Four Stewards of The Hong Kong Jockey Club elected; record HK$20.7 billion direct return to the community announced

09/03/2013

At the Annual General Meeting of The Hong Kong Jockey Club today (3 September), Voting Members re-elected Mr Philip N L Chen, GBS JP; Mr Stephen Ip Shu Kwan, GBS JP; and Dr Rita Fan Hsu Lai Tai, GBM GBS JP to the Board of Stewards and formally elected The Hon Martin C K Liao, JP.  All four Stewards will serve further terms of three years each until the AGM of 2016.

Mr Chen was first elected to the Board of Stewards in 2006, Mr Ip in 2007 and Dr Fan in 2008.  Mr Liao was co-opted to the Board on 1 April this year following the retirement of Dr Donald K T Li, SBS OStJ JP, due to his increasing professional responsibilities and public commitments.

Following the Meeting, the new Board of Stewards re-elected Mr T. Brian Stevenson, SBS JP as Chairman and Dr Simon S O Ip, CBE JP as Deputy Chairman for 2013/14.

Earlier Mr Stevenson, reviewing the highlights of 2012/13 (financial year ending 30 June 2013), told Voting Members that the Club's total direct return to the community had reached a record HK$20.74 billion, adding together the Club's betting duty and tax payments, its charitable donations and its contributions to the Lotteries Fund.  He noted that this huge contribution was before taking into account the many other benefits the Club created for Hong Kong through employment, tourism and related spending.

"These splendid results have been achieved despite a year of considerable challenge for Hong Kong on different fronts, not to mention competitive pressures on the Club at both local and international level," he commented.  "To my mind, this underlines the Club's role as a constant and stabilising force in society, providing Hong Kong people with their favourite form of weekly entertainment while being a major contributor to the community through its not-for-profit business model."

It was an especially successful year for the Club's core horse racing operations, which saw turnover surpass the previous record year of 1996/97, while football betting recorded another high-scoring performance in its tenth year of operation.  In total, the Club's net margin on racing, football betting and the Mark Six lottery, after payments of dividends to customers and betting duties to the Government, was HK$8.78 billion, an 8.3% increase on the previous year.

Total tax payments, including betting duties and profits tax, grew 9.1% to a record HK$17.64 billion.  This is equivalent to 7.3% of all taxes collected by the Inland Revenue Department during the year, maintaining the Club's position as Hong Kong's largest single taxpayer.  In addition, the Mark Six generated a HK$1.14 billion contribution to the Government's Lotteries Fund, which supports social welfare projects.

The Club's donations to charitable and community projects through The Hong Kong Jockey Club Charities Trust soared to a new record of HK$1.95 billion, a 12.8% increase on last year's HK$1.73 billion.  The Trust supported 160 different charitable and community projects during the year, also an all-time record.

Mr Stevenson attributed the record-breaking results to the Club's willingness to make substantial investments in revitalising horse racing and attracting new target segments to the sport, the betting duty reforms on racing implemented at the Club's urging in 2006, and the Government's agreement to introduce football betting in 2003 as a means of curbing rampant illegal gambling on the sport.

"As we see in this tenth anniversary year of HKJC Football, this strategic decision to introduce football betting has seen Hong Kong become one of the largest and most successful football betting operators in the world," he commented.  "Over the ensuing decade, this decision has led to a 61% increase in our return to the community through tax payments and a near doubling of our charitable donations."

 Operational Summary

Horse racing continued to be the major source of gross revenue, with turnover for 2012/13 seeing a 12.3% jump to a record HK$94.37 billion.  Race betting duty payments grew 12.1% to HK$11.11 billion, the highest figure since 1999/2000.  However, the Club's net margin on racing, at HK$4.12 billion, remains some way short of the 1999/2000 record of HK$4.50 billion, reflecting the challenges the Club now faces in increased competition.

Especially notable was the total racecourse attendance of more than two million – the highest since 2003/04 – including a remarkable turnout of nearly 119,000 for the Chinese New Year Raceday.  In addition, the "house full" sign had to be put up at one point on season finale night at Happy Valley, for the first time in recent memory.

The Club's football betting operations saw continued growth during the year despite the absence of any major international tournaments, with turnover increasing by 7.0% to HK$50.61 billion.  Betting duty payments to Government grew 6.8% to HK$4.21 billion, matching the Club's net margin.  Mr Stevenson said the build-up to World Cup 2014 was expected to give further impetus to the football operations in the coming year, but would also encourage the illegal and offshore operators to become more active, so the Club would continue to be vigilant of the market situation.

The Mark Six lottery operations were not able to repeat their exceptional growth of 2011/12, partly because there were fewer large jackpots, but continued to benefit from the revitalisation initiatives taken by the Club in 2010.  Turnover at HK$7.63 billion showed a small decline of 0.9%, generating lottery duty payments of HK$1.91 billion and commission for the Club of HK$458 million.

Regarding the past year's record Charities Trust donations, Mr Stevenson said they covered a wide range of projects across four main categories, namely Community Services, Education and Training, Medical and Health, and Sports, Recreation and Culture.  To ensure the maximum reach and effectiveness of these donations, the Club would continue to work closely with NGOs, district organisations and other parties across Hong Kong as trusted community partners, proactively identifying gaps in community and social needs, especially in the areas of sports development, elderly services and the needy and underprivileged.

"We would like to do more on the charitable front given the opportunity," he commented, "but to do this we need the community's continued support and understanding at a time when the Club's own long-term sustainability continues to face strong challenges from other leisure and entertainment options in the neighbouring region – not to mention from unauthorised online and offshore gaming operators.

"Generally, I feel that Hong Kong needs to be more readily responsive and understanding in addressing these competitive issues if the city is to maintain its position in today's rapidly-changing environment," Mr Stevenson said.

"As The Hong Kong Jockey Club approaches its 130th Anniversary of serving the community in the year ahead, I hope that its role as a Force for Good in society and a trusted community partner can be duly recognised.  I can think of no other organisation that provides such wide-ranging sporting and social facilities whilst also bringing countless benefits to the community at large."

Note to Editors:

The Hong Kong Jockey Club

Founded in 1884, The Hong Kong Jockey Club is not only one of the world’s leading horse racing organisations but also Hong Kong’s largest community contributor, donating HK$1.95 billion in 2012/13. In addition, the Club is a major taxpayer, Hong Kong’s single largest by far, generating over HK$17.64 billion in 2012/13 for public funds. The Club pioneers technology applications for sporting and betting entertainment, striving for the highest levels of customer service. As a membership club, it is recognised as one of Asia’s most prestigious. These multifaceted roles make it a well-respected and remarkable organisation, dedicated to its mission of enhancing the quality of life for all Hong Kong people.

Year-End Results of The Hong Kong Jockey Club

All figures in HK$ millions

(A) Business Figures

1a. Horse Racing – by Financial Year (1 July 2012 – 30 June 2013)

* 84 race meetings in 2012/13 vs 81 in 2011/12

1b. Simulcasts – by Financial Year (1 July 2012 – 30 June 2013) [included in 1a]

** 103 simulcast races in both financial years

1c. Horse Racing – by Racing Season

      (8 September 2012 – 13 July 2013; 11 September 2011 – 15 July 2012)

*** 83 race meetings in both racing seasons

1d. Simulcasts– by Racing Season [included in 1c]

      (8 September 2012 – 13 July 2013; 11 September 2011 – 15 July 2012)

**** 103 simulcast races in 2012/13 vs 104  in 2011/12

2. Football Betting – by Financial Year (1 July 2012 – 30 June 2013)

3. Mark Six Lottery – by Financial Year (1 July 2012 – 30 June 2013)

(B) Club's Contributions (by Financial Year)

1. Betting Duties and Profits Tax

2. Donations by The Hong Kong Jockey Club Charities Trust

(C) Impact of 2006 Betting Duty Reforms on Club and Government Revenues

(by Financial Year)