Monday, August 30, 2004
Jockey Club urges for tax reform
The Chairman of Hong Kong Jockey Club, Mr Ronald Arculli, has urged the Hong Kong SAR Government to reform betting duty in order to assure a future for Hong Kong racing and to maintain the Club's support for tax and charity.
Reiterating the messages made at the Club's Annual General Meeting on 26 August, Mr Arculli said despite the Club's achievements acknowledged around the world, the continuous decline in betting turnover is putting the future of Hong Kong racing at risk.
At a pre-racing season media conference, Mr Arculli said the total Jockey Club turnover was HK$88 billion last year of which HK$16.1 billion was from the first- year operation of football betting. The racing turnover last year declined further by 9% to HK$65 billion, its seventh year of turnover decline and a cumulative drop of 29% since 1996/97.
The Club still managed to donate HK$975 million to charity and community projects through the Club's Charities Trust and remains as Hong Kong's largest single taxpayer by paying HK$12.18 billion to the Government, including HK$8.8 billion in racing betting duty and HK$1.65 billion gross profit tax on football betting, Mr Arculli said.
“Excessive betting duty rates and rigid regulations have allowed illegal and offshore betting operators to penetrate the Hong Kong market,” he warned.
“With increasing proliferation of new casinos in nearby cities, casino boats and online betting exchanges, turnover-based betting duty at an excessively high rate is no longer a realistic or sustainable proposition. The Club believes it is time to conduct a betting duty reform which allows more flexible options including replacing betting duty with a gross profit tax."
Mr Arculli said the UK replaced turnover-based betting duty with a 15% gross profit tax in late 2001, which resulted in an increase of 82% in betting turnover in the first year.
“For Hong Kong, a similar change would allow us to recapture money drained underground or offshore. This would be good not only for racing but also for containing the drainage of community resources offshore and underground,” he said.
“We need to create a win-win situation that can assure a future for Hong Kong racing and to maintain our support for tax and charity.”
Turning to the initiatives being taken by the Club, he emphasised that the Club is determined to enhance and enrich racing experiences and enjoyment to racing fans.
Mr Arculli said improvements to the racing facilities this year will see a new Parade Ring featuring a new Owners’ pavilion, new Members and Public entrances, designated beginners and visitors areas, automated teller machines and live broadcast of races at the Club's renovated off-course betting branches. These are just some of the many enhancements to cater for the needs of customers.
In addition, the Club will introduce new TT consolation prizes and cross-poll all-ups in the coming season in order to satisfy customers' requirements.
Considering the reviving tourism of Hong Kong, he believed facilitation for visitors is one of the Club's key initiatives. Starting from the first race meeting on September 5, money exchange counters will be in place in the racecourses. Mr Arculli added that new betting account procedures for visitors will be introduced in the new season enabling them to enjoy betting services on football matches or horse races during their stay in Hong Kong.
In response to the public's needs, the Club is to organise events for family enjoyment with emphasis on fun-filled, diversified and partying elements. National Day Carnival is the first major event. The Club will also consider increasing public participation in barrier trials, which have been very popular.
In order to cope with growing interest of overseas racing fans in Hong Kong races as well as an additional source of revenue for the Club, Mr Arculli said the Club would continue negotiating with overseas counterparts to explore possible export of the world-class racing product overseas. It was confirmed that three Asia Racing Federation racing jurisdictions would simulcast Hong Kong's races in the coming season.
“We are glad that the Singapore Turf Club has agreed to take 30 more day meetings on top of our night race meetings," he said. “Another piece of good news is New Zealand Racing Board has confirmed that they will take our day races starting this racing season. The Club is in final stage negotiation with the Pan Malaysian Pools regarding taking all Wednesday night meetings.”
He said the Club would also urge the government to allow more flexibility in terms of number of race meetings and simulcast of races. Options worth exploring include increasing the number of race meetings or overseas simulcast races, and spreading out the meetings throughout the year.
“Even facing challenges from all directions, the Club is committed to advancing the quality of racing, sporting and betting entertainment,” Mr Arculli said. “What concerns us most is when will policies governing the business of racing in Hong Kong be brought up to speed because the Club believes standing still is never an option for Hong Kong as a whole.”
For old articles (from 1st March 2000) go to the Newslink