Call for legalized sports betting grows in Hong Kong amid fiscal deficit

As Hong Kong’s fiscal deficit continues to deepen, calls for the further legalization of sports betting options has gained momentum, with key stakeholders advocating for a solution to boost government revenue. 

The Hong Kong government is set to unveil its latest budget on February 26th, which has attracted significant attention. According to local media outlets, Heung Yee Kuk, a council-like organization representing interests in the New Territories of Hong Kong, has suggested legalizing sports betting on basketball, snooker, and tennis in a submission to Financial Secretary Paul Chan Mo-po. The submission includes 19 recommendations for the upcoming budget. 

The proposal, put forward by Heung Yee Kuk chairman Kenneth Lau Ip-keung, focuses on revenue generation rather than expenditure reduction. Lau has suggested that the government establish a government-owned sports betting and investment company, which would be subject to public bidding for its operation. He anticipates that the company could generate stable betting tax revenues of several billion Hong Kong dollars annually. 

Lau cited the National Basketball Association (NBA) as an example of a major international sporting event that could be considered for legalized betting. 

This call is similar to previous requests by lawmaker Adrian Ho.

Meanwhile, the Hong Kong branch of the Association of Chartered Certified Accountants (ACCA) has supported the proposal, advocating for the inclusion of basketball in the sports betting scope to help broaden government revenues. The association also estimates that the Hong Kong government could face a fiscal deficit of HK$92 billion ($11.81 billion) in the 2024/25 financial year. 

Last year, Winfried Engelbrecht-Bresges, the Chief Executive of the Hong Kong Jockey Club (HKJC), expressed his openness to offering NBA betting, should the government allow it.

The executive highlighted the potential for legalizing betting to capture a significant portion of the current illegal basketball betting market. He estimated that up to 60 percent of the 150,000 punters currently engaging in illegal basketball betting could be redirected to legal channels.

The rise of illegal sports betting, particularly in the past five years, has been fueled by digitalization and the advent of cryptocurrency. During the COVID-19 pandemic, online betting surged, with many punters turning to offshore accounts. 

According to Engelbrecht-Bresges, approximately 560,000 Hong Kong punters used illegal bookmakers last year, with 100,000 to 150,000 of them engaging in basketball betting alone. Legalizing basketball betting could draw a substantial number of these punters to the HKJC, thereby reducing the dominance of illegal platforms.

The illegal sports betting market is estimated to have a turnover of around HK$350 billion ($45 billion), with basketball accounting for 15 percent of the total. Legalizing basketball gambling could potentially generate a turnover of HK$52.5 billion ($6.7 billion), rivaling the turnover from football betting within the HKJC. 

However, Engelbrecht-Bresges noted that significant infrastructure investment would be required to set up basketball betting, estimated at HK$1.5 billion ($191.7 million) to HK$2.5 billion ($319.6 million). He also projected that the legislative process for legalizing basketball betting could take about 18 months, similar to the timeline for football betting legislation.