HKJC opposes increase in football betting tax to 80%
The New People’s Party (NPP) has proposed increasing football betting duty by 30 percentage points.
Hong Kong.- The Hong Kong Jockey Club (HKJC) has expressed its opposition to the New People’s Party (NPP) proposal to increase Hong Kong’s football betting duty from 50 per cent to 80 per cent. It warned the proposal could deeply damage its current business model and Hong Kong’s global reputation as a racing jurisdiction, jeopardising the public interest.
The NPP’s proposed rise in football betting duty would potentially increase the club’s tax payments to the government from HK$25bn (US$3.19bn) to more than HK$31bn. Wagering income before operating expenses could fall 40 per cent from HK$15bn to HK$9bn, the clubs said.
The HKJC said the proposal “represents a lack of understanding of the competition in the wagering market and the Club’s investment and business.”
It added: “It will result in a zero surplus at best or more likely a negative one, preventing the Club from making necessary investments to secure its future and from contributing to the community.”
Although the Hong Kong Jockey Club is currently the only licenced betting operator in the country, it faces competition from Macau as well as from illegal and offshore bookmakers. The HKJC argued that Hong Kong already has “the highest betting duty rates in the world, ahead of other operators by 15 per cent to 65 per cent.”
It added that “any increase in football betting duty will reduce the Club’s competitiveness and drive more Hong Kong people to bet with illegal and offshore bookmakers. Under these circumstances, the government will receive less, not more, tax and duty.”
It said that to compete against illegal and offshore gaming companies it has spent HK$5bn to build a state-of-the-art IT system. It added that over the next five years it will invest an additional HK$7bn in IT systems, applications and infrastructure.
“Any increase of football betting duty will harm our ability to invest for a sustainable business. In addition, any football betting duty increase will affect racing,” the club said.
See also: HKJC: Chinese New Year race day sees highest betting since 1997