The current rate of tax on net stake receipts is set at 50%. However, the NPP proposal would increase this rate to 80%. Consequently, the HKJC (Hong Kong Jockey Club) would be required to pay a significantly higher amount in tax. The HKJC estimates that if the duty change is approved, its tax payments would rise from the current amount of HK$25.00bn (£2.58bn/€2.94bn/US$3.19bn) to HK$31.00bn. Additionally, revenue would decline from HK15.00bn to HK$9.00bn, reflecting a 40% decrease. This proposed increase in tax rate threatens the HKJC’s ability to invest in the future and contribute to the community. It is also important to note that changes in consumer behavior can occur swiftly in response to tax increases or even the perception of such changes. The betting industry is particularly sensitive to price changes, and any alteration of tax rates could result in significant shifts in demand.
It is worth mentioning that the HKJC is currently the only licensed betting operator in Hong Kong. However, it faces competition from offshore brands that operate illegally without a license and are not subject to tax duty rates. The high betting duty rates in Hong Kong already make it the highest in the world. Increasing the football betting duty would further disadvantage the HKJC, leading more people to bet with illegal and offshore bookmakers. This proposal by the NPP exhibits a lack of understanding regarding the competition in the wagering market and the HKJC’s investment and business. It would cause irreversible damage to Hong Kong, destroying the club’s longstanding and successful business model, and undermining Hong Kong’s global reputation as a leading racing jurisdiction. In addition, it would jeopardize the public interest of Hong Kong.
