Hong Kong, Japan Enter Neighbor Policy

The Hong Kong Jockey Club and the Japan Racing Association have a similar problem -- their handle is dropping. In an attempt to solve the problem, the two racing authorities announced on Sept. 17 a joint 'Good Neighbor Policy.'

In effect the two groups will not except bets from or target residents from the others countries. But the agreement is only voluntary. Both parties are hopeful that co-operation within the industry can assist with inter-government restrictions on cross border gambling.

"The policy establishes a cooperative structure for regulation of cross-border gambling and it is the first time that there is a framework for the international cooperation against unauthorized, uncontrolled and unlimited gambling," Hong Kong Jockey Club chief executive Lawrence Wong stated after the policy announcement was made in Hong Kong.

Masayuki Takahashi, the president and CEO of the Japan Racing Association, stated, "Promoting the Good Neighbor Policy will enable each country to secure its financial basis in the industry and eventually bring sound development worldwide. I strongly hope that all racing authorities around the world will adopt this policy in the future and a framework for the international cooperation against illegal gambling is established".

The facts are the problem is not the HKJC and JRA taking bets from clients based elsewhere. It is illegal bookmakers and internet-operators taking their business.

With the new 'on-line' era upon us all it has clearly changed the way racing is played by gamblers. The HKJC and the JRA are acknowledged as the two biggest betting pools on the globe, holding well over 50% of the turnover on horse racing, and are the prime targets for outside investors and operators.

The matter was addressed 18 months earlier at the Asian Racing Federation and 12 months ago at the International Federation of Horse Racing Authorities, provoking Wong thoughts "that Hong Kong's enemies are illegal bookmakers. Racing and the profits of racing in Hong Kong belong to the people of Hong Kong and when illegal bookmakers take money from us they are taking it from the people of Hong Kong." As a non-profit organization the HKJC is a major source of income for the HKSAR and the main provider for the regions charities.

In May the HKSAR government implemented the Gambling Ordinance Amendment. The new law has made it illegal for residents of Hong Kong to place a bet outside the region or operate with any gambling group outside Hong Kong. As the HKJC is the only legal betting operator they have in effect legally closed the door on all other parties. However, policing such a law fully could be difficult.

Hong Kong's nearest racing neighbor, the Macau Jockey Club, has suffered badly with the amendment to the Gambling Ordinance. Most of Macau Jockey Club's owners are based in Hong Kong and the Gambling Ordinance Amendment has caused Macau's turnover to drop by $800 million (about U.S. $100 million) in the last season.