One of the most famous horse racing betting institutions in the sport’s history, and the sixth-largest charity donor on the planet, is facing troubling times ahead due to a number of competing factors and changing habits among the younger generation. Can this venerable institution, with a history that goes back more than 130 years, move with the times to remain relevant in the modern world of online gambling and increased competition?
About the Club
The Hong Kong Jockey Club (or HKJC, as it is commonly known) is one of Hong Kong’s oldest institutions. Founded in 1884, it operates horse racing events and runs a members’ only club that offers gambling entertainment to its 23,000 patrons on both the races and overseas football matches.
The club also runs a national lottery and has a government-granted monopoly on the betting industry. It is Hong Kong’s largest taxpayer, and as a not-for-profit organization, it donates all surplus revenue to charitable causes. In 2014, it donated an astonishing HK$3.6 billion (US$4.6 billion) to community projects.
What’s the Problem?
If times are so good, why are commentators suggesting that the HKJC is facing tough times ahead? The reasons are threefold.
For one, the club is heavily reliant on its “captive market,” thanks to the monopoly status that it holds. This is severely threatened by the growing underground gambling scene both in Hong Kong itself and on the Chinese mainland.
Secondly, there is the looming threat of neighboring Macau. Dubbed “the gambling capital of the world,” its casinos generate revenues that dwarf even those of Las Vegas. Macau is the only place in China where casino gambling is legal, and while Chinese residents have been severely constrained in the past by how much they can wager, it appears that the government’s stance is softening. Casinos in locations such as Singapore have already felt the pinch, as Chinese high rollers have started to abandon them in favor of Macau, and for Hong Kong, the effect will be even more severe, particularly when the Hong Kong–Zhuhai–Macau Bridge opens in December. This will mean residents will no longer have the inconvenience of an hour-long ferry journey to reach the neighboring island.
The third factor is an even more challenging one. Betting on the horses is seen as an old man’s game in Hong Kong, and the young generation is simply less interested.
The HKJC has recognized the need to move with the times, by reaching out to a new audience and embracing modern technology. Online gambling sites provide access to a market exponentially larger than the club membership. The UK is the home of online gambling, and www.horseracingbetting.co.uk shows just how many sites there are.
The best chance of the club thriving in the modern betting environment is by tapping into this market, and the early indications are that this is something it is achieving with some measure of success. It reported record turnover in its most recent year, thanks largely to a growing international client base. This can only be good news for the club, its members and the thousands of charitable organizations it supports every year.