The Hong Kong Jockey Club (HKJC) is set to launch co-mingling pools with its massive wagering stand-alone pools with Australian, South African, Singapore, New Zealand and UK co-mingled pools over the coming 12 months.
The HKJC is so determined to join world-wide co-mingled pools that it is seriously considering going off-shore to set up a co-mingling platform while the Hong Kong government works through the present taxation hurdles that are preventing local co-mingling participation.
Winfried Engelbrecht-Bresges, HKJC Chief Executive Officer, reported this week, six days before the 2011 Cathay Pacific Hong International Raceday at Sha Tin on Sunday, after considerable discussions with government authorities that it was time for the HKJC to act.
“We had a meeting again with our government and we pressed again the need for co-mingling which I think is in the interest of not only Hong Kong, it is in the interest of world racing,” said Engelbrecht-Bresges.
“If you compare for example co-mingling figures, 70% of the world turnover in separate pools in any event like the l'Arc de Triomphe, was done in Hong Kong.
“If you look at the Melbourne Cup, 65% of the world turnover on the Melbourne Cup was from Hong Kong. So I think it is the key for internationalisation, and a key to fight off-shore bookmakers who take care of arbitrage.
“I hope that our government will within the next year be supportive. We have detailed discussions, but we are very clear that if we cannot get a result in the next year we will think about an off-shore co-mingling hub outside of Hong Kong to start the development, with a chance that there may be a stage where the government goes through certain processes and we can bring the money on-shore again.
“But we are very determined that we have talked about it for a long period of time, and I think it is now time to act from government. If not we have to take other actions to secure a position which we are losing if we are not careful.
“I think to me this is a win, win situation,” he said.
Engelbrecht-Bresges has long been a world-wide critic of off-shore bookmakers leaking industry wagering for no return to the industry. However, local government taxation issues have meant that Hong Kong has had to stand apart from the important co-mingled pools now in operation elsewhere.
Australia Tabcorp and South Africa’s Phumelela are world leaders in co-mingling pools and it is now considered a standard method of wagering world-wide.
The size of Hong Kong’s wagering pools are potentially a game breaker for the industry world-wide. The size of combining the Hong Kong pools with existing world co-mingled pools would challenge the competitiveness of off-shore and low margin corporate bookmakers.
The size of the interest in Hong Kong wagering is emphasised by the traffic on the HKJC web site www.hkjc.com with English, Cantonese and Mandarin sections.
“I think in a way our attractiveness of Hong Kong racing to customers worldwide it is not just about Hong Kong racing, but I think our advantage is on one hand our web site, one of the most visited web sites in Asia,” says Engelbrecht-Bresges.
“We have on average 900,000 people on a daily basis going to our web site, and it is so information rich that it is ideal for customers really to study form. We look for people at the really high end who want to spend the time and this is why I think it is important that we give them chance of world wide exposure,” he said.
A further compelling argument for the world to have Hong Kong join in with co-mingling is a surge in turnover in Hong Kong which is the envy of every racing jurisdiction in the world at the moment.
Last year Hong Kong’s turnover grew by some 14%, and that growth has not only continued into the 2011/12 season, but been exceeded.
“At the moment I am more than pleased. I was looking at the whole world economic situation and I was a little bit careful and expected a 3 to 5% growth. At the moment, on average, we have grown by 10%, and in the last week this trend has accelerated with meetings that have 15 to 18% growth, which I think is an extremely positive trend,” said Engelbrecht-Bresges.
“I think it is a result of a very detailed exercise we did in the last three years. We really went into customer segmentation where we really looked at what are the needs of the customers are, and where we have addressed the offering either being online, or being facilities and service, and we think we see the result of that pretty hard work now,” he said.
The international meeting on Sunday, widely considered the world’s turf world championships, is the result of similar planning to the customer segmentation the HKJC undertook, but this time over ten years ago.
“I think we have worked very hard on it and we came up with this concept ten years ago. Some people were sceptical, but I think that if you have a vision, and you work clearly on this vision, then I think it is achievable and we are extremely pleased when you look at results in the field,” commented Engelbrecht-Bresges.
“I think we have probably the best sprinters in the world, we miss Black Caviar, but I think that is the choice of the trainer to take on the world on a neutral place or not. Then in the mile I think it is a fantastic field and it is a pity that Excelebration had to be withdrawn.
“The Cup is for me a marvellous race if you look at one of the best 2000m horses (Cirrus des Aigles) which will face significant competition from I think two Hong Kong entrants which makes it extremely interesting. And the Vase is always very open and a competitive field with a rematch of the Melbourne Cup winner and runner-up definitely a highlight,” he summed up.
Winfried Engelbrecht-Bresges, picture Hong Kong Jockey Club.