The phrase ‘offshore gambling’ could get a whole new spin if the Hong Kong Jockey Club (HKJC) makes good on its proposal/threat to set up a separate operation outside Hong Kong in order to co-mingle pools with other betting jurisdictions. The CEO of HKJC, Winfried Engelbrecht-Bresges, is adamant that co-mingling HKJC’s massive standalone pools with co-mingled pools in the UK, Australia, New Zealand, Singapore, Canada and South Africa will not only boost HKJC’s (already hefty) bottom line, it will benefit racing globally.
Standing in HKJC’s way is what Engelbrecht-Bresges referred to as the local Hong Kong government’s “taxation hurdles” – a takeout rate that would make other nations’ participation in such a co-mingling scheme unviable. The government also limits HKJC to offering bets on 15 overseas races (and none between July 16 – Aug. 31), while Engelbrecht-Bresges told GamblingCompliance.com he would prefer “at least 40.”
Unlike most racing operations, HKJC’s business is booming, with betting turnover up 14% last season to a ten-year high of HK $80.41b (US $10.3b). Engelbrecht-Bresges told ThoroughbredNews.com.au that this current season “on average, we have grown by 10%, and in the last week this trend has accelerated with meetings that have 15-18% growth.”
Calling the co-mingling move a “win-win situation,” Engelbrecht-Bresges is promising to plow ahead with or without the local government’s approval, and a finished feasibility study is expected early in the new year. Engelbrecht-Bresges has long denigrated ‘offshore’ bookmakers who dare take wagers on his ponies, but as he told the Racing Post, the move offshore would be done “with a view that at a later stage we could bring the money back onshore if the government processes our application.” (And if not…? Say, what size hypocrite hat do ya take, Winfried?)
In less bullish racing news, Ireland’s Minister for Agriculture Simon Coveney has ordered an independent review of the nation’s racing industry. Speaking at the recent Horse Racing Ireland (HRI) awards, Coveney promised to examine “the structures and legislation governing the industry” and racing’s “integrity and regulation.” Coveney offered reassurances that the review would be carried out in an “open and transparent manner,” but the Irish Times reported that attendees immediately began speculating that a reduction in the size of racing’s ruling body would be the ultimate result.
Coveney did some speculating of his own, suggesting that once the new 1% online betting tax was established early next year, the government would consider nudging that rate higher (following presumably rancorous discussions with online bookmakers and betting exchanges) in order to make racing (ahem) self-sufficient. “What we have to get away from is going to the Department of Finance, cap in hand, making a case for racing. What I would like to see is the industry funding itself with levies from bets, both on and offline, from the exchanges, and maybe other sources. We have to ensure the means of getting revenue from betting turnover is on a sound legal footing. But I am confident of getting the right mechanism within weeks.”
Perhaps Italy would like to borrow some of Coveney’s confidence. Betting on harness racing has fallen 21% this year, and Italian racing’s governing body UNIRE has announced a 40% cut in purses for 2012. Federippodromi, the organization that represents 16 of the nation’s leading tracks, has announced its members will go on strike January 10 if the cuts are allowed to go forward. Mamma mia…
