The Hong Kong Jockey Club last night warned the government that failure to reform the way horse racing is taxed will result in a further drop in revenue next season. Chief executive Lawrence Wong Chi-kong announced yesterday that the club's annual racing turnover for 2003-04 was $65.02 billion - down 9 per cent on the previous season. It was the seventh successive drop in turnover since the industry peaked in 1997. Turnover for yesterday's final meeting of the season at Sha Tin was $1.12 billion - down 16.1 per cent on the $1.33 billion wagered at the same meeting last year. Pulling no punches at the traditional end-of-season press conference, Mr Wong emphasised that the average tax of 13.5 per cent on all bets in Hong Kong was the highest in the world. 'The current tax structure was put in place more than 30 years ago and is now totally out of date,' he said. 'Illegal betting is still rampant but we are simply unable to compete with them. They [illegal bookmakers] have no overheads, pay no betting tax and therefore can offer customers discounts of up to 15 per cent, as well as offering credit facilities. 'Tax on wagering was 8.5 per cent in 1974 and has now grown to 13.5 per cent, while during the same time frame the Jockey Club's commission has come down from 9.1 per cent to 5.4 per cent - one of the lowest in the world.' Mr Wong said the Jockey Club would pay the government $8.796 billion in betting duty from horse racing alone this season - down 7.8 per cent on last year. The club would announce the results of its first full year of soccer betting at the end of Euro 2004, he added. Earlier this season, the Jockey Club put a comprehensive proposal to the government recommending major reforms to betting taxes, as well as the elimination of discriminatory legislation giving soccer betting marketing and management advantages over racing. 'What we want to do is pay tax on the bottom line, rather than the top line,' Mr Wong said. 'We are recommending that racing is taxed on profits. 'There would be so many advantages. We would be able to enhance our ability to compete, and we could then tackle the illegal and offshore operators. 'Punters would get bigger dividends, the Jockey Club would gain, the Treasury would get more tax revenue and the charities of Hong Kong would get more. In short, all the Hong Kong public would gain.'