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HKJC contributions record HK$35.9 Billion (PS3.6 Billion) to the community as racing turnover totals HK$141.1 Billion (PS14.3Billion)
Hong Kong Jockey Club announced the results of the financial year 2022/23, which ends June 30, 2023.
The HKJC had a difficult year. The pandemic dominated the first seven-month period, and the economic slowdown that followed the pandemic affected the HKJC. Macro-economic trends indicate that the business climate will remain very challenging.
HKJC’s successful strategy of exporting world-class racing to overseas markets via commingling offset the 1.3% decline in local racing turnover. Last season, commingling in Hong Kong racing increased by 3.0% and reached HK$25.4 (approximately PS2.6) billion. This represented 19.6% of the total turnover for Hong Kong racing. The HKJC earned 1.5% more on Hong Kong racing wagers for the year.
The HKJC launched the World Pool based upon the simulcasting of top races overseas. It did this by leveraging the commingling success, the HKJC’s world-class technologies and the liquidity in its pools. Hong Kong is now the hub of the world for betting on the best races. The World Pool and simulcasting turnover increased by 12.5% last season with the addition of three World Pool races. This represents 8.4% in total racing turnover.
The total racing turnover in 2022/23 was 0.5% higher at HK$141.1billion (approximately PS14.3billion). The season’s income from racing betting was up by 1.8%, reaching HK$6.4billion (approximately PS650m).
World Cup and HKJC’s new wagering system boost football betting turnover
In 2022/23, football betting had a good performance. Turnover increased 9.1% (approximately PS15.9billion) to HK$156.9billion. The World Cup’s unusual timing in the middle of a financial year was part of the reason, but the new customer information system and wagering system of the HKJC also played a role. This enabled the launch of In Play bets to compete against the illegal market. Despite the increase in turnover, the HKJC income was flat, at HK$9.8bn (approximately PS996mn) due to the increased taxation. This is in the form Special Football Betting duty of HK$12bn (approximately PS1.2bn), payable over five financial years. HK$0.6bn (approximately PS61mn) will be paid in 2022/23.
In 2022/23, the Mark Six Lottery, which was reduced to three draws a week, saw a 29.2% increase to HK$7.5B (approximately PS762M)
Despite the challenges, HKJC managed to achieve a record turnover (HK$304.8billion, or approximately PS31billion) which enabled it to donate a record HK$35.9billion (or approximately PS3.6billion) to the local community. The HKJC contributed a record HK$28.6 (approximately PS2.9) billion in betting duty, profit tax, and Lotteries fund contributions, and HK$7.3 (approximately PS742 millions) billion in approved charitable donations.
Michael Lee, Chairman of the HKJC said, “I’d like to thank the racing community, our members, the HKSAR Government and mainland authorities, as well as the HKJC management and employees, and, most importantly, our customers.” Hong Kong racing, through your support, is a shining example of the resilience and strength of our city to the rest of the world.
Winfried Engelbrecht Bresges, Chief Executive Officer of the HKJC said, “Through resiliency and agility, the HKJC did extremely well during this pandemic.” The post-pandemic economy is likely to remain volatile for a while, but there’s no doubt that the HKJC is facing similar challenges. The HKJC’s outstanding performance in the past year was due to its strategy of developing world-class racing, and exporting it overseas through commingling and the creation of the World Pool. This, along with the strong performance in football betting, enabled the HKJC’s contribution to the community to reach a record HK$35.9billion.
Betting Duty
The HKSAR government has introduced a Special Football Betting Duty this year, which requires the HKJC, on top of its substantial betting duty, to pay HK$12 Billion (approximately PS1.2 Billion) over five-years. The HKJC, however, has committed to maintaining its approved regular charity donations of not less than HK$4.5billion (approximately PS457m) a year for the duration of the Special Football Betting Duty.
The HKJC is aware of the fiscal need for the Special Football Betting Tax. The HKJC is concerned by any increase in taxes, particularly the betting duty rate, which is higher than other jurisdictions. Macau only pays 25% on its gross margin for football. The HKJC, however, pays 50%. The racing betting duty in Japan is 40%, but the HKJC charges up to 75%. Duty rates are lower in Australia, the United States, and the United Kingdom.
The HKJC is facing significant competition in the digital age from both illegal bookmakers that pay no taxes and overseas sports betting bookmakers operating under low tax regimes. Illegal betting operators and those from overseas are already making profits of over HK$15 billion a year (approximately PS1.5billion) by Hong Kong customers. The HKJC’s income would drop significantly if betting duty rates increased. The HKJC will be unable invest in its future as a result. It could not maintain its high level support for Hong Kong. Over the past ten years, its betting duty contributions have risen from HK$17.2bn (approximately PS1.7bn) to HK$27.1bn (approximately PS2.8bn) and its charitable donations have more than tripled, from HK$1.95bn (approximately PS198m) to HK$7.3bn (approximately PS741m).
Together Stronger for Hong Kong
The HKJC Charities Trust, as a result its significant increase in donations during the past ten years has become one the top ten charities donors around the world.
The Charities Trust reviews its strategy regularly to maximize its impact. This year it reviewed its strategy again, taking into account societal needs. The new triennial strategy (2022/25) has five pillars. They are Positive Ageing & Older Care, Children & Youth Development, Healthy Community Development Talent & Sector Development and Sports & Culture. The Trust will develop sustainability as a strategic theme, given the impact of this global issue.
The Charities Trust provides support for a variety of needs, in collaboration with government agencies, NGOs, and other grantees. The HKJC has also been able to use the extra resources it generated from its business results to concentrate on high-impact, needle-moving initiatives. It brings new service models to the service industry through Trust-Initiated Projects. Many TIPs have already had an impact. The Education Bureau, for example, has adopted CoolThink@JC to promote the digital creativity among upper primary students. The Trust has launched its latest TIP JC Volunteer Together this year, which promotes community volunteering. The Trust also approved nine TIPs including a new initiative for developing primary care pharmacy services in the community.
Tai Kwun, Centre for Heritage and Arts, was one of the Trust’s most important strategic projects. It was launched to celebrate the HKSAR’s tenth birthday. Tai Kwun celebrated five years of existence this year. It has been a unique public place in the heart Hong Kong, and a global symbol of best practices in heritage conservation. Over 13 million visitors from Hong Kong and abroad have so far enjoyed the historic buildings, and the year-round program of exhibitions and performances.
The Charities Trust is preparing for the future and will host the third Philanthropy for Better Cities Forum in the West Kowloon Cultural District on September 11-12. The forum, which will be held under the theme Philanthropy for Fairer Societies, will bring together 1,600 delegates and 70 distinguished speakers from around the globe. It will also establish Hong Kong as an international thought leader in the field of philanthropy.
Strategic Development in the Mainland
The HKJC has successfully established Conghua Racecourse in Guangzhou as a globally-recognised centre of excellence, comprising the mainland’s first internationally-recognised Equine Disease Free Zone and state-of-the-art facilities including stables, training tracks, an international standard veterinary clinic and rehabilitation centre and vocational training for equine industry development. The HKJC, building on its success, is contributing to the national development by supporting the equine and horse sports industry in the mainland.
Racing Vision 2030 will see the HKJC expand its world-class racing to include not only Hong Kong’s two racecourses, but also Conghua Racecourse located in Guangzhou. Two national policies are the foundation of this vision. The first is the development of the Greater Bay Area (Guangdong, Hong Kong, Macao) and the second is the National Equine Industry Development Plan (2025-2025).
The HKJC signed a Framework Cooperation Agreement in 2021 for the development of the Guangzhou and Hong Kong Racing Economic Cluster. Accordingly, the HKJC plans to host regular race meetings in Conghua beginning in 2026. The construction of an iconic grandstand and the expansion of stabling facilities are currently underway.
The HKJC wants to promote equine sport in other parts on the mainland. It has worked with the General Administration of Sport and the Ministry of Agriculture and Rural Affairs for many years. It signed agreements this year to further its cooperation with both the CEA, and CHIA.
The HKJC, which has provided extensive support to the equestrian competitions at the Guangzhou Asian Games and Beijing Olympics in 2008, is now providing world-class technical and expertise support to the 19th Asian Games held in Hangzhou. Hong Kong China will field its equestrian squad, which has benefited from HKJC’s Hong Kong Equestrian Performance Plan. The HKJC and the Hangzhou government will collaborate to continue the equestrian legacy from the Games.
Summary of Results – By Financial Year (1 July 2022 to 30 June 2023)
|
2022/23
|
2021/22 (HK$m) |
% Change |
|
| Race turnover | 140,363 | 140,396 | 0.0% |
| Football Turnover | 156,876 | 143,798 | + 9.1% |
| Mark Six Turnover | 7,560 | 5,850 | + 29.2% |
| The Total | 304,799 | 290,044 | + 5.1% |
*87 race meetings for 2022/23, and 88 races in 2021/22
Contributions of HKJC – By Financial Year (1 July 2022 – 30 June 2023)
|
2022/23
|
2021/22
|
% Change |
|
| Racing betting duty | 14,105 | 14,135 | – 0.2% |
| Football Betting Duty | 10,963* | 9,844 | + 11.4% |
| Lottery duty | 1,890 | 1,463 | + 29.2% |
| Profit tax | 539 | 696 | – 22.6% |
| Lotteries Fund | 1,134 | 877 | + 29.2% |
| Approved Trust Donation | 7,264 | 6,594 | + 10.2% |
| The Total | 35,895 | 33,609 | +6.8% |
The Special Football Betting Tax (April to June 2023) includes HK$600 Million
The Hong Kong Jockey Club’s 2022/23 annual report can be downloaded from the HKJC website at: https:// Corporate.HCJC .com/Corporate/English/History-and-Reports/Annual-Reports .aspx.
