HKJC’s Enhanced Overseas Wagering Strategy Boosts Annual Turnover
In a recent announcement following its Annual General Meeting (AGM) held on 5th September, the Hong Kong Jockey Club (HKJC) reported their financial results for the fiscal year ending 30th June 2023.
The first seven months of the year presented challenges, predominantly shaped by the pandemic and subsequent economic slowdown. However, despite local turnover for Hong Kong racing dipping by 1.3%, the HKJC’s strategic push to increase its global customer base through commingling has proven fruitful. Commingling on Hong Kong racing observed a 3.0% rise, equivalent to HK$25.4 billion (£2.6bn), and accounting for 19.6% of the total turnover for Hong Kong racing for that season. This uplift led to a 1.5% increase in HKJC’s overall income from wagering on Hong Kong racing.
Capitalizing on the success of its commingling strategy and leveraging its advanced technology and the liquidity of its pools, HKJC introduced the World Pool, focusing on the simulcast of premier overseas races. Consequently, Hong Kong is now positioned as the central hub for wagering on globally renowned races. With the addition of three more World Pool events last season, the total turnover on simulcasting and the World Pool rose by 12.5%, making up 8.4% of the total racing turnover.
As a result, the total racing turnover for the 2022/23 season witnessed a 0.5% increase, reaching HK$141.1 billion (£14.3bn). Additionally, the season’s income from racing wagering also surged by 1.8%, equal to HK$6.4 billion (£650m).
On the football betting front, there was a marked 9.1% increase in turnover amounting to HK$156.9 billion (£15.9bn) for 2022/23. This surge was attributed partly to the World Cup but majorly to HKJC’s innovative customer information and wagering system. This system facilitated the introduction of new In Play bet types, offering a competitive edge against illegal markets. Nonetheless, despite the growth in turnover, HKJC’s income remained consistent at HK$9.8 billion (£996m), affected by the newly introduced Special Football Betting Duty of HK$12 billion (£1.2bn), spread over five years.
Furthermore, the Mark Six lottery, which resumed its thrice-weekly draws, saw an impressive growth of 29.2%, culminating in HK$7.5 billion (£762m) for 2022/23.
These figures, despite the year’s hurdles, enabled HKJC to record a total turnover of HK$304.8 billion (£31bn). This, in turn, facilitated a record contribution of HK$35.9 billion (£3.6bn) to the community. This amount is inclusive of a staggering HK$28.6 billion (£2.9bn) directed towards betting duty, profits tax, and Lotteries Fund contributions, and HK$7.3 billion (£742m) allocated for approved charity donations.
Addressing the newly introduced Special Football Betting Duty, the HKJC has committed to maintaining its annual charity donations at a minimum of HK$4.5 billion (£457m) over the duty’s five-year tenure.
With digital advancements, HKJC faces stiff competition from tax-free illegal bookmakers and overseas sports betting bookmakers operating under low-tax regimes. Any further increase in betting duty rates could jeopardize HKJC’s competitive pricing, hindering its ability to invest for future growth.
Over the past decade, the HKJC’s charitable contributions have amplified, making its Charities Trust one of the world’s top ten charity donors. This trust supports a myriad of needs in tandem with the Government, NGOs, and other grantee partners, focusing on impactful initiatives.
One of the Trust’s noteworthy projects is the revitalization of the Central Police Station compound as Tai Kwun – Centre for Heritage and Arts. Celebrating its fifth anniversary this year, Tai Kwun has emerged as a distinguished public space in Hong Kong’s heart.
On the mainland, HKJC’s strategic expansion includes the establishment of the Conghua Racecourse in Guangzhou, a globally recognized center of excellence. This development supports the equine industry and horse sports in the Mainland, aligned with the National Equine Industry Development Plan (2020-2025).
In conclusion, while the HKJC faced numerous challenges this year, strategic moves in the igaming sector and dedication to its mission have enabled continued growth and a substantial contribution to the community.
Reflecting on the Club’s achievement, Club Chairman Michael Lee said: “I would like to express my sincere thanks to the racing community, to our members, to the HKSAR Government, to Mainland authorities, to the Club’s management and employees, and most especially to our customers. Through your support, Hong Kong racing is an example to the world of the strength and resilience of our city.”
Club CEO Winfried Engelbrecht-Bresges said: “Through resilience and agility, the Club performed extremely well during the pandemic. However, there is no question that the post-pandemic environment is proving equally challenging, with the economy likely to be highly volatile for some time to come. In these circumstances, the Club’s exceptional performance last year was only possible because of its strategy to develop world-class racing and to export it overseas via commingling as well as through the creation of the World Pool. Together with the strong performance of football betting, this enabled the Club to contribute a record HK$35.9 billion to the community.”