The Hong Kong Jockey Club has announced that its contribution to the public purse through tax and betting duty payments reached a record HK$13.62 billion in the 2009/10 financial year, while its donations to community and charitable projects through The Hong Kong Jockey Club Charities Trust also set a new record, totalling HK$1.52 billion. Speaking at the Club's 2010 Annual General Meeting, retiring Chairman Dr John C C Chan said the recovering economy and the addition of extra simulcasts had helped the Club's core horse racing business achieve a 5.9% increase in turnover to HK$71.65 billion and a 3.3% increase in the Club's share of gross margin to HK$3.23 billion.

However, he added that although the figures seem positive they do not tell the whole story. "In reality, the Club's share of gross margin on horse racing has shown no overall growth of significance since a package of betting duty reforms was introduced in 2006, while the Government's share has risen over the same period by some HK$730 million. "In other words, while the reform package has been successful in its goal of luring back revenue from illegal operators, the benefits have not been shared equitably. Yet over the same period, our operating costs have increased, especially through the cost of running more races.”

Calling for a comprehensive review of the existing taxation framework, Dr Chan said this was an issue that needed to be addressed in the coming years. Chief Executive Officer Winfried Engelbrecht-Bresges echoed this view, saying that the Club still faced many challenges. "Sustaining revenue streams is becoming more and more challenging to us with the steady increase of gaming in the surrounding region, especially the new generation of integrated gaming resorts in Macau and Singapore and the growing number of internet gaming operations targeting our customers.”

The CEO noted that the amount of money lost by Hong Kong people to Macau casinos alone had more than doubled in the past four years from HK$9 billion in 2005/06 to HK$22 billion in 2009/10. "To put this into perspective, this is larger than Hong Kong's total gross margin on racing, football and the Mark Six, counting both the Government's and the Club's shares," he said. "This challenge will be further exacerbated when Macau casinos start general sports betting in 2011.”

According to E Engelbrecht-Bresges it is important that the Government and legislators looked at the wider picture when considering gambling issues. "If it were not for the Club's contributions to public funds, other revenue sources such as salaries tax would need to rise significantly. To sustain these contributions to the community in the long term, we need to establish a new framework that can enable the Club to stay competitive, covering services, offerings, taxation and regulatory issues." (E-09.01.10)

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