Hong Kong Jockey Club vows not to sack any employees despite forking out HK$12 billion over next 5 years for special football betting duty
- Club also promises to uphold donation commitment of no less than HK$4.5 billion annually over five-year period of government’s proposed levy
- Pledges follow finance chief Paul Chan’s call during budget reveal for special football betting duty to help replenish government’s coffers in short term
The Hong Kong Jockey Club has pledged not to sack any of its employees despite a government plan to impose a HK$12 billion (US$1.53 billion) special football betting duty on the organisation over the next five years.
The city’s sole gambling operator also vowed on Thursday night to continue donating no less than HK$4.5 billion annually over the next five years, echoing its past commitments in recent years, according to a companywide email seen by the Post.
The club made the promises following Financial Secretary Paul Chan Mo-po’s budget speech last Wednesday, which included a proposal to levy a five-year special football betting duty on the organisation that requires it to pay HK$2.4 billion each year to help increase the government’s revenue in the short term.
Hong Kong Jockey Club warns of unlicensed competition emerging under betting duty
In response to the move, the gambling operator last week said it would pay the betting duty over the proposed period but opposed any permanent levy increase, arguing it could lead to offshore and unlicensed rivals swooping in on business.
In Thursday’s email, club chief executive Winfried Engelbrecht-Bresges wrote: “Despite the challenging environment, we are committed to the employment of our people. The club will not implement any redundancies because of the [special duty]. However, we need to manage our costs prudently.
“For this reason, I appeal to all of you to work more efficiently and more collaboratively. We must utilise our resources wisely and strategically.”
The organisation also said it understood the financial challenges faced by the government and the rationale behind Chan’s proposal, since the city was still on the road to economic recovery, with many livelihood issues yet to be addressed.
Engelbrecht-Bresges said the club would maintain its regular donation levels as NGOs were struggling to secure funding to address social needs.
“To do so, we will have to dig into our reserves as the contribution from the club to the Hong Kong Jockey Club Charities Trust will be reduced due to this additional tax,” he wrote.
An earlier check by the Post found the club had HK$24.6 billion worth of reserves and HK$37.3 billion in a contingency fund as of June 30 last year. As a non-profit organisation, the club said it had donated 90 per cent or more of its operating surplus after tax each year to its charities trust.
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On a business front, Engelbrecht-Bresges promised to invest in world-class racing products, channelling funds into areas such as prize money, technology advancement and the development of the Greater Bay Area and human resources.
The bay area refers to Beijing’s ambitious initiative to integrate Hong Kong, Macau and nine other southern Chinese cities into an economic and business hub.
“Despite the significant impact of the [special duty], I am optimistic about our future. We have weathered the pandemic crisis together … we will once again rise above the challenges and emerge even stronger,” he said.
Offering a rationale for his special betting duty proposal, finance minister Chan last week said he was confident the move would not burden the club and had taken into account the organisation’s financial situation.
