SBC News Voice of the Sports Betting Industry
The Hong Kong Jockey Club (HKJC) has detailed a positive end to a challenging 2022/23 financial year, reporting record turnover and a stronger contribution from football betting.
Hong Kong’s government-backed betting operator reported total turnover for the 12-month period ending 30 June 2023 of HK$304.8bn (£31bn), despite local turnover from Hong Kong itself falling by 1.3%.
Regarding products, racing turnover remained consistent with the year prior at HK$141.1bn (£14.3bn), although racing betting income rose 1.8% to HK$ 6.4bn (£650m).
Football betting turnover, meanwhile, rose 9.1% from HK$143.8bn (£13bn) to HK$157bn (£16bn), attributed by the company to the impact of the 2022 FIFA World Cup. Mark six lottery turnover also rose 29% to HK$7.5bn (£752m), having returned to three draws per week.
However, despite these upticks the group acknowledged that total betting income had remained ‘flat’ at HK$9.8bn (£996m), attributed to increased taxation from the Special Football Betting Duty of HK$12bn (£1.2bn).
The financial year was marked by challenges, the HKJC stressed, as the Hong Kong economy continues to recover from long-standing COVID-19 restrictions. The group expects that ‘the business environment will continue to be very difficult’, based on macroeconomic trends.
HKC Club Chairman, Michael Lee, said: “I would like to express my sincere thanks to the racing community, to our members, to the HKSAR Government, to Mainland authorities, to the Club’s management and employees, and most especially to our customers.
“Through your support, Hong Kong racing is an example to the world of the strength and resilience of our city.”
As well as customer loyalty, the HKJC has cited several other factors as providing a bulwark against difficult macroeconomic conditions affecting its 2022/23 trading.
Regarding the uptick of football betting, the firm has attributed growth in this area not just to the World Cup but also to a newly adopted customer information and wagering system.
This new system enabled the HKJC to offer new in-play betting options to customers, which it stated has helped counter the illegal market, which – along with overseas operators ‘under low tax regimes’ – it states it has had to compete against extensively.
Lastly, the HKJC also stressed the significance of global cominling on racing as strongly impacting turnover and income on the sport. Commingling on Hong Kong racing rose 3% to HK$25.4bn (£2.6bn to comprise 19.6% of total turnover for the season) and so income on wagering on the sector was up 1.5%.
The HKJC’s activity in this area has also seen extensive global engagement via the World Pool, the global tote system established by the Club and with events sanctioned by the Hong Kong government.
The World Pool saw the addition of three new events last season and towards the close of the year the HKJC extended its partnership with the UK Tote Group until 2028, with the duo continuing to cooperate on development of new racing products.
Due to the World Pool’s success, Hong Kong ‘has become the global hub for wagering on the world’s best races’, the HKJC emphasised, citing total turnover on simulcasting and the World Pool up 12.5% to comprise 8.4% of total racing turnover.
HKJC CEO, Winfried Engelbrecht-Bresges, said: “Through resilience and agility, the Club performed extremely well during the pandemic. However, there is no question that the post-pandemic environment is proving equally challenging, with the economy likely to be highly volatile for some time to come.
“In these circumstances, the Club’s exceptional performance last year was only possible because of its strategy to develop world-class racing and to export it overseas via commingling as well as through the creation of the World Pool.
“Together with the strong performance of football betting, this enabled the Club to contribute a record HK$35.9bn to the community.”
Having focused heavily on the challenges of the 2022/23 financial year and racing season, the HKJC has warned of the potential consequences of any potential ‘permanent increase’ in taxation.
The group stressed that ‘in the digital age, the club faces significant competition from illegal bookmakers’ which make substantial profits. Betting duty increases could reduce the HKJC’s income, the club explained, subsequently impacting its competitiveness.
