HKJC points to “significant external challenges” as FY 2024 turnover remains flat
Club in Hong Kong points to increasing threat of illegal gambling as one reason why turnover of H$305bn was unchanged from the prior fiscal year
The Hong Kong Jockey Club (HKJC) has reported that total turnover for fiscal year 2023-24 – the 12 months to 30 June – remained flat at HK$304.9bn (£29.8bn), with “significant external challenges” cited as the core reason.
Announcing its finances following its AGM on 4 September, HKJC highlighted how it had been impacted by the difficult macro-economic environment, the increasing threat of illegal gambling and rising competition from Macau casinos.
Net margin dropped 10.5% year on year (YoY), to HK$14.8bn, which was largely due to the full-year impact of special football betting duty of HK$2.4bn.
Local racing wagering turnover for the season, 10 September 2023 to 14 July 2024, slumped 9.3% YoY.
One explanation for the fall was a “fundamental post-pandemic shift in consumer behaviour”, with the population seeking out “new digital experiences and outbound travel” having an impact on race-going and betting on racing.
HKJC said it had aimed to mitigate these declines with its globalisation strategy, which includes building up its overseas customer base.
In turn, commingled turnover on Hong Kong racing was up 13.7% to HK$28.8bn, comprising 23.7% of local racing turnover.
Total turnover on simulcasting and the World Pool increased 8.7% YoY to HK$12.8bn.
Overall racing turnover for the season dropped 4.5% to HK$134.7bn. It was down 3.1% to HK$136.1bn for the 12 months ending 30 June 2024.
Meanwhile, The Mark Six lottery’s turnover grew 13.3% to HK$8.5bn, which was attributed to refinements to the jackpot reserve model creating higher and more jackpots.
Football turnover also saw growth, hitting a record high of HK$160.3bn, up 2.2% compared to the previous year.
HKJC said: “The introduction of 24-hour operations, an increase in in-play offerings, as well as innovative new products like ‘Same Game All Up’ and ‘Early Settlement’, all helped boost turnover and counter illegal markets.”
However, due to HJKC paying the extra HK$2.4bn in special football betting duty every year for the next five years, starting from April 2023, football income slumped 16.6% YoY to HK$8.1bn.
Despite turnover remaining flat, HKJC said it was “determined” to support the community and contributed a record HK$40.1bn.
Broken down, this was a record HK$29.9bn in betting duty, profits tax and lotteries fund contributions, and a new high of HK$10.2bn in approved charity donations to 173 charities and community projects.
HKJC chairman Michael Lee said: “The club will continue to invest and, if necessary, make use of its reserves, both to ensure the club’s long-term future and to uphold our commitment to the community.”
CEO Winfried Engelbrecht-Bresges added: “Looking back over the past year I am once again struck by the enormous resilience of the club.
“Having taken everything that the pandemic had to throw at us, we have had to contend with an extremely challenging macro-economic environment as well as significant changes in customer behaviour as they seek out new experiences online or in outbound destinations.
“Despite this, the club has continued to deliver outstanding racing entertainment and the strongest support for our community.”
HKJC, which is now 140 years old, once again highlighted how illegal gambling is “without doubt a rising and major threat”, adding that the black market “expanded hugely” during the pandemic.
Bosses said illegal gambling continues to grow faster than the illegal market and it is “undoubtably much higher” than the HK$339bn to HK$355bn the club estimated the underground market to be worth two years ago.
HKJC is calling for the scale of illegal betting on other sports to be fully examined, especially basketball, and that “a strong case can be made to expand the club’s licence” to offer betting on other sports in a bid to compete with illegal options.
Finally, at the AGM, Michael Lee and Martin Liao were re-elected as chairman and deputy chairman, respectively.
Four stewards, Nicholas Hunsworth, Dr Henry Chan, Ann Kung Yeung Yun Chi and chairman Lee, were re-elected to serve a term of three years each on the board of stewards.