It pays to crack down on illegal bookmakers
World Cup football is a defining event in this gambling-mad city. The finals come around only once every four years and the next one kicks off in Germany next month. World Cup fever lasts for a month and infects regular punters and non-punters alike. The gambling industry's customer base expands dramatically.
In the past, illegal bookmakers and bookmaking syndicates have been the only certain winners. Following the legalisation of football betting with the Jockey Club in 2003, the club and the government are now football-fever stakeholders who can rub their hands in anticipation. The club, which makes charitable donations of $1 billion a year, is assured of a boost to its turnover and profit, and Financial Secretary Henry Tang Ying-yen can count on a betting duty windfall.
Sadly, however, taxpayers and the community at large will be losers as well as winners.
An untold fortune will still be wagered with the illegal gambling industry; it will not be taxed nor return a social dividend through charity.
The illegal operators use this financial advantage to attract clients with more attractive betting odds than the Jockey Club's, discounts and credit betting.
As our report today says, the Jockey Club estimates that its own football betting turnover this year will reach about $30 billion - equal to half its turnover on horse-race betting - without taking into account the boost from the World Cup. The latest estimate for illegal football gambling turnover, in 2003, was $30 billion to $50 billion. The amount lost to government revenue through illegal football and race betting runs into billions.
The police say enforcement of the law against illegal soccer gambling - especially syndicated bookmaking - remains one of their major tasks and involves intelligence-led operations.
The number of police soccer-betting raids peaked in 2002, the year of the last World Cup, with 74 operations, 131 arrests and $59 million in cash and betting slips seized. Last year there were just 24 raids, 44 arrests and $28 million seized. These figures are no more than a scratch on the surface of the illegal gambling industry.
The Jockey Club acknowledges that combating illegal gambling is not easy. Given that modern information technology has made bookmakers more mobile and their operations more sophisticated, the club believes that law enforcement needs to be supported by more effective education to raise public awareness of the social cost of betting with a bookmaker or placing a bet overseas.
Considering Hong Kong's passion for betting on horse racing and football, it is tempting to feel reassured that illegal gambling is a victimless crime - if it were not for its association with debt, loan-sharking, corruption and triad activities.
What makes this more worrying is that football betting is the growth area of gambling and younger people prefer it. Illegal operators are getting a bigger share of business from young beginners than is healthy for society.
The anti-gambling lobby may be concerned about the growth of gambling generally, but it would be sensible to throw its weight behind the case for more vigorous enforcement of the law against illegal operators. At least the Jockey Club returns a social dividend, including support for counselling services and educational projects.
Under recent betting duty reforms, the club's contribution to the treasury cannot be less than $8 billion a year, a sum equal to more than half the government's budget surplus for the last financial year.
That surplus was bigger than expected, but Mr Tang has resisted calls for increased welfare benefits and tax rebates.
The World Cup is a reminder that he might have more money to dispense if efforts to combat illegal gambling and raise the Jockey Club's market share were more vigorous and effective.
