PRESS RELEASE

Transcript of SHA's standup briefing

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Following is a transcript (English portion) of the meet-the-media session by the Secretary for Home Affairs, Dr Patrick Ho, at the West Wing lobby, Central Government Offices today (April 7):

Secretary for Home Affairs: The Executive Council approved on Tuesday proposals to reform the duty system for horse-race betting. The primary objectives of the reforms are to rationalise the regulatory system for horse-race betting, and to combat the increasingly rampant illegal gambling on horse races, while maintaining betting duty revenue at a steady level. It is intended as a means of tackling an existing problem.

The Government's policy on gambling is to restrict gambling opportunities to a limited number of authorised and regulated outlets only. The underlying rationale is not to encourage gambling. Our proposal to reform the betting duty system is in line with this policy. I am confident that the reforms could help combat illegal horse-ace betting.

The major reform proposals are:

* Betting duty will no longer be charged on the turnover of betting. Instead, a single set of rates will progressively apply to gross profits – with duty at 72.5% up to $11 billion, increasing by half a percentage point for every $1 billion up to $15 billion, and at 75% for the amount exceeding $15 billion;

* The Hong Kong Jockey Club (HKJC) would guarantee that the duty payable to the Government during each of the three years after implementation would be no less than $8 billion. A review would be conducted two years after implementation;

* The HKJC would be allowed to provide rebates to high-value bettors who lose money, in order to increase its competitiveness against illegal bookmakers.

More importantly, the regulatory regime of horse-race betting would be rationalised to bring it broadly in line with legal football betting and lotteries:

* to put in place a licensing system for horse-race betting;

* to expand the functions of the existing Football Betting and Lotteries Commission to include advising the Secretary for Home Affairs (SHA) on the regulation of the conduct of horse-race betting; and

* to provide that SHA could issue Codes of Practice as and when appropriate to prescribe detailed guidelines on particular aspects of the licensing conditions.

Let me stress here that the reform is not to encourage gambling in Hong Kong. We would include in the horse-race betting licence for the HKJC the mandatory conditions to prevent underage/excessive gambling, and minimise the negative impact of authorised horse-race betting. The HKJC is prohibited from taking bets from under-age persons and offering any credit for betting, and from paying dividends or rebates on bets to juveniles. As the rebates would only be offered to high-value bettors, the proposal would rather bring about the effect of diverting illegal bets to authorised betting channels, thus combating illegal bookmaking activities.

The HKJC is also required to restrict related promotional activities and to take appropriate measures to prevent pathological gambling. Our proposals seek to strike a balance between the need to combat illegal horse-race betting effectively, and the need to address public concerns about the negative social impact of gambling.

The Betting Duty (Amendment) Bill 2006 will be introduced into the Legislative Council on April 26.

The Government's efforts to fight illegal gambling is threefold.

In 2002, the Government amended the Gambling Ordinance to combat the unauthorised activities of offshore bookmakers in Hong Kong.

In 2003, we amended the Betting Duty Ordinance to authorise football betting and to combat illegal football gambling.

Today, the Government has decided to reform the duty system for horse-race betting. This is the third time since 2002 that we have introduced major reforms to the authorised betting system.

(Please also refer to the Chinese portion of the transcript.)

Ends/Friday, April 7, 2006
Issued at HKT 13:29

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