Hong Kong needs a broader perspective on developing gambling industry

During the public consultation for the 2023-24 Budget, Executive Council convener Regina Ip Lau Suk-yee proposed raising the football betting duty from 50 percent to 80 percent, noting that it would generate additional revenue for the city’s coffers. 

Such proposals for a higher betting duty on the Hong Kong Jockey Club (HKJC) are well-intentioned but could have missed a broader perspective on the HKJC’s potential for creating much greater value for the community. As some Asian cities, such as Macao, Singapore, Manila and Kuala Lumpur, are tapping into the betting business, Hong Kong ought to speculate on the growth model for the local gambling industry.

How could Hong Kong leverage the HKJC’s resources to create more economic value for society? As its business expands, the revenue growth will be converted into resources to support local charities and drive social change, and eventually benefit society and residents. The HKJC should reposition itself after conducting research regarding the gambling business, and seek to maximize its contribution to society. So the focus should not be placed on the betting duty but on maximizing the HKJC’s potential to benefit society and the value of the whole gambling sector.

Since the British-ruled period, the HKJC has not only been running a betting business, it has also been the city’s top charity donor, funding arts, culture and heritage-related activities; education and training; elderly services; emergency and poverty relief activities; environmental protection; family services; medical and health; rehabilitation services; sports and recreation; and youth development. Its patronage usually comes as financial funding or in the form of hardware infrastructure. However, scarcely has patronage gone to skill building. One of the biggest challenges Hong Kong faces is to devise a plan for long-term talent development. Despite the abundance of hardware facilities, the status quo is not ideal for developing talents, leaders and a capable workforce. What should the HKJC do to maximize the value of all its readily available resources? How could the game be stepped up through the betterment of the team? Instead of merely talking the talk in work reports, the HKJC must walk the walk by looking into and assessing the matter.

Since its establishment in 1884, the HKJC has always been one of the largest non-governmental employers, with over 26,000 full-time and part-time employees. Authorized by the Hong Kong Special Administrative Region government, it is the city’s only legal and regulated gambling operator, providing horse racing and football betting services as well as the Mark Six lottery. The HKJC is governed by the regulatory regime set out in the licensing conditions and the Gambling Ordinance. The responsibility for its implementation lies with the Home and Youth Affairs Bureau, which constantly looks to the Betting and Lotteries Commission in formulating the gambling policy. The social role the HKJC plays has not undergone great changes since the 1997 handover. In the coming decade, what role will the HKJC play?

The primary legislation governing gambling activities in Hong Kong is the Gambling Ordinance (Cap 148) and the Betting Duty Ordinance (Cap 108). Given the fact that the Gambling Ordinance was drafted in the 1970s, it obviously could not serve the purpose of combating illegal football betting operated with the aid of offshore bookmakers. Therefore, the Gambling (Amendment) Bill was passed in 2002. Moreover, a bill was passed in 2003 to amend the Betting Duty Ordinance, which became the tool to authorize and regulate football betting. The government then granted the HKJC the license to take bets on all football matches.

As more and more novel practices emerge in the world’s betting business to displace the old framework, the government should conduct research regularly and update all relevant policies and the regulatory regime in order to thwart any illegal betting activities and prevent any money that may be plowed back into society from being syphoned off the government.

Some novel sports, such as rapidly developed electronic sports (esports), are games played electronically in a competitive setting structured into all sorts of esports leagues and tournaments. Today, Japan and South Korea are spearheading the development of esports in Asia. In the 2017-18 Budget, the government made it clear that esports are a new arena that could potentially drive economic growth. The HKJC should seriously consider investing in esports locally and study what other new, wholesome sports games could be introduced to expand the local betting market.

The government should also look into gambling in Macao. How could Hong Kong create more synergy in working with Macao? Financial Secretary Paul Chan Mo-po should participate in relevant research. With multiple gambling companies having been listed in Hong Kong, the government should concern itself with how to upgrade the entire gambling industry.

In fiscal year 2021-22, the HKJC reported it had contributed a total of HK$33.6 billion ($4.28 billion) to the community, including HK$27 billion in betting duty, profits tax and Lotteries Fund contributions to the government. And its Charities Trust approved a total of HK$6.6 billion in donations, which constituted a major source of funding for Hong Kong’s charities.

How can the HKJC’s approach to fund the community, in the form of either hardware or software, be improved or optimized? How can all HKJC-funded construction projects, such as the building of schools, clinics and elderly homes, be enhanced? For instance, in terms of supporting arts, culture and heritage activities, aside from financing the Hong Kong Academy for Performing Arts, the Jockey Club Ti-I College, the Jockey Club Creative Arts Centre, Tai Kwun and the Hong Kong Arts Festival, what else can the HKJC do? Are any strategic steps being taken to innovate and reform its operations? In fact, it has been a while since its last review and evaluation.

Following the 20th National Congress of the Communist Party of China, it is more imperative for Hong Kong to think how the city can better integrate into national development and how the city’s future development strategy should align with the development of the Guangdong-Hong Kong-Macao Greater Bay Area. With regards to artistic performances and cultivating talents for administration and production, the HKJC should conduct strategic research studies with the aim of generating insights and inspirations for funding more innovative projects.

In terms of supporting tertiary education, the HKJC has funded the establishment of many research facilities and academic buildings. But local tertiary institutions have yet to run neck and neck with the likes of the Massachusetts Institute of Technology. And many local employers complain about the quality of local graduates. The HKJC has been funding various tertiary institutions; should it evaluate the effectiveness of its current approaches and explore ways to optimize its approaches?

On top of the Betting and Lotteries Commission’s work, what else could be done to keep the industry controlled and regulated? How can positive energy be derived for society? These are all matters of concern to the city and its people.

The HKJC is the only organization that is licensed to run a gambling business legally in Hong Kong, enjoying a de facto monopoly. Considering the unique role the HKJC plays in society, it should have a more-creative mindset to explore its future direction and outline its future development. The HKSAR government should adopt a more-holistic approach in dealing with the HKJC as well as the whole gambling industry with the objective of further developing the sector for the sake of society’s overall well-being.

The author is a member of the Chinese Association of Hong Kong and Macao Studies and artistic director of Zuni Icosahedron. 

The views do not necessarily reflect those of China Daily.