Hong Kong’s betting turnover on local races fell by nearly 10 percent in 2023, with the Hong Kong Jockey Club (HKJC) attributing the decline to a rise in illegal gambling and increased spending by residents outside the city.
The HKJC released its annual results on Wednesday, with the group’s Chief Executive Officer, Winfried Engelbrecht-Bresges, calling for the extension of its license to include betting on other sports, citing the “increasing threat of illegal gambling, which is growing much faster than the legal market”.
The HKJC is the sole authorized gambling operator in the Special Administrative Region, which has a population of over 7 million.
The operator reported facing “significant external challenges “during the 2023-24 financial year, including increased competition due to “aggressive marketing of Macau casinos,” noted the CEO.
The club also noted a fundamental post-pandemic shift in consumer behavior, with a preference for new digital experiences and outbound travel, impacting both race attendance and wagering.
During the period, the group notes that its racing business was the most impacted, seeing a drop in betting turnover on local races during the season from September 10th last year to July 14th of 4.5 percent, to HK$134.7 billion ($17.28 billion). Despite efforts to expand its global customer base, these were not enough to offset the overall decline, with total horse racing bets falling by 43.1 percent, to HK$136.1 billion ($17.46 billion) during the year.
Income from the segment fell by 4.2 percent, to HK$6.1 billion ($782.4 million), with income from Hong Kong customers dropping by 7.8 percent, to HK$397 million ($50.92 million)
Football betting turnover rose by 2.2 percent to a record HK$160.3 billion, driven by additional matches, 24-hour operations, and new betting products aimed at countering illegal markets.
However, the club noted that despite this growth, income from football betting fell by 16.6 percent to HK$8.1 billion ($1 billion), due to the annual HK$2.4 billion ($308 million) special football betting duty introduced in April 2023, which will remain in place for five years.
Revenue from the Mark Six lottery increased by 13.3 percent to HK$8.5 billion ($1.1 billion), which the club attributed to changes in the jackpot reserve model, allowing for larger prizes.
The operator reported a total wagered amount of HK$304.88 billion ($39.1 billion), unchanged from the previous year. However, its net margin dropped by 10.5 percent to HK$14.8 billion ($1.9 billion), largely due to the annual HK$2.4 billion ($308 million) special football betting duty.
