Inside Asian Gaming

INSIDE ASIAN GAMING | August 2010 22 Soccer Betting H ong Kong’s leading English-language daily newspaper, South China Morning Post , called in mid-July for a ‘debate’ on ending the legal betting monopoly enjoyed in Hong Kong by the Hong Kong Jockey Club (HKJC). The paper says it’s necessary because the current system regulating legal betting in the city isn’t working. The SCMP cites as an example the record seizures of cash generated by unauthorised soccer betting syndicates in Hong Kong and across the border in mainland China during this year’s FIFAWorld Cup in South Africa. The SCMP suggests this is because the HKJC’s soccer betting offer isn’t appealing enough to punters. It says the debate should include the possibility of licensing private gaming franchises within Hong Kong. That would potentially be a revolutionary change from the system in place since 1952, when the custodians of Hong Kong’s horse racing club came up with a novel way to raise tax in order to house a million Chinese immigrants fleeing the mainland following the victory of Mao Zedong’s communist party in China’s civil war. Focusing the debate on present needs, the SCMP states: “Other jurisdictions have got around the dilemma by licensing private gaming franchises, bringing them under regulatory control and into the tax net. Illegal operators are either crowded out of the market or have to accept a smaller market share. In a perfect world, the Jockey Club model might well socialise all gambling. In the real world, the community should have a serious debate about it.” Wrong fix? The SCMP ’s instincts in calling for an end to HKJC’s monopoly are impeccably capitalistic in the tradition of the Shanghai entrepreneurs who fled to Hong Kong after the communist government took power in China in 1949. The paper may, however, be missing some of the bigger picture. HKJChasactuallybeenasproactiveasthe government will allow it to be in expanding its gaming offer in the face of dwindling interest in horse racing among the younger generation. Its annual report for the year ended 30th June 2009 shows that HKJC’s turnover from soccer betting has risen more than tenfold since it first introduced the product range in 2003. In the 2003-04 results, soccer betting generated HK$3.3 billion (US$420 million at current exchange rates) in pre-tax revenue for HKJC. In 2008-09, it brought in HK$35.1 billion (US$4.52 billion). That’s not bad from a single betting product stream targeted at a purely domestic market of around 5.5 million adults. It compares Referee! Taking the commercial shackles off the Hong Kong Jockey Club is the best way of tackling unlicensed soccer betting in Hong Kong