Hong Kong Ready To Ban Offshore Betting

by Mary Swire, Tax-News.com, Hong Kong

03 May 2002

Hong Kong's Jockey Club, one of the last bastions of the old order in the one-time colony, is doing its best to commit suicide in true dinosaur fashion, and the Government, which ought to know better, is helping it.

That's the construction many grown-ups put on the Gambling Ordinance which is about to be passed by LEGCO, Hong Kong's apology for a parliament. Because of the rise of offshore, Internet-enabled betting, the Jockey Club has seen its onshore (taxed) betting turnover drop by about 12% from a 1997 high of HK$92 billion. In 1999-2000, it paid HK$11 billion in taxes and HK$1.8 billion to charity. So it ran crying to the government, which has responded with legislation which will ban all forms of offshore betting outright.

The Jockey Club estimates that HK$83bn is 'lost' to offshore betting, but bookmaker Victor Chandler Worldwide says the actual amount of illegal sports betting is probably twice as much.

Victor Chandler Chief Executive Michael Carlton said he thought the legislation represented "a huge missed opportunity for Hong Kong." He estimated there would be an unprecedented level of gambling on the World Cup, which begins on May 31, with turnover of some hundreds of millions of US dollars, much of which would bypass the SAR.

Mr Carlton calls the current proposal the worst of all possible solutions, saying that it will create a vast underground industry: "Some 300,000 people intend to bet on this summer's World Cup, and the only options they will have when the law is amended will be to bet with illegal bookmakers, or not to bet at all."

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