Hong Kong Set To Reform Betting Duty System

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

10 April 2006

Hong Kong's Executive Council has approved proposals to reform the territory's horse race betting duty system, Secretary for Home Affairs Dr Patrick Ho revealed last week.

According to Dr Ho, under the proposed new rules, betting duty will no longer be charged on betting turnover.

Instead, a single set of rates will progressively apply to gross profits - with duty at 72.5% up to $11 billion, increasing by half a percentage point for every $1 billion up to $15 billion, and at 75% for the amount exceeding $15 billion.

Speaking to reporters on Friday, Dr Ho explained that the reforms aim to rationalise the regulatory system for horse-race betting, and combat rampant illegal gambling on horse races, while maintaining revenue from betting at a steady level.

He said the Government's gambling policy is to restrict opportunities to a limited number of authorised and regulated outlets.

"The underlying rationale is not to encourage gambling. Our proposal to reform the duty system for horse race betting is in line with this policy."

The regulatory regime of horse race betting will also be rationalised to bring it broadly in line with legal football betting and lotteries. Proposed measures include:

• To put in place a licensing system for horse race betting;
• To expand the functions of the existing Football Betting & Lotteries Commission to include advising the Secretary for Home Affairs on the regulation of the conduct of horse race betting; and
• To provide that the Secretary for Home Affairs could issue Codes of Practice as and when appropriate to prescribe detailed guidelines on particular aspects of the licensing conditions.

The Betting Duty (Amendment) Bill 2006 will be introduced into the Legislative Council on April 26.

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