Francis Neoton Cheung

Macroscope | Hong Kong wants to raise cash but taxing Jockey Club isn’t the right way

The club is already Hong Kong’s largest taxpayer and one of Asia’s top donors, with charity contributions outpacing growth during the pandemic

With higher taxes likely to eat into competitiveness and revenue, calls to raise betting duties will do little beyond earning politicians brownie points

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Crowds turn out to watch the Lunar New Year horse race at the Sha Tin racecourse on January 24. Photo: Yik Yeung-man

Francis Neoton Cheung

Published: 4:15pm, 30 Jan 2023

In the run-up to the Hong Kong government’s 2023/24 budget, political parties have been busy tabling proposals to revive the pandemic-hit economy and open new revenue sources for the city’s coffers.

Among them is a call from the New People’s Party to lift the football betting duty from 50 per cent to 80 per cent. The basis of the argument is that the Hong Kong Jockey Club (HKJC) should be paying more taxes from its increasingly high betting turnovers.

However, a closer reading of the facts exposes the flawed nature of this argument. First, HKJC is the single biggest taxpayer to the Hong Kong government, thanks to the betting duties levied on horse and football betting. In the 2021/22 financial year, it returned a record HK$33.6 billion (US$4.3 billion) to the community.

This sum consists of a record HK$27 billion in taxes and duties and HK$6.6 billion in charity donations, including HK$1.4 billion to fight the pandemic. As Asia’s top charity donor, it ranked ninth in The World Charity Index for 2020/21.

Although HKJC achieved a new turnover record of HK$290 billion in 2021/22, this needs to be put into perspective. Between 2011 and 2022, HKJC’s charity donations increased by 288 per cent. However, its net margin only increased by 96 per cent in the same period.

The growth of HKJCs charity contributions has far outpaced its business growth rate. Its charitable work, spanning elderly services, education, sports, and arts and culture, complements what the government provides and strengthens civil society collaborations.

Leong Cheung (second from right), executive director of charities and community at The Hong Kong Jockey Club, meets students from CoolThink@JC, an education programme funded by the HKJC. Photo: HKJC

Macroscope | Hong Kong wants to raise cash but taxing Jockey Club isn’t the right way

The club is already Hong Kong’s largest taxpayer and one of Asia’s top donors, with charity contributions outpacing growth during the pandemic With higher taxes likely to eat into competitiveness and revenue, calls to raise betting duties will do little beyond earning politicians brownie points