Club 'fears hike in duties will hamstring war on syndicates'

Staff reporter

Hong Kong Jockey Club is wary of a potential hike in betting duties, particularly given the escalating challenges posed by illegal gambling operations, sources indicate.

An increase in these duties could diminish dividends, ultimately undermining the club's competitiveness against illicit gambling syndicates.

Currently, Hong Kong's betting duty rates are among the highest globally, with horse racing subjected to a steep progressive tax rate that can reach up to 75 percent.

For instance, on a HK$100 bet, after deducting HK$83 in dividends, only HK$17 remains - of which HK$13 goes to taxes, leaving just HK$4 in revenue.

In football betting, a 50 percent duty is applied to net proceeds following dividend payments.

Meanwhile, Mark Six betting incurs a 25 percent tax on turnover, along with an additional 15 percent directed toward the government's Lotteries Fund. Of the remaining amount, 54 percent is allocated to dividends and 6 percent to the HKJC's commission.

Last year, the HKJC made a significant contribution to the community, returning a record HK$40.1 billion, which included HK$29.9 billion from betting duties, profits tax and Lotteries Fund contributions, alongside HK$10.2 billion in approved charitable donations benefiting various community segments and disadvantaged groups.

Moreover, the HKJC has been actively combating illegal betting operators to safeguard Hongkongers' finances.

However, the organization faces competitive constraints due to its regulated betting framework, which allows only three types of betting and lotteries, prohibits underage and credit betting, and imposes high duty rates.

By contrast, illegal bookmakers operate without such regulations, offering a broader array of betting options - including football and e-sports - at attractive odds to entice bettors.

Consequently, a further increase in betting duties could lead to reduced dividends, making the HKJC less competitive against illegal bookmakers.

This decline may have serious repercussions, potentially diminishing the club's charitable contributions to the community and exacerbating security and social issues stemming from the growth of unauthorized betting operations.