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Internet Gambling Leaves Hong Kong out of Pocket
HONG KONG, Feb 22, 2001 -- (Reuters) Hong Kong's Jockey Club is facing a nagging problem -- punters in the gambling-mad territory are increasingly placing their bets with offshore Internet sites, costing the club and the government billions in revenue.
Growing competition from offshore bookies has made Hong Kong's only legitimate betting agent so nervous it is pressing the government to take action.
But authorities admit the odds are against them being able to stop the unofficial betting because most of the online bookmakers are based overseas. They have no jurisdiction over them, even if they are clearly targeting punters in Hong Kong.
"Hong Kong is a big piece of meat for these operators," Kim Mak, executive director of the Hong Kong Jockey Club, told Reuters.
"Many of them are very blatant. They advertise heavily and some of them have even set up so-called service centers in Hong Kong but in fact, they take bets," Mak said.
The Jockey Club estimates it is losing HK$50 billion ($6.4 billion) a year to high-tech and illegal bookmakers, but it is not alone.
The trend is also hitting government coffers just as the territory is emerging from its worst recession in decades.
Betting duties are a key source of income for the government -- the Jockey Club provides about 11 percent of its tax revenues.
The Jockey Club sounded the alarm bell when Lunar New Year races in January brought in eight percent less than last year.
This, the club chief warned, could cost Hong Kong dearly.
One would think even the most avid gambler could satisfy their appetite for betting in Hong Kong.
Hordes of punters file twice a week to two racecourses, one in Shatin and the other in the aptly named Happy Valley, hoping to strike it rich. Local radio and television stations carry races live.
Another two nights a week, the club's popular lottery produces instant millionaires.
Together, the games raked in more than HK$83.6 billion for the club in the year to the end of last June.
But club officials said this reflected only a fraction of what it should have received.
BIGGER WINNINGS
The Hong Kong government says 500 Internet gambling sites are collecting bets from punters in the territory.
A handful of offshore sites, including one of Britain's largest bookmakers William Hill, have come up with Chinese-language services specially tailored to appeal to Hong Kong betters.
William Hill is not shy to admit it is accepting bets from Hong Kong.
"We are not based in Hong Kong and we operate an entirely legal business," Graham Sharpe, a spokesman for William Hill in London, told Reuters.
The Hong Kong government and the Jockey Club are discussing how to update existing betting laws, which do not cover online betting or offshore bookies.
One idea is to ban the collection of bets in Hong Kong by overseas bookmakers, but some legislators argue it would be impossible to enforce.
William Hill seems to agree that it is difficult to plug the loopholes with a workable law.
"And how would they do that?" Sharpe asked.
Unlike the Jockey Club, Internet gambling sites do not pay betting duties to the Hong Kong government and they often promise generous dividends to attract punters.
Operators of the easybets.com customer service hotline, who speak fluent Chinese, told Reuters the company pays out 10 percent more than the Jockey Club to winning betters.
A potential punter is referred to the Website to register and provide credit card details. Betting on a wide range of international sporting events is available, including Hong Kong races.
Other Websites offer favorable discounts to punters. A gambler who loses a $100 bet, for example, may have to pay slightly less than the full amount.
The government is struggling to come up with workable ways to rein in the non-official betting, especially as it seems to be increasingly popular among those living in the territory.
A recent survey conducted by the international Internet usage measurement firm, NetValue, found the number of Hong Kong residents visiting gambling sites almost doubled between last October and December to 41 percent of the population from 22 percent.
The government and lawmakers plan to look for ways to plug the loopholes, but many are already betting that the days of such high tax revenues from gambling are gone.
HONG KONG, Feb 22, 2001 -- (Reuters) Hong Kong's Jockey Club is facing a nagging problem -- punters in the gambling-mad territory are increasingly placing their bets with offshore Internet sites, costing the club and the government billions in revenue.
Growing competition from offshore bookies has made Hong Kong's only legitimate betting agent so nervous it is pressing the government to take action.
But authorities admit the odds are against them being able to stop the unofficial betting because most of the online bookmakers are based overseas. They have no jurisdiction over them, even if they are clearly targeting punters in Hong Kong.
"Hong Kong is a big piece of meat for these operators," Kim Mak, executive director of the Hong Kong Jockey Club, told Reuters.
"Many of them are very blatant. They advertise heavily and some of them have even set up so-called service centers in Hong Kong but in fact, they take bets," Mak said.
The Jockey Club estimates it is losing HK$50 billion ($6.4 billion) a year to high-tech and illegal bookmakers, but it is not alone.
The trend is also hitting government coffers just as the territory is emerging from its worst recession in decades.
Betting duties are a key source of income for the government -- the Jockey Club provides about 11 percent of its tax revenues.
The Jockey Club sounded the alarm bell when Lunar New Year races in January brought in eight percent less than last year.
This, the club chief warned, could cost Hong Kong dearly.
One would think even the most avid gambler could satisfy their appetite for betting in Hong Kong.
Hordes of punters file twice a week to two racecourses, one in Shatin and the other in the aptly named Happy Valley, hoping to strike it rich. Local radio and television stations carry races live.
Another two nights a week, the club's popular lottery produces instant millionaires.
Together, the games raked in more than HK$83.6 billion for the club in the year to the end of last June.
But club officials said this reflected only a fraction of what it should have received.
BIGGER WINNINGS
The Hong Kong government says 500 Internet gambling sites are collecting bets from punters in the territory.
A handful of offshore sites, including one of Britain's largest bookmakers William Hill, have come up with Chinese-language services specially tailored to appeal to Hong Kong betters.
William Hill is not shy to admit it is accepting bets from Hong Kong.
"We are not based in Hong Kong and we operate an entirely legal business," Graham Sharpe, a spokesman for William Hill in London, told Reuters.
The Hong Kong government and the Jockey Club are discussing how to update existing betting laws, which do not cover online betting or offshore bookies.
One idea is to ban the collection of bets in Hong Kong by overseas bookmakers, but some legislators argue it would be impossible to enforce.
William Hill seems to agree that it is difficult to plug the loopholes with a workable law.
"And how would they do that?" Sharpe asked.
Unlike the Jockey Club, Internet gambling sites do not pay betting duties to the Hong Kong government and they often promise generous dividends to attract punters.
Operators of the easybets.com customer service hotline, who speak fluent Chinese, told Reuters the company pays out 10 percent more than the Jockey Club to winning betters.
A potential punter is referred to the Website to register and provide credit card details. Betting on a wide range of international sporting events is available, including Hong Kong races.
Other Websites offer favorable discounts to punters. A gambler who loses a $100 bet, for example, may have to pay slightly less than the full amount.
The government is struggling to come up with workable ways to rein in the non-official betting, especially as it seems to be increasingly popular among those living in the territory.
A recent survey conducted by the international Internet usage measurement firm, NetValue, found the number of Hong Kong residents visiting gambling sites almost doubled between last October and December to 41 percent of the population from 22 percent.
The government and lawmakers plan to look for ways to plug the loopholes, but many are already betting that the days of such high tax revenues from gambling are gone.
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