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Hong Kong looks to UK for help with racing industry

The Jockey Club in Hong Kong is turning to an economic model used by the UK in an attempt to increase the country’s horse racing industry’s revenue. The goal of the new plan is to double turnover, and increase the total to HK$137 billion.

The model being adopted is known as the “four-win” proposal and is held responsible for a significant upturn in the UK racing industry. UK economic secretary John Healey claimed in March 2003 that the introduction of the system increased betting turnover by 46 percent and resulted in the creation of 2000 new jobs.

The racing turnover of Hong Kong is the highest in the world, but has been falling since 1997 when faced with competition from other expanding gambling areas. Hong Kong asked consultants from the UK to help them address their issues, and for the past two months these consultants have been reviewing the industry’s business for the last seven years. They have also been examining other economic factors such as employment rate as well as the availability of other gambling sources in or near Hong Kong, internet gambling and illegal bookmakers.

The plan being presented to the HK government in the next few weeks starts with the recommendation of abolishing betting taxes currently in place and replacing with a profit tax instead. Government tax at the moment take 12 percent on simple bets (like win, place etc) and 20 percent on more sophisticated bets (tierce, double tierce. The club then takes 5.5 percent on simple bets and 5 percent on complicated bets to meet costs, and the remainder goes to charity.

The new model replaces this system with the club taking 10 percent of bets for simple wagers and 12 percent for tierce-like bets. This is the basis of the new model, although it does get more complicated than this. The overall result though is projected to be not only the huge increase in turnover but also better dividends for punters, allowing the horse racing industry to better compete in an ever growing market. The jockey Club are turning to this new system as they believe it is their one strong chance to change the trend of declining turnover and profits that the Hong Kong racing industry is currently facing. Release Odds On American Idol Final Four
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