'We would like to have done more but this is a good start,' says betting chief Big punters were the only winners in yesterday's announcement of the flow-on benefits from horse racing's recent tax reform, with the introduction of 10 per cent cash rebates on losing bets of HK$10,000 or more on just four bet types. With the Jockey Club fearing a backlash from the anti-gambling lobby if it lowered take-out rates, smaller punters were given zero benefit in the restructuring. They will still suffer an excessive take-out of 17.5 per cent on every dollar bet on the 'normal' wagers and 25 per cent on exotics, such as Tierce, Six-Up, Double Trio and Triple Trio. Jockey Club executive director of betting Henry Chan Shing-kai (pictured) was the man handed the onerous task of selling the limited changes - which will be implemented for the opening day of the new season on September 10 - to the betting public. 'We would like to have done more, but this is a good start,' Chan said. 'The most pressing thing is to try to claw back some of the money that is currently being bet with illegal bookmakers. This is our focus. 'Our research shows that 80 per cent of the money being placed with illegal bookmakers is done in bets of HK$10,000 or more, so this is the reason we came up with the HK$10,000 threshold for the rebates.' Punters who take bets of HK$10,000 or more on four key pools - Win, Place, Quinella and Quinella-Place - will be eligible for a 10 per cent rebate on losing bets. The rebates are one of the marketing edges illegal bookmakers have traditionally enjoyed. They pay punters the same dividends as the Jockey Club, but offer rebates generally of 10 per cent, but sometimes as much as 15 per cent on losing bets. A 10 per cent rebate on losing bets would represent approximately an eight per cent boost in profit on turnover for any professional player - a massive advantage and one that will be seized by punters at this level. The club needs a turnover boost on racing of HK$10 billion (16.7 per cent) this season to avoid making up a shortfall in guarantee to pay the government a minimum HK$8 billion in tax and seems very likely to achieve it. The upper range of Chan's admittedly conservative estimates means HK$12 billion more turnover in 2006-07, but he's hoping it may exceed that. And all of it, he says, is expected to come from punters who were betting with illegal bookmakers. When the Jockey Club first began campaigning for reform of the way the racing business was taxed, about three years ago, the prime argument was that a take-out rate of 17.5 cents in the dollar was just too high, and made Win and Place wagering, in particular, uncompetitive with other forms of gambling. How ironic then that post-reform the take-out rate remains unchanged, because moving it downward as a business tool to win back turnover that has been progressively eroded over the past decade, has become politically too hard. The anti-gambling lobby wins yet again. The club will, however, now have to face up to criticism that it has discriminated against an army of middle-value customers who have been given nothing from the reforms. For example, who is the bigger customer - the one who bets HK$20,000 across a series of bets or the punter who has one single bet of HK$20,000 to win? Of course, they represent the same level of business but only one will receive a HK$2,000 rebate if the horse(s) loses. The highly charged political atmosphere saw Chan defending the club's effort in providing legal outlets for gambling without encouraging it. The club has, however, not ruled out the possibility of a future tinkering with take-out rates and the way in which rebates are administered. 'Today's announcement I would describe as a good start,' Chan said. 'For the rest, we just need to take it step by step.'