Football betting on the way in Hong Kong

The government will introduce a bill into the Legislative Council on April 9 to amend the Betting Duty Ordinance to authorise and regulate football betting in Hong Kong.

"The primary objective of the bill is to provide an authorised and regulated football betting outlet as a means of tackling the problem of illegal football gambling in Hong Kong," the Secretary for Home Affairs, Dr Patrick Ho, said today (April 2).

"It will also complement the vigilant efforts of the police in combating illegal football gambling through law enforcement.

"This is consistent with our gambling policy of restricting gambling opportunities to a limited number of authorised and regulated outlets only."

Dr Ho said the legislative package struck a reasonable balance between the need to put in place an appropriate regulatory regime and the need to ensure the competitiveness of the licensed operator in the football betting market.

The bill seeks to provide a statutory framework whereby the Secretary for Home Affairs can authorise by licence a company to conduct betting on football matches in accordance with such conditions as he sees fit, and impose sanctions in the event of non-compliance with the licensing conditions.

The government proposes to grant the licence to a wholly-owned subsidiary of the Hong Kong Jockey Club specifically set up for the purpose.

"This will enable the Club to separate its football betting business from the rest of its operations. It will help ensure that each of them will be commercially viable as a standalone business and is conducive to the stability of betting duty revenue," Dr Ho said.

A similar framework for regulating the conduct of lotteries will also be provided.

The bill proposes the establishment of a Gaming Commission which will be responsible for advising the Secretary for Home Affairs on the regulation of the conduct of football betting and lotteries.

Under the proposed legislation, the betting duty will be set at the rate of 50% on gross profits, which will be assessed on an annual basis.

The bill will specifically allow the licensed operator to lay off football bets with overseas bookmakers for hedging purposes. Hedging is a common risk management measure amongst bookmakers offering fixed-odds bets.

The government proposes that the licence to the Hong Kong Jockey Club will last for an initial period of five years.

The licence will include the following major conditions:

(a) Licensee allowed to take bets on all football matches of major professional football leagues. No football matches involving Hong Kong teams allowed, except with the permission of the Secretary for Home Affairs;

(b) Licensee allowed to offer both fixed odds and pari-mutuel betting on approved football matches;

(c) Licensee allowed to take bets through telephone, on-line medium (including the Internet) and other telecommunications or electronic means;

(d) No credit betting (including use of credit cards) allowed;

(e) No bets to be accepted from persons below 18 years of age;

(f) No advertising allowed on television or radio during family viewing hours as prescribed by the Broadcasting Authority in ways which would exhort the public to bet or target persons under 18 years of age;

(g) Mandatory preventive measures against gambling-related problems;

(h) Consumer protection requirements.

The government also proposes to set up a dedicated fund to address gambling-related problems.

The fund would be used to finance research and studies on gambling-related issues and problems; public education and other measures to prevent gambling-related problems; and counselling and treatment as well as other remedial services for problem and pathological gamblers.

The use and application of the fund would be determined by the Secretary for Home Affairs.

"The Hong Kong Jockey Club will contribute $24 million for the first two years, and from $12 million to $15 million each year from the third to the fifth year of its football licence period," Dr Ho said.

"As this financial arrangement is not tied to the gross proceeds of football betting, this will help ensure the certainty of funding availability. It is also in line with responsible gaming practices in other jurisdictions where funding for measures to tackle gambling-related problems comes primarily from licensed gaming operators," he said.

The government plans to commission an overseas organisation specialised in counselling and treatment services for problem and pathological gamblers to conduct a benchmark study on how best to provide similar services in Hong Kong and to measure their effectiveness.

If the proposed legislation is passed within the current legislative session, a licence will be granted to the Hong Kong Jockey Club in August at the earliest, said Dr Ho.

End/Wednesday, April 2, 2003