The Executive Council yesterday endorsed betting tax reforms, introducing a long-sought switch from a turnover-based tax to one based on profit, after concessions by the Jockey Club. The club has guaranteed the government revenue of at least $8 billion a year for three years, after which the tax system will be reviewed. Winfried Engelbrecht-Bresges, the Jockey Club's executive director of racing, said it was 'positive news' and it appeared it had 'cleared the first hurdle'. Political parties are expected to back the reforms but concern groups still strongly oppose the change, saying it will encourage problem gambling. The club hopes the system can be implemented in September when the new racing season starts, but that can only happen if lawmakers pass the bill before the July summer break. In an effort to win the support of Exco and Legislative Council members, the Jockey Club withdrew a proposal for an extra five race meetings a season, which had been fiercely attacked by political parties, especially the Democratic Alliance for the Betterment and Progress of Hong Kong. The club will keep the present 78 race meetings each season. In an effort to increase turnover, the club will introduce a 10 per cent rebate for punters who have made a single bet of $10,000 or more. This means that for a $10,000 bet, the loser needs to pay only $9,000. The club hopes the discount can combat illegal operators and increase its betting turnover, particularly from professional punters. It is understood the government originally planned to table the bill to Legco last year, but Chief Executive Donald Tsang Yam-kuen stopped the process as there were not enough votes supporting it. 'The government has the confidence to go ahead now because the problems have been solved,' a government source said. Last season total betting duty paid to the government from horse racing fell 4.9 per cent to $8.35 billion, the lowest revenue paid in recent years. Turnover has fallen each year since the 1999-2000 racing season, when the club paid $11.2 billion in betting duty, 25 per cent more than last season. The Jockey Club has been keen to introduce changes to lure punters away from illegal bookmakers offering more attractive bets. 'We have not been officially told of the Executive Council's approval, but assuming this is right it is positive news that we have cleared the first hurdle,' Mr Engelbrecht-Bresges said last night. 'It's a very important piece of legislation because it secures the future of horse racing in Hong Kong and will give the Jockey Club the ability to regain market share that has been lost to illegal operators. 'It merely modernises the way racing is taxed and brings it more into line with most other forms of business,' he said. A government spokesman had no comment and said an announcement would be made soon.