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Hong Kong is reportedly reviewing a recent proposal that would expand the gaming market to include basketball betting as the government looks for additional sources of revenue.
Reports reveal that the city is facing a budget deficit of nearly HK$100 billion (US$12.9 billion), with the finance chief considering the legalization of basketball betting as a way to boost government revenues. This information was disclosed today (Feb 24) by the South China Morning Post (SCMP), citing an anonymous insider.
The reports also revealed that the Hong Kong Jockey Club (HKJC) would most likely be in charge of the expansion. The group currently holds a monopoly and regulates football and horse racing markets in the city. They are also in charge of the local lottery.
Estimated HK$52.5 billion Turnover
This isn’t the first time basketball betting has been proposed in Hong Kong. Last year, the HKJC presented a proposal to the SAR Government, advocating for an expansion of its betting operations.
They highlighted that many residents were already placing bets on basketball through unregulated sites, causing the city to miss out on billions in annual revenue from these illegal platforms. However, the proposal was rejected by Chan himself, who argued that it would send the wrong message to the young population and encourage them to gamble.
HKJC CEO Winfried Engelbrecht-Bresges also estimated that roughly 150,000 players were placing basketball bets at these unregulated platforms, and if the government were to move forward with its plans for expansion, the group could bring in up to 60% of these bettors to the legal market.
He also highlighted the massive size of the unregulated betting market, with reports showing that Hong Kong residents waged roughly HK$350 billion at illegal betting sites in 2023. Basketball betting is said to account for 15% of this figure, amounting to HK$52.5 billion.
The CEO also noted that if basketball betting became legal, the resulting turnover could be close to one-third of the 2023 HKJC’s total football betting revenue for 2023, which was HK$160.3 billion.
Under current legislation, net receipts from authorized sports wagers on horse racing and football are taxed at a rate of 50%. The government is hoping to introduce basketball betting within this regulatory framework in an effort to significantly boost revenue.
HKJC Remains in Control
Hong Kong operates a heavily regulated gaming market, with full control given to the Hong Kong Jockey Club. Land-based sports betting is prohibited, and players are limited to placing wagers on the single online platform managed by the HKJC.
This monopoly has led to significant growth and control of the market, with all legal betting revenues going directly to the city. However, the unregulated market has continued to grow despite heavy restrictions, and critics warn that unless the government moves towards full expansion, this trend will continue.
Meanwhile, Engelbrecht-Bresges has pointed out that launching basketball betting in the city could cost between HK$1.5 billion and HK$2.5 billion. He also compared the potential legislative process to that of football betting, stating that it might take up to 18 months for the regulatory framework to be established.
With the budget set to be announced by Paul Chan Mo-po on Wednesday (Feb 26), Hong Kong residents would have to see if the government will take decisive action towards legalizing basketball betting.
Source: Next.io
