It's time to let everyone join the rebate party
With three meetings to run, we can confidently predict that betting turnover for the season will wind up rising for the first time since the handover and by around HK$3.8 billion, give or take some change, in a solid victory for the tax reforms introduced last September.
The hard-won reforms led to a rebate for punters which was hardly ideal in its implementation - applying as it did only to tickets carrying a bet value of HK$10,000 or more and to the four major betting pools - but the turnover rise of 6.2 per cent is certainly significant in terms of the trend reversal and as a first step to further improvement.
For most of the season, the figures were indicating a significantly smaller increase - looking perhaps more like four per cent - but the upwards motion of the graph has accelerated in the final months of the season.
One theory put forward for that was that punters had enjoyed good results towards the end of the European soccer season. We could put forward another, given that favourite punters have backed more winners than ... well, actually we don't know when, but definitely more than since the handover. They've had a picnic.
Already 204 of 696 outright favourites have won this season and it isn't finished. None of the last nine seasons has produced more than 200 winning favourites and, more meaningfully, the favourite success rate of 29.31 per cent is the highest in the past decade.
So, while the average favourite's price has been lower than all but one of the past 10 seasons, just blindly betting the favourite has shown a loss of 15.7 per cent - considerably better than the 17-24 per cent range of the past three or four seasons.
Throw in the rebate and that becomes more like an 8.6 per cent loss without a minute's form work. Hey, people probably lose quicker than that on the stock market.
But any reasonable theoretical model of the rebate would probably conclude that an accelerated rise is what is supposed to happen anyway.
That 10 per cent rebate on lost bets has its real effect over a period of time rather than a meeting or two, whether for a HK$10,000 or HK$100,000 punter. Or even for a $10 punter.
Accrued losses are a little smaller, while wins build at the same rate so the net outcome would result in a larger bank and more confident outlay over time.
At this column, we believe that a superior effect on turnover would result from a 10 per cent reduction of pool takeouts than the rebate, but clearly the Jockey Club took whatever improvement in its business model it could get across the legislative line.
We'd like to think that one day soon the possibility of a reduced takeout would be out there but in the shorter term, the next step is for the rebate to be available to more punters.
Those who felt the HK$10,000 threshold for rebateable tickets ensured this was a redirection of illegal wagers rather than an encouragement to gamble, should probably consider how many HK$1,000 punters there are out there still getting 10 per cent or more in rebates from illegal bookies - in addition to credit, which is the real creator of social problems - and who are being left out of the Jockey Club rebate scheme.
Having shown the bean counters that the theory is correct - take less and you get more turnover - the Jockey Club nevertheless has revenue guarantees made out to the government which require more of an increase than achieved this season or at least a consistent repetition of that performance into the future.
Thus, the worth of this season's result will be in what kind of leverage it gives for further discussions, and actions, along the lines of growing the Jockey Club's business.
The club must continue to press for wider application of the successful rebates - an idea which has shown itself correct and worthy in the immediate term.
Sure thing
The number of outright favourites who have saluted the judge so far this season: 204
