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Hong Kong Jockey Club

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Submitted By sangiovese96
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Betting turnover on horse racing has been steadily declining in Hong Kong since the peak 1996/1997 season. While gambling is a very common activity in Hong Kong, several external factors threaten the annual racing revenue. These include the proliferation of illegal and offshore bookmaking, the government’s betting duty structure, and increasing international competition.
The Hong Kong Jockey Club (HKJC) was granted a statutory monopoly on horse racing, football (soccer) betting, and lotteries. It is also the largest single taxpayer in Hong Kong, the largest employer, and has some of the most sophisticated information technology applications in Asia. HKJC hopes to continue to increase revenue through meeting the expectations of its stakeholders, including the betting public, lottery players and Club members.
While horse racing is HKJC’s core business, it is also a mature market in which the Club has observed an eight-year decline in revenue. This is believed to be impacted by the turnover-based duty system and the growing number of local illegal and offshore gambling options. In 2005 the HKJC proposed reforms to Hong Kong’s betting duty system to tax on gross margins rather than turnover. By Club estimates, this would enable it to recover HK$20 billion to HK$24 billion a year by making it more price-competitive with the illegal bookmakers, bringing the annual racing revenue to approximately HK$88 billion. Moreover, it estimates that if no action is taken the racing turnover could fall another 30% to HK$45 billion in 2008.
Despite the decline in horse racing turnover, the 2004/2005 fiscal year was even more successful overall than the previous peak in horse race betting in 1995/1996, by HK$3.6 billion. This is attributed to the newly introduced football betting in 2003, which saw a 66% year over year growth in its second season offered by the Club.
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