On the Rails

The Lunar New Year meeting at Sha Tin said a great deal about the state of racing in Hong Kong, the demand for it and the place it holds in the Chinese psyche.

According to the Jockey Club, some 1.1 million calls were placed to Telebet on Saturday, we had a boom crowd on course and the best turnover for a decade on the most popular day's racing of the season.

A mood of spirited optimism permeated the day to match the weather and the good quality racing. Even having the main event fall in an upset to Dim Sum proved a bonus as winning jockey and full-time showman Olivier Doleuze dropped to his knees and kissed the track to the delight of fans.

The big crowd of 89,000-plus at Sha Tin held its own stories. One was undoubtedly the police presence on the off-ramp into the racecourse from the highway that slowed traffic to a crawl, even kilometres from the track.

While the ramp has clearly become something of a revenue raiser for police at just about every Sha Tin meeting, we thought they might have given it a day off, knowing that a big crowd would be expected and that the off-ramp trap would exacerbate what would likely be difficult traffic conditions anyway. But that was not to be and an excruciating approach eventuated.

As to the crowd itself, well the giveaways at the gate do have an effect on attendance figures, and saved club officials from having to revert to the house full sign in the early stages of the day. The crowd of 89,000-plus exceeds the Sha Tin safety limit of 85,000, but it is a figure for the number of people who attended the track at some stage during the day, not necessarily all at the same time.

Officials believe several thousand of the early comers disappeared, giveaways in hand, after just an hour or two at the track. The churn factor.

The Jockey Club's marketing of merchandise - caps, teaspoons, etc - was more enthusiastic than usual and received a payoff, with almost HK$1 million worth of souvenir items sold, and the feeling was one that bodes well for racing's continued appeal.

Which makes the growth of legalised mainland 'betting' an interesting topic indeed, even though it does not involve horse racing at this time. In fact, there is no solid indication horse racing is about to be approved for anything but exhibition purposes, but there is legalised gambling with a Hong Kong Jockey Club connection and it is going to quickly generate some serious numbers.

The Jockey Club has been an adviser to the China Sports Lottery in setting up an estimated 13,000 betting shops, which hold lottery bets on NBA basketball (putting the mainland ahead of Hong Kong) and on major soccer leagues in Europe.

Bets cannot be made on individual matches but only on combinations of at least three games, there is only cash betting available and players have a whopping 32 per cent standard lottery takeout with which to contend.

We understand the Jockey Club, which is involved in both running the software and the risk management approach, has suggested a takeout of 20 per cent might be more appropriate for the sports lottery product. Still tough work for the players but, doubtless, going to good causes.

Elsewhere on the mainland, British firm Ladbrokes is involved in a product linked to lotteries on Formula One racing - we understand both real and computer-generated races are on the menu.

Even as close at hand as Hainan, where a huge illegal lottery is believed to operate, provision is being made for a style of legal sports betting that might be more recognisable to Hong Kong punters.

The bottom line seems to be that the icy view of betting, or sports lotteries at least, is suffering some global warming effects in Beijing.

Macau's casinos have been doing high fives to celebrate the return of the boom times. The 33 licensed casinos booked a record 188.34 billion patacas in revenue last year, up an unprecedented 57.8 per cent from 2009, while a parallel report mentioned arrivals to Macau from the mainland had also increased significantly.

And all of that may have something to do with the thawing on legal mainland sports lotteries - let's call them, say, gambling.

Tens of billions of US dollars are leaking into Macau casinos. What comes out the other end as profits for the casinos might largely end up in their home territories overseas, be it the US, Australia or wherever.

Like the successful restructuring of the Jockey Club's taxation and betting several years ago in an effort to protect its revenues from illegal operators, the loosening of legislative bonds on these lotteries anywhere is surely a test case, with the central government exploring ways of doing the same as an exploding middle class looks for ways to enjoy its new wealth.

As we saw on Saturday, horse racing's appeal has not waned in Hong Kong. The prohibition of racing and gambling on the mainland has more likely driven the money that might have been directed that way in a different direction.

Any change of attitude to expanding legalised betting, of any kind, must be read as an attempt to channel Chinese money leaking into legal avenues in Macau or illegal back alleys in Hainan or wherever else, back into a process that will see the money used for good where it is initially generated. In China.

No, it isn't horse racing on the mainland, El Dorado of many a racing professional in Ireland, England, Australia, New Zealand or the United States.

Not racing as we know it. Not close, not even a vague and shadowy intimation of it, but it is the change of official attitude that is the story, not how it currently manifests itself.