Stand on any corner in the teeming streets of Hong Kong and chances are that you can see the benevolent hand of the Jockey Club at work, perhaps without even realising it. The pre-handover joke that Hong Kong was run by the Jockey Club, Hongkong Bank and the governor, in that order, was never entirely made in jest, and little has changed since the departure of the governor and a return to China almost 13 years ago - the club's huge footprint covers even residents with no interest in horse racing. The club still features many business and political leaders on its board of stewards, and there are those who say the club gets too many 'inside runs'. When legalised gambling on soccer matches was approved by the government in 2003, the Jockey Club was the only choice to operate it, despite the cries of a handful of critics who believed the club held too favoured a position. 'There must be very few people who genuinely think the government does too much for us,' the club's chief executive, Winfried Engelbrecht-Bresges, says. 'For one thing, we pay a 72.5 per cent gross profits tax, the highest in the world. Compare that rate with 15 per cent in the United Kingdom, for example.' And whatever the government does for the Jockey Club and its 'not-for-profit' operation of horse racing, soccer and Mark Six gambling in Hong Kong, the community is ultimately the beneficiary. In the 2008-09 racing season, the club generated turnover of HK$67.65 billion from its world-class racing alone. With a total of HK$110.98 billion for all business operations, the winner was Hong Kong. 'We are the biggest taxpayer and the HK$13 billion we paid last year equates to 8 or 9 per cent of Hong Kong's tax income,' Engelbrecht-Bresges says. 'Our charity contribution was another HK$1.37 billion and on top of all of that comes everything else that we do for the community.' That the Jockey Club shoulders such a large part of the bill every year helps keep the tax rate for individuals and companies at a low level, which in turn has helped Hong Kong businesses to be highly competitive and lure talented professionals from countries with higher tax rates. 'Without us, Hong Kong would be a different place, and I think the public recognises this and that's why we have such a high approval rate,' Engelbrecht-Bresges says. 'On top of the tax paid and our charity donations, there are other specific Jockey Club projects which benefit everyone. There would be no Rugby Sevens if we had not built the Hong Kong Stadium. There would have been no Olympic equestrian events here if we had not put HK$1.2 billion into that. No Ocean Park. No Victoria Park.' The club is also engaged in the multibillion-dollar project to conserve the historic Central Police Station site and turn it into an arts, culture and tourism hub that will become another iconic destination in the city. 'And we look forward to continuing with other contributions too. We strive for a better quality of life for Hong Kong, besides being one of the best racing and entertainment organisations in the world. This dual role as a sporting organisation, which also creates community benefits, is what makes us unique.' Now, the club is again reaching out to the government for a positive hearing over the taxing of bets sourced from overseas, so it can join the world's 'commingling' revolution and tap the billions of dollars already sloshing around in betting operations on Hong Kong in far-flung places. 'We know there is about HK$3 billion already being bet on our racing in separate pools around the world,' Engelbrecht-Bresges says. 'From our research, we believe this could double once commingling becomes a reality, because a lot of countries are not taking our racing but are extremely interested if we can sort out the double-tax issue. That HK$6 billion would grow our pools here by another 8 per cent, which would have a flow-on effect and grow it further.' Double taxation has been a considerable speed bump to Jockey Club progress, or even a start, on commingling, or cross-jurisdictional betting (see sidebar), regarded worldwide as the great hope for growing the betting action that generates racing's incomes everywhere. For example, the club has had agreements in place for the past couple of years with casinos in North America to accept betting on Hong Kong races, but it has yet to begin. 'The problem is that our government has wanted its full duty from bets placed overseas on our racing and then transferred into our pools here,' Engelbrecht-Bresges explains. 'That stops the situation being viable for the overseas operator, who has his own government duties to pay and still wants to make a profit too. Until it changes, we can't go forward.' So, while aggressive jurisdictions such as South Africa and France have already charged down the commingling path with zeal, the Jockey Club has been left behind, wearing out shoe leather on government hallways to make representations on why duty payments should be varied in order to undertake what is essentially an export of the brilliant racing product Hong Kong has built up over the past four decades. From a third-rate standard in the early 1970s, Hong Kong now boasts world-class horses, jockeys and trainers as well as the massive betting handle that has long been the envy of the rest of the racing world. Commingling would mean not only a lift to the standard betting pools, but a chance to take Hong Kong's Triple Trio to the world as the Holy Grail wager most racing jurisdictions have sought in vain. Picking the three placed horses in each of three nominated races is paradoxically simple enough to be understood by anyone, yet difficult enough in the very competitive, handicap racing environment of Hong Kong to produce life-changing dividends. A group of 10 nations tried to introduce a Global Bet with cross-pooling in 2008, operating a trifecta (or tierce, as selecting the three place-getters in a race in correct order is known in Hong Kong) on a major race. The success of the venture could be generously described as very limited, partly due to the absence of Hong Kong participation and partly because the design of the bet was completely wrong. The Triple Trio could be a different matter, though, with existing multimillion-dollar pools soon boosted by new funds from foreign sources via commingling. The way the taxation changes would work is: currently, a HK$100 win bet in a Jockey Club pool has the house cut, or takeout, of around 18 per cent removed before the remainder is distributed amongst the winning bettors. That 18 per cent goes to pay duty, the club's expenses in staging the racing and betting, and the end-of-season surplus that is returned to the community through charities and other good works. While the numbers still have to be worked out, even after the anticipated approval in principle by the government, a rough example of how things would change might be that half, or even two-thirds, of that 18 per cent would go to the overseas operator where the bet was placed, with the operator's taxes, costs and profit to come out at that end. The remainder would be divided up between the government and the Jockey Club, with both taking a much smaller cut than from a locally bet wager in exchange for accessing a huge global market. 'Without this compromise it would be impossible, but I think we have made a really good case which is now being understood,' Engelbrecht-Bresges says. 'I am now optimistic that we will have a tax change before the end of this season and that we will be ready to start commingling operations from the beginning of the new season in September, and this will have benefits for our government, for our community, for the club and for racing worldwide.'