Time for tough talk on illegal gambling

PUBLISHED : Tuesday, 13 July, 2010, 12:00am
UPDATED : Tuesday, 13 July, 2010, 12:00am

There are some truths about gambling that Hong Kong needs to come to terms with: the first is that it cannot be made to disappear. The second is that legal gambling can serve the common good, while illegal gambling undermines it. That is not to say that betting, irresponsible or otherwise, is harmless; but we also need to come up with effective solutions to what seems to be a deep-rooted habit.

Police have unearthed evidence of spectacular growth of illegal gambling. This raises the question whether the Jockey Club's legal monopoly still best serves the interests of one of our most innovative and successful social enterprises. Through its non-profit franchise over betting on horse racing, soccer and lotteries, the club generates HK$8 billion a year in tax revenue and distributes more than HK$1 billion in subsidies to welfare and charity groups. It has been argued that it is in part because of this that Hong Kong has avoided becoming a welfare state.

Illegal bookmakers are uncharitable, except for betting discounts and bigger payouts designed to woo punters away from the Jockey Club. They pay no tax nor contribute to society.

We cannot turn a blind eye to the figures revealed by a police crackdown on illegal gambling during the World Cup soccer tournament, and a joint investigation with Guangdong police that smashed a cross-border betting syndicate. Betting records seized in Hong Kong during the World Cup up to the middle of last week totalled about HK$270 million, nearly four times as much as during the previous tournament four years ago. Police say the cross-border syndicate handled HK$8 billion in illegal bets by Hong Kong and mainland gamblers, mostly on soccer, in the past six months. These figures may only be scratching the surface of illicit gambling. Illegal bookmakers have moved with the times, swapping betting slips and phones for online servers here, on the mainland and in other places.

The Jockey Club faces many challenges, with young people less interested in horse racing, and global gaming empires transforming the industry and attracting new punters across Asia. It has struggled to compete or wring concessions out of the government, such as more race days and more flexible betting on major overseas horse races. Officials appear to be more concerned about avoiding antagonising the anti-gambling lobby of church and education groups that campaigned unsuccessfully against legalising soccer betting seven years ago. Yet any widespread gambling interest among the public that is not satisfied by the club is bound to become a goldmine for illegal bookmakers and organised crime syndicates.

No country has successfully stamped out illegal gambling, and it would be foolish to expect that the Jockey Club could, even with much looser reins. But given that gambling will continue regardless, we should at least, where we can, deny those dollars to organised crime, and channel the proceeds into the community. Other jurisdictions have got around the dilemma by licensing private gaming franchises, bringing them under regulatory control and into the tax net. Illegal operators are either crowded out of the market or have to accept a smaller market share. In a perfect world, the Jockey Club model might well socialise all gambling. In the real world, the community should have a serious debate about it.