Hong Kong Jockey Club (HKJC) has reported record wagering and lottery turnover of HK$331.7bn (£31.3bn) for the 12 months to the end of June, representing a 3.6% increase year on year (YoY), despite operating in what was described as “a challenging and fast-paced environment”.
The club pointed to having to compete with a “huge and growing illegal gambling market”, the ongoing impact of special football betting duty of HK$2.4bn per year and the “unexpected pause” by the government in granting a licence to offer regulated basketball betting.
Management said the financial performance was “strong” and that HK$39.3bn was contributed to the community.
HKJC contributed HK$29.3bn in betting duty and profits tax, which equated to 6.4% of the taxes collected by the Inland Revenue Department in the Special Administrative Region of China.
Breaking performance down by vertical, horseracing turnover grew 3.6% YoY to HK$143.4m, with commingling of international racing pools the “major driver” of the rise.
Commingling of Hong Kong racing pools involved 26 countries and jurisdictions, a 9% YoY increase to HK$34.3bn, accounting for 23.9% of total racing wagering turnover. Revenue amounted to HK$19.9bn.
The football betting arm saw turnover also rise 3.6% YoY, to HK$179bn, with HKJC praising the government for allowing for new bet types and how these were “crucial” for competing against the black market. The World Cup was also a reason cited for increased turnover.
Meanwhile, Mark Six lottery turnover rose 4.2% YoY to HK$9.4m in what was its 50th anniversary year.
Commenting on product development, management said it has invested in technology, which includes the customer’s digital experience and a sports betting platform.
The platform was meant to be rolled out with basketball betting, but the launch was put on hold due to the growth of prediction markets and has now “pivoted” to football betting.
On the growth of the black market, management said: “Firstly, Hong Kong’s high rate of betting duty is eroding the competitiveness of the club’s licensed wagering products. Betting duty on racing is up to 75%, while football betting is taxed at 50% of gross margin.
“Secondly, Hong Kong offers just two sports for licensed betting – racing and football – compared with up to 60 for illegal operators, including illegal betting on basketball.”
On the decision to pause the basketball licence, HKJC added it “fully respects” the government’s decision but “with no legal channel available, the illegal market on basketball will continue to expand and along with it the social and criminal damage to the community”.
HKJC noted it is also reducing operating costs to improve agility and “cost-efficiency” in the way it works.
Following the conclusion of its AGM on 2 September, Kenneth Fok Kai Kong was elected as a steward to the board of stewards on a one-year term, while Bernard Charnwut Chan, Anita Fung Yuen Mei and Philip K W Lo were re-elected on three-year terms.
Winfried Engelbrecht-Bresges, HKJC CEO, said: “Despite having to operate in a most challenging and fast-changing environment, thanks to the success and agile implementation of our long-term strategies we achieved outstanding results both on and off the track.”
Martin Liao, HKJC chair, added: “Our licensed and regulated football betting service also achieved gratifying results.
“Above all despite a very difficult environment, including the ever-expanding threat of illegal gambling, the club maintained its strong support for the community and for the charities that depend upon us.”
In June, HKJC named former UK Tote Group chief commercial officer Jon Knapman as its new head of commingling.
The post HKJC hits new highs for wagering and lottery despite “huge and growing” black market first appeared on EGR Intel.
Both racing and football betting turnover increased 3.6% YoY, while the Mark Six lottery rose 4.2% in what was the numbers game’s 50th anniversary year
The post HKJC hits new highs for wagering and lottery despite “huge and growing” black market first appeared on EGR Intel.