Monday, August 08, 2022

Ascot provides royal revenue boost

The Hong Kong Jockey Club has seen strong growth in its international business, with the addition of a pool on racing at Royal Ascot this year significantly boosting turnover.

The club said commingling turnover increased by 13.5 percent in the 2018/2019 season to HK$18.8 billion ($2.39 billion).

Launched just five years ago, commingling now represents 15 percent of the club’s total racing turnover and as of next season, it will have over 40 commingling partners in 14 countries and jurisdictions. 

This year, the HKJC joined with Ascot, Totepool and other regular partners to offer the Ascot World Pool on the five days of Royal Ascot. The event boosted turnover by HK$238 million.

Net income from its commingled operations was up 11.4 percent to HK$780 million.

“All of this underlines how Hong Kong has become the global centre for commingling,” CEO Winfried Engelbrecht-Bresges wrote in the club’s annual report. “Our world-class racing, competitive field sizes, high integrity, extensive racing information, state-of-the-art technology, and wagering pools with high levels of liquidity, have all made Hong Kong a leader in international wagering.” 

The HKJC said it was seeing increasing globalisation in sports, with a growing number of fans also watching simulcast racing on events overseas. Turnover from simulcast races jumped by 14.6 percent this season to HK$4.5 billion. At present it offers 23 simulcast days. 

Total wagering turnover for the financial year, which runs from July 1, 2018 – June 30, 2019, was HK$247.5 billion, up 5.8 percent on the last financial year. 

Still, not all international business has been welcome at the club, which is the only organisation in Hong Kong permitted to offer gambling services.

In September, the HKJC found itself in a spat with Betfair Australia which began offering bets on racing in the territory without the club’s permission.

The club told the Australian company to stop in a cease and desist order, saying it was given no prior knowledge of Betfair’s plans. 

“The Club takes this matter seriously as it represents a serious integrity issue and an equally serious infringement of its intellectual property rights,” HKJC secretary Philana Poon said in an open letter to Betfair CEO Tim Moore-Barton.

“As a matter of principle and consistency, the Club considers that Betfair ought not be permitted to exploit overseas racing where there has been no approval from the relevant overseas racing authority.

Betfair said it would offer its full range of products, including allowing punters to bet on a losing horse and it’s this point in particular has ruffled HKJC feathers.

“Creating the opportunity for people to back horses to lose is against what we all believe in,” Poon said in the letter. 

After the club’s intervention, Betfair backed off, but said it would still seek to find an accord with the HKJC. 

The storied club also achieved another milestone this year, holding its first race meeting at a new facility in Mainland China. The $3.7 billion Conghua complex provides much-needed capacity, including state-of-the-art stables, training and rehabilitation facilities.

So far, the club is labelling its China venture a success, with horses trained in Conghua winning 109 races during the season.

However, it’s not all been plain sailing. While the European Union, U.S., Japan and New Zealand recognize Conghua trained horses as having the same health status as those in Hong Kong, it’s been an uphill battle convincing Australian authorities.

Biosecurity agreements between H.K. and Australia broke down in 2017 during the construction of Conghua, with Australian authorities since requiring horses travelling from Hong Kong to spend 180 days in a third country out of fear horses may be carrying equine diseases from China.

Engelbrecht-Bresges says good progress is now being made in talks to end the dispute. 

Aside from wagering, the HKJC also offers football betting and lottery through its Mark Six operations. Football betting turnover has been growing fast and is approaching the same levels as racing turnover. In the latest year, turnover jumped 10.7 percent to a record of $114.1 billion, while Mark Six was up 4.3 percent to $4.8 billion. 

The HKJC notes that 60 percent of its wagering transactions are now carried out online. 


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