Club to sell the TT to the world

Taxation and competition from its own soccer betting will drive the Jockey Club to actively seek international markets for Hong Kong racing this year. The Club is planning to launch its product and its pools, and especially the Triple Trio, for world consumption, with the promise of billions in additional betting turnover.

The new approach was revealed by director of racing Winfried Engelbrecht-Bresges as he today celebrates five years with the Club. 'In the mid-1990s, the Hong Kong government introduced certain arrangements to give tax relief for exported products,' Engelbrecht-Bresges said.

'It applies exclusively to exports, so that bets coming into our own pools from overseas punters would attract lower taxation. We would then be able to use part of the money we would not be required to pay in local tax to offer a kind of agent's commission in the country where the bet originates.'

Engelbrecht-Bresges stressed that such arrangements would not run contrary to either the letter or the spirit of the much-vaunted Good Neighbour Policy championed by the Club throughout Asia to fight offshore poaching of turnover.

'This would fit into the Good Neighbour Policy, as one can say there is a benefit for both jurisdictions - jurisdictions which are prepared to be good neighbours,' he said, but added an ominous warning. 'Theoretically, you could also turn it the other way and say those who do not sign the Good Neighbour agreement and are not willing to respect intellectual property rights . . . well, looking after our own markets then one really might have to think about competing.'

Engelbrecht-Bresges said the overseas demand for Hong Kong's racing 'product' was very broad. 'We have had many discussions with people asking for our product - for our racing picture and especially for access to our huge betting pools,' he said. 'One of our advantages, besides the integrity, the quality of information and the competitiveness of our racing, is our pool size.'

Engelbrecht-Bresges hinted the market in Britain could be an ideal target for the Triple Trio. 'A journalist, Paul Haigh, wrote in the Racing Post 18 months ago the English tote was trying things like Scoop-6 and other new bets, but that the Triple Trio would be absolutely suitable and it is hard not to agree,' he said. 'Racing is recognised here now as a world-class product, and we think one we can really export. A bet like our Triple Trio would be unmatchable.'

This move to more proactive pursuit of new turnover was prefaced last week by the subtle change of Triple Trio events from races three, four and six to consecutive races. 'We moved to a format over races four, five and six, so it would concentrate the bet into one hour and make it more suitable for export,' Engelbrecht-Bresges said. 'We can also look at the expansion regarding win and place betting or other pools, and the taxation benefits.'

Taxation has been the sleeping giant issue within the Jockey Club as the threats from outside operators and alternative gambling opportunities have grown with the Internet. The Club had been lobbying quietly for structural tax changes to enable it to offer punters lower take-out rates, but those hopes were dashed when the government instead increased exotic takeouts at the last Budget.

Engelbrecht-Bresges said taxation for racing in Hong Kong had gained further importance with the looming threat from its own soccer betting. 'We are very mindful of soccer, which will have a better taxation situation than we have in racing,' he said.

'Yes, there is already this kind of competition - everyone knows how many people bet on soccer already through different channels, so it's not totally new - but now it will be channelled and marketed in Hong Kong officially through us and that will be a new level of competition for racing.

'And whether one likes it or not, to expand and compete with other gambling and gaming, one has to look medium term at the taxation situation.'