The Hong Kong Jockey Club (香港賽馬會) handled HK$143.38 billion—around US$18.4 billion—in horse-racing bets during its latest financial year.

The more interesting figure, however, is where that money came from.

Bets placed outside Hong Kong on races held at Sha Tin (沙田馬場) and Happy Valley (跑馬地馬場) reached HK$34.3 billion, approximately US$4.4 billion. That was 9% more than a year earlier and represented almost 24% of HKJC’s total racing turnover.

In simple terms, nearly one in every four dollars wagered on Hong Kong racing now comes from another market.

Horse-racing bets are normally placed into a common pot, known as a pool.

After the race, the operator deducts taxes and commissions. The remaining money is divided among the winning bets. The final payout therefore depends on how much money entered the pool and how it was distributed across the different horses.

Traditionally, each betting operator or country could maintain its own separate pool. HKJC’s international system connects approved operators in different markets and combines their bets.

Imagine that bettors in Hong Kong place HK$10 million on a race. Customers in Australia contribute another HK$3 million and those in the United Kingdom add HK$2 million.

Rather than maintaining three separate pools, the money can be combined into one HK$15 million pool.

This process is called commingling. The word is technical, but the idea is simply that regulated operators in several countries share the same betting pot.

Larger pools are useful because they can accommodate bigger bets without producing sudden changes in the potential payouts. They also make major races more attractive to customers and commercial partners.

HKJC now receives bets on Hong Kong races through more than 60 partners in 26 countries and jurisdictions.

The system also operates in the opposite direction.

HKJC customers can bet on selected races taking place in countries such as Australia, Japan and the United Kingdom. These are shown in Hong Kong as simulcasts.

Turnover on overseas races offered by HKJC increased by 21.4% during the year. That was much faster than the 3.6% growth recorded across the Club’s racing business as a whole.

The Government has authorised HKJC to offer more international races, allowing it to cover a greater number of the world’s leading events.

This gives Hong Kong customers more opportunities to bet outside the domestic racing calendar while keeping that activity within the legal market.

World Pool is HKJC’s international version of the same shared-pool concept.

Approved betting operators from several countries combine customer bets on major races into one large pool. HKJC provides the central infrastructure that brings the money together and calculates the payouts.

The number of World Pool races increased from 296 to 397 during the latest season, while turnover grew by 23%.

World Pool is not a new racing competition and HKJC does not own all the races it covers. Its role is to connect participating betting markets around the same events.

That distinction is important. The races provide the entertainment, but the shared betting pool is the product HKJC can distribute internationally.

Hong Kong remains the centre of HKJC’s operations. Its racecourses, customers and reputation for racing integrity provide the foundation for the network.

But the local market has obvious limits. There are only so many residents, race meetings and legal products available within the city.

Connecting operators in other countries gives HKJC another route to growth. It can attract overseas money into Hong Kong races while offering foreign races to its domestic customers.

The numbers show that this international layer is expanding much faster than the underlying racing business.

HKJC is therefore becoming more than a local racing and betting operator. Quietly, it is building the shared infrastructure through which an increasing amount of the world’s regulated horse-racing money moves.

We track how money, players and regulation move across East Asia's gaming markets — including the parts that don't show up in the official figures. If that's your world, reply. The best context usually comes from comparing notes.

—

East Asia Reports
Web: eastasiareports.com · Email: [email protected]
Author — Adrià Mas Rodríguez