC is essentially a non-profit organisation. We only generate funds through betting and everything that is made goes back to supporting the horse racing industry in Cyprus."
According to Hadjiminas, the NRC in early 2010 began to suffer huge financial losses as the recession kicked in and interest in sport betting on the island began to dwindle.
"In 2010 we suffered losses of €2.2 million followed by €3.2m in 2011, €1.9m in 2012, and €900,000 in 2013."
He added that based on financial predictions for 2014, losses are expected to be within the region of €140,000, however, the NRC has made considerable financial investments in recent years, which it is still paying off, to help the business grow and generate future income.
"In 2011, when we realised the financial crisis was only going to get worse, we enforced pay cuts and made redundancies but still suffered huge losses."
The manager reminded that the club employs 60 riders, 130 betting representatives and other staff for the track and cafeterias while vets and horse breeders also receive income from the NRC which indirectly helps support some 1,000 local families.
"In other parts of the world, businesses that bring revenue to municipalities are supported financially and not further burdened with taxes during times of economic crisis. If we were a profitable organisation and did not have to enforce cutbacks or deal with such expenses it would be justified but not in the current climate."
Ayios Dhometios Mayor Costas Petrou confirmed last week the municipality is nearly bankrupt and can no longer pay the wages of its 75 employees.
"Our revenues have been decreased to the point where we cannot afford to pay wages. Unfortunately because of the situation we may need to let people go soon."
The mayor added that despite the austerity measures, there have not yet been any redundancies.
Ayios Dhometios' main source of revenue is state funding and a percentage on bets from the island's only race course which amounts to around €1.1m annually.