HKJC full year revenues buoyed by record horse race betting operations4th September 2013 8:32 am GMT
The Hong Kong Jockey Club has reported a 5 per cent increase in total revenues to HK$29,968m for the year ended June 30th, following a record performance from its horse race betting operations.
The increase was mainly attributable to higher turnover from the company’s horse race and football betting businesses.
HKJC chairman T. Brian Stevenson said: “These splendid results have been achieved despite a year of considerable challenge for Hong Kong on different fronts, not to mention competitive pressures on the Club at both local and international level.
“To my mind, this underlines the Club's role as a constant and stabilising force in society, providing Hong Kong people with their favourite form of weekly entertainment while being a major contributor to the community through its not-for-profit business model."
Horse racing continues to be HKJC’s major source of revenue, with turnover increasing by 12 per cent to $94.4bn during the year, surpassing the previous record year of 1996/97. Race betting duty payments grew by 12 per cent to $11.1bn, the highest figure since 1999/2000.
The club’s net margin on racing, at $4.1bn, remains some way short of the record of $4.5bn set in1999/2000, which the company said reflected the challenged faced with increased competition.
HKJC’s football betting operations saw continued growth during the year despite the absence of any major international tournaments, with turnover up by 7 per cent to $50.6bn. Betting duty payments to government grew 7 per cent to $4.2bn, matching the Club’s net margin.
Stevenson said the build-up to World Cup 2014 was expected to give further impetus to the football operations in the coming year, but would also encourage the “illegal and offshore” operators to become more active, so the Club would continue to be “vigilant of the market situation.”
The company’s Mark Six lottery operations saw turnover drop marginally by 1 per cent to $7.6bn due to fewer larger jackpots during the year, generating lottery duty payments of $1.9bn and commission for the Club of $458m.
Horse race betting operations accounted for 56 per cent of the company’s total revenues during the year, followed by football betting with 31 per cent and Mark Six lottery with 13 per cent.
In total, the Club's net margin on racing, football betting and the Mark Six lottery, after payments of dividends to customers and betting duties to the government, was $8.8bn, an 8 per cent increase on the previous year.
Total tax payments, including betting duties and profits tax, grew 9 per cent to a record $17.6bn, equivalent to more than 7 per cent of all taxes collected by the Inland Revenue Department during the year, maintaining the Club's position as Hong Kong's largest single taxpayer.
In addition, the Mark Six lottery generated a $1.1bn contribution to the government's Lotteries Fund, which supports social welfare projects.
The company’s operating costs climbed 8 per cent to $7.9bn as a result of higher employment costs, marketing expenses and supplies and utilities, as well as depreciation of property, plant and equipment.
The Club's donations to charitable and community projects through The Hong Kong Jockey Club Charities Trust soared to a new record of $1.9bn, a 13 per cent increase year-on-year, supporting 160 different charitable and community projects.
Stevenson attributed the record-breaking results to the Club's willingness to make substantial investments in revitalising horse racing and attracting new target segments to the sport, the betting duty reforms on racing implemented at the Club's urging in 2006, and the government's agreement to introduce football betting in 2003 as a means of curbing rampant illegal gambling on the sport.
“As we see in this tenth anniversary year of HKJC Football, this strategic decision to introduce football betting has seen Hong Kong become one of the largest and most successful football betting operators in the world,” he said. “Over the ensuing decade, this decision has led to a 61 per cent increase in our return to the community through tax payments and a near doubling of our charitable donations.”