HKJC tax rate.

[Scarper]

Most people are aware that the jockey club is being put under presure from illegals and soccer to reduce their take in order to stay competitive.
However to do so across the board is a big step - especially if the declining racing pools are not suffering as much as people think from the above mentioned evils.
So why dont they run an trial only on the win and place pools. they could reduce the takes in these to say 10% and monitor t/o.
any thoughts.
[ September 03, 2002, 06:18 PM: Message edited by: Scarper ]

[VINCENT]

A tax cut worked in other racing jurisdictions, so have to agree with Scarper. But will the stubborn Chinese see the light?

[Horny Harry]

I rememebr once in Austrlia, the TAB was forced to offer reduced tax takeouts on win and place betting on selected races due to a big increase in first four betting ( which is like a trifecta but you have to pick the first four instead of the first three and where the tax rates are higher than for most forms of exotic gambling)
Due to some clause that limits takeouts to a set overall maximum, the takeouts on win and place betting were reduced to around 10 percent for several races ( win and place betting) on a Saturday and a Sunday to compensate. However I dont think people bet more on the reduced takeout races but continued much the same as always...in other words bet on anything and everything. Perhaps some of the pro's had a go though.

[jb]

Great idea , worth a go!

[hobbes]

the scenario HH describes happened for the month of april last year on the NSW tab ( it was to reduce their overall take to the maximum allowed by legislation ) so we agree thus far.
i think it did lead to a moderate increase in T/O but could post on TNHRF to see if anyone remembers more accurately.
politicians very, very rarely hand back any tax revenues they have become addicted to and like many gov'ts worldwide i suspect those here are addicted to the revenue from horse racing. in the current difficult economic climate it would be a miracle if they were to even contemplate reducing their grab let alone anything as drastic as a profits tax.
agree with scarper that the introduction of soccer betting is likely to decimate HKJC turnover and lead to a large decline in gov't revenue from gambling. i seem to remember the JC making some sort of neutral statement on the subject of legalising soccer betting recently, but the reality is they should be lobbying to the utmost against it, as it will significantly reduce the T/O on racing and could eventually lead to its demise.

[Smithers]

RACING
UK betting trend a lesson for HK
NICK PULFORD, Racing Editor
-------------------------------------------
While betting turnover here continues to slide, the story is not the same in Britain, and some of the reasons may be instructive for those grappling with Hong Kong's problems.
Britain's "Big Three" bookmakers have all returned substantially improved turnover results since betting tax was abolished there last October.
The latest figures came from William Hill on Monday, showing turnover for the first six months of the year up 47 per cent on the comparable period last year and profits up 32 per cent.
Even allowing for the fact the 2001 figures were distorted due to the outbreak of foot-and-mouth disease which caused widespread cancellation of racing, the increase provides the latest evidence that abolishing betting duty for a tax on profits does have a beneficial effect on turnover - an argument the Hong Kong Jockey Club has been advancing over the past two years, so far without success.
Leaving aside the 2001 figures, what this week's William Hill results mean is that turnover in Britain this year could be heading towards a 60 per cent increase since 2000. But, while the change in the tax regime is playing a substantial role, there are other factors at work which Hong Kong would do well to heed.
The soccer World Cup was a boost to the British betting industry, with William Hill reporting the event alone provided three per cent of its turnover for the first half of this year (or, on an average basis, more than 20 per cent of its turnover for the month of June) and almost one-sixth of the profit. What Hong Kong would have given to have the same benefit, instead of suffering a 10 per cent downturn in racing turnover at the five meetings held during the World Cup in June.
As well as a new tax regime, then, Hong Kong needs betting diversification to reverse, or at least hold back, the turnover decline. It is surely no coincidence that Hong Kong's turnover has been falling at a time when other countries have seen an explosion in betting on soccer and other sports - a benefit denied through legal channels in Hong Kong due to intransigence on the soccer betting issue.

[Scarper]

turnover up 47%. this is even more amazing given the rise of the P2P sites such as betfair.com which will have taken a significant number of punters from them.
HK needs to do the same.

[boner]

Actually the NSW TAB effort did not lead to any increase - bar one or two single races and that could have been attributable to other factors too - and was regarded as a failure.
But it was a piss poor attempt, poss designed to fail - using just a few carnival meetings, win pool only - and really could not be included in any assessment of the effect of lower t/o on t/over.