The Government's response to the now-established industry of Internet gambling calls to mind the image of King Canute ordering the tide to halt. Canute, of course, carried out his demonstration to display the limits of his regal powers. The SAR Government, however, seems to take the view that any law, even if it is unenforceable, is better than none. As our story today shows, Internet sites are already targeting punters here, and no threatened legislation in Hong Kong is likely to persuade them to ease up. The Government's proposed Gambling (Amendment) Bill, which will make it illegal for people in Hong Kong to place bets with offshore Internet sites, does nothing to address the real issue - the huge loss of government revenue caused by such sites. The way to approach the problem is not to restrict punters but to review the whole management of legal betting in Hong Kong and adapt the system to take advantage of the opportunities offered by the Internet. Despite calls for this process to take place, there are few signs that it is happening. The Jockey Club has urged the Government to alter the way gambling revenue is raised; and this, in the face of market forces, is the only sensible route to take. Tax on turnover should be replaced by a tax on profits. A profits tax would almost certainly increase turnover and therefore increase government revenue; more crucially, it would allow the Jockey Club to compete with the cut-price inducements of illegal bookmakers. At present a person placing a wager on a Hong Kong race must pay 19 per cent in tax. If that figure was reduced significantly, the Jockey Club would certainly be able to compete with illegal operators because it has a brand with integrity and it represents trustworthiness. Without such a reduction, there will simply be no contest for many gamblers. The Jockey Club conservatively estimates that between $40 and $50 billion is lost each year to illegal bookmakers. That figure is almost certain to grow. What is needed is a bold government initiative, not an inadequate attempt to hold back irresistible forces. The Jockey Club should be allowed to take bets from Hong Kong and around the world via the Internet, as well as accept bets on other sports, most notably soccer, betting on which is growing exponentially. Without such affirmative action all Hong Kongers - punters and non-gamblers alike - will continue to see billions of dollars of lost revenue go overseas.