Club's brand of "doing good for Hong Kong" widely admired worldwide, says Chairman

2 October 2008

Building a clear "brand" for The Hong Kong Jockey Club is more of a challenge than it might seem because the Club is a multi-faceted organisation that impacts almost every aspect of life in Hong Kong, Club Chairman John C C Chan told an audience of top marketing professionals at the Hong Kong Management Association (HKMA) and TVB Awards for Marketing Excellence presentation dinner this evening (2 October).

Mr Chan said that some local groups wrongly associated the Club only with horse racing and gambling, and did not appreciate that its successful not-for-profit mode of operation was in fact admired in many other countries worldwide as an ideal model for meeting public demand for gambling in a regulated and responsible way.  He urged the public to support the Club in the growingly challenging environment it now faced, and help it protect Hong Kong's gaming revenues for the greater good of the community.

Outlining the Club's different roles as a major local employer, top taxpayer and leading charitable benefactor, Mr Chan observed that "whatever we achieve in our different areas of operation, we try to turn it into doing good for Hong Kong - and that, if you like, is what we consider to be our brand.

"We also try to put strong emphasis on quality in everything we do - whether it be racing operations, customer services, membership facilities or, for that matter charitable projects," he added.  "We look carefully at what is being done elsewhere in the world in these different areas, and our benchmark is always to match or if possible, exceed, the best-in-class that we find."

Mr Chan said he believed this was a very strong brand and it seemed that a lot of the Club's customers did, too, as it had won a number of top brand awards.  "However, we are fighting a continuous uphill battle to maintain turnover and attendance in the core racing business - which underpins all our sporting and charitable operations !Vbecause the international operating environment has changed dramatically in the past few years, but Hong Kong's regulatory framework and public attitudes to gambling have not."

There were three areas of particular concern, he noted.  First, most countries worldwide were lowering their betting tax rates, some dramatically, to encourage the development of their gaming industries, yet Hong Kong still had one of the highest horse race betting duty rates in the world at up to 75%.  These high tax rates -and, in some cases, double taxation issues - made most overseas commingling arrangements unviable.

"Secondly, general sports betting is growing in popularity at a huge rate worldwide and Hong Kong simply doesn't have a strategy for dealing with this.  In contrast, casino operators in Macau will next year be able to offer betting on any sport you care to name, 24 hours a day, 365 days a year.  It would be naïve to think that nobody in Hong Kong will be attracted by these services !Vand that none of them will risk being lured into much heavier and more problematic betting behaviour at the casinos."

Thirdly, Mr Chan pointed out, there was little awareness of the proliferation of VIP junket operations in the past two or three years.  Although appearing respectable on the surface, "what these junkets actually do is prey on unsuspecting customers and keep lending them money to gamble at the casinos until they go bust.  Nevertheless they can operate legally in Hong Kong and with only minimal regulation."

Mr Chan stressed that the Club was not afraid of competition but its hands were tied by "a plethora of government restrictions that, to be frank, have simply not kept pace with changes in the local and global scene".  For example, the Club could not show simulcasts of overseas races involving Hong Kong horses unless they happened to fall on a local raceday.  Also, the Club was limited to 78 racedays a season, "so what happens is that the junket operators gleefully seize the summer off-season window of opportunity to target our high value customers and get them hooked on casino gambling instead."

If the Club was not given the chance to compete on a level playing field, he warned, then not only would Government's revenue from betting duty be reduced !Vwhich would have implications on public spending - but also the Club would have less money available to donate to charitable and community projects.  In addition, Hong Kong would have to cope with increasing social problems as a result of its citizens being targeted by junkets and overseas brokers whose only motives were profit.