Taxing betting profits rather than turnover would enable the Hong Kong Jockey Club to recoup up to $24 billion a year from illegal bookmakers, chairman Ronald Arculli said yesterday. This would return annual racing revenue to about $80 billion. But in revealing details of proposals to revitalise the sport, Mr Arculli insisted the club would not compete with illegal bookmakers by offering discounts or credit. It is estimated that illegal bookies rake in between $50 billion and $60 billion a year. The club is confident it can bring 30 to 40 per cent of this into the taxation net if the duty structure is reformed. 'If we do not do anything, our turnover will keep dropping over the next three to four years. The government's betting duty revenue will also fall to about $6 billion,' Mr Arculli predicted. He was speaking at a media conference at which he welcomed the agreement reached with the government on the Jockey Club's proposed reforms. The proposals were put to the Legislative Council home affairs panel yesterday for discussion. According to the government - which levies a 12 per cent tax on standard bets and a 20 per cent duty for exotic bets - the revenue it receives from bets on horse racing declined from $11.2 billion in 1999-2000 to $8.78 billion in 2003-04. It expects this to fall to $6.15 billion by the 2007-08 season. The Jockey Club's turnover on bets has shrunk by almost 30 per cent over seven years, to about $65 billion in 2003-04. Without the reforms, annual turnover is projected to drop by another 30 per cent to about $45 billion by 2007-08. Under the proposals, the government would progressively tax annual betting profits, starting at 72.5 per cent for amounts up to $11 billion. To ease concern about the club's ability to boost turnover, the government would be guaranteed duty of at least $8 billion in each of the first four years of the reforms. Mr Arculli said some flexibility in tax rates would be allowed 'depending on market conditions' to make up any possible shortfall. Other measures to squeeze out illegal bookmakers include extending the domestic racing season by five days. Mr Arculli did not indicate a timetable for the changes but said a longer 2005-06 season would be possible if Legco approved the reforms by early next year. He predicted the club could maintain its $1 billion annual donations to charity and insisted there would be no job losses or reductions in pay.