December 13th was International Race Day, the Hong Kong Jockey Club’s biggest event. Horses and jockeys from dozens of countries competed and generated billions of dollars in gambling money. The HKJC proclaims — and is perceived — to be a benevolent and generous charity that donates its money to worthy charity causes, which it has indeed done. It is also Hong Kong’s top tax payer. Nevertheless, Hong Kongers should be asking: Is the HKJC paying the taxes it should be paying as a gambling monopoly, but is not, because it is a charity?
The HKJC, is a product of puritanical Victorian Britain. It was designed to control the money Chinese colonials spent pursuing their gambling passion.
When Hong Kong Governor Richard Graves MacDonnell was branded an anti-Christ, his scheme, like others before him, to license gambling houses failed — and the roots of the HKJC were sown.
Nobody seemed to worry much about betting on horse racing, because there was only one race a year. More realistically, because several Hong Kong governors in the 19th century were Irish racing men. The first races were a shambles. The horses, like their owners and jockeys at the upcoming International, were of many nationalities. Australian Walers ran against pure bred Arabs and there were wild China ponies from the steppes of Mongolia. There were army cavalry horses and broken down hacks. The first 40 years of racing in Hong Kong were chaos.
In 1884, the top racing men in Hong Kong got together and founded the HKJC. The races were held once a year during the Chinese New Year holidays in Happy Valley, which became a fairground. The great racing clubs of China, like Shanghai and Peking, sent horses down by steamer to compete against Hong Kong’s finest. The annual race meeting was a great party that went on for three days.
In December 1891, a new Governor, Sir William Robinson, conscious of questions asked in the House of Commons by the anti-gambling lobby, announced just before the February race meeting that gambling would not be allowed.
Almost all members of the Legislative and Executive Councils were dedicated racing men and the new Governor eventually gave in to the pressure exerted on him and lifted the ban on gambling. In the early days the earnings from the tote, the Race Fund, were very small and were spent on prize money and the social event of the season, the Race Ball. The puritanical Victorian argument that it was improper to use money raised by vice for public purpose carried on well into the 20th century. However in 1930, a small betting tax of two percent was imposed. By the advent of World War II, HKJC proceeds to charity were totaling about HK$50,000 a year.
After the establishment of the People’s Republic of China in 1949, hundreds of thousands of refugees poured into Hong Kong. With little entertainment available, enormous crowds turned up at the race meetings. Suddenly the HKJC was turning over HK$400,000 every race day.
There was still no way that a direct betting tax of any size could be imposed that would be acceptable to the British parliament. The Chairman of the club, Sir Arthur Morse, one of the architects of Hong Kong’s spectacular recovery after World War II, and Governor Sir Alexander Grantham, got together and agreed that the HKJC should give over one-third of its takings to civic and social undertakings and that the government should advise on which projects it felt worthy of support. It was a simple gentleman’s agreement and there was absolutely nothing in writing, so there was nothing that the puritanical do-gooders in London could do about it. In the first year the fund came to around HK$700,000. Today it is in the billions and is not limited to racing – but all soccer and online betting as well.
On the 150th anniversary of the HKJC, isn’t it time Hong Kongers revisit how much money the club is paying as a benevolent charity and top tax payer, compared to what it should be paying as a gambling business monopoly?
In the 21st century, now that gambling is no longer considered a sin by the majority of people and is easily available and accessible in Macau and online, isn’t it time the Hong Kong government and the people they represent, get their fair share of gaming revenues – and also decide how it should be spent for the benefit of all Hongkongers instead of just the HKJC powers at be representing the interests of their members and Hong Kong government special interests?