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Reaching new global heights - record HK$3.90 billion in charity donations and over HK$26 billion total direct return to the community in 2015/16

08/31/2016

At the Annual General Meeting of The Hong Kong Jockey Club today (31 August), Voting Members re-elected four Stewards to the Board to serve further terms of three years each. They are Mr Philip N L Chen GBS JP; Mr Stephen Ip Shu Kwan GBS JP; The Hon Martin Liao SBS JP; and Mr Silas S S Yang JP.

Following the meeting, the new Board of Stewards re-elected Dr Simon S O Ip CBE JP as Chairman and Mr Anthony W K Chow SBS JP as Deputy Chairman for 2016/17.

Despite the economic downturn, the Club enjoyed another outstanding year, with overall turnover for the financial year (ending 30 June 2016) at just over HK$202.70 billion, up by almost 6%. The Club made another record return to Government of HK$20.91 billion in duty and profits tax and contributed HK$1.28 billion to the Lotteries Fund. Charitable contributions set another record of HK$3.90 billion. Adding together betting and lottery duty, profits tax, contributions to the Lotteries Fund and charitable donations, the Club's total direct return to the community reached HK$26.09 billion in 2015/16, up 4.0% on 2014/15 (HK$25.09 billion).

These achievements are made possible by the Club’s unique integrated business model of world-class racing and racecourse entertainment, membership, responsible wagering and lottery, and charity and community contribution, which generates substantial economic and social value for the betterment of all.

Record charity donations 

Reviewing the Club’s charity donations, the Club’s Chairman, Dr Simon S O Ip, pointed out that the record HK$3.90 billion donated to 215 charities and community projects was double the sum donated three years ago. Moreover, the Club’s Charities Trust has been recognised by the World Charity Index 2015 as the sixth largest non-government funder in the world and the largest in Asia.

“This substantial increase in commitments has been accompanied by an equally significant transformation in the way we address community needs”, Dr Ip said. “The Charities Trust now actively collaborates with all sectors of the community, creating opportunities for, and more importantly encouraging, multi-sector participation. Our objective is to maximise available resources in our community and optimise outcomes.”

Furthermore, while continuing to support a very broad range of community needs, starting last year and continuing over the next few years, the Club is focusing on three strategic areas - youth, elderly and sports. Approximately half of the Trust’s donations were allocated to projects in these three sectors in 2015/16.

With regard to Central Police Station, which the Club is restoring and revitalising in partnership with Government, and where one of the buildings suffered a partial collapse in May, Dr Ip reiterated the Club’s strong commitment to completing the project.

Racing to new global heights

Equally impressive has been the performance of Hong Kong horses where, for the second year in succession, 23 Hong Kong horses featured in the LONGINES World’s Best Racehorse rankings. Meanwhile, all ten of Hong Kong’s eligible races were included in the World’s Top 100 for 2015, with the Audemars Piguet QEII Cup being ranked ninth. Six of them were in the Top 25, meaning, in effect, that one in four of the world’s top 25 races are run in Hong Kong.

These achievements have brought global respect for Hong Kong, and in April 2016 Hong Kong was elevated to Part I of the International Cataloguing Standards and International Statistics Book, commonly known as the “Blue Book”, which is the highest status a racing jurisdiction can earn. All of this has been accomplished by a horse population of just 1,200 and in the absence of a breeding industry. In fact Hong Kong is the first, and so far the only racing jurisdiction without a breeding industry to be included in Part I of the Blue Book.

Customer-centricity

The Club’s record direct return to Hong Kong in 2015/16 reflected both the quality of its world-class racing and the strong performance of its responsible wagering and lottery services. Racing turnover for the financial year was up by 1.8% to just over HK$107 billion. Football turnover was up by 10.9% to HK$86.80 billion while the Mark Six, which celebrated its 40th anniversary this year, reversed last year’s small decline to record a 9.9% increase to HK $8.55 billion.

“What has enabled the Club to achieve these excellent results is the development of a world-class racing product combined with a rigorous focus on customer centricity”, said Chief Executive Officer Mr Winfried Engelbrecht-Bresges. The Club’s HK$6.5 billion racecourse revitalisation, which this year saw the opening of five new or refurbished venues, has seen Happy Valley and Sha Tin racecourses substantially upgraded. Together with the excitement generated by top-class horses and star jockeys, all this helped push racecourse attendance to just over two million for the fourth consecutive year.

Also fundamental to the Club’s customer-centric approach is the development of new digital products to meet customer demand for speed, convenience and connectivity. To maintain its position as a technology leader, the Club is moving ahead with a multi-billion next generation customer information and wagering system.

Commingling

The strongest indicator of the attractiveness of Hong Kong’s racing brand is its growing presence overseas, both through the broadcast of races and through commingling. “What attracts overseas racing fans is the competiveness of our racing, the depth of our wagering pools and above all our reputation for integrity”, Mr Engelbrecht-Bresges explained. Commingling which only began two seasons ago, had a turnover of HK$3.48 billion this racing season, up 31.5% on last season and representing 3.3% of total racing turnover. “It is a very promising area of growth, rich with potential benefit for Hong Kong”, said Mr Engelbrecht-Bresges.

Going forward

Looking to the future, the Club is fully committed to maintain its support for the betterment of Hong Kong and in this regard is continuing to invest in its sustainability and future.

With total race meetings increased from 83 to 88 and simulcast days from 15 to 23 next season, the Club will continue to focus on making racing and racegoing a unique customer experience. It will likewise explore the potential of commingling, particularly in Europe, and will further develop the strength of its digital technology. Above all, through the new Conghua Training Centre in Guangdong, which is scheduled to open in 2018, the Club will have a world-class training centre for its horses, positioning Hong Kong for the next stage of growth on the world stage.

Summing up the Club’s prospects, Dr Ip said: “Thanks to the efforts of our horses, the Club’s reputation in the racing world has never stood higher. Through the success of our business strategies we have achieved solid business results, which have enabled us to deliver record levels of support to the community. And with more race meetings and simulcasts, and especially with the rich potential of commingling, there is the prospect of further growth ahead. Certainly we can be sure that the Club will continue dedicating itself to the betterment of Hong Kong.”   

The Hong Kong Jockey Club's 2015/16 Annual Report can be downloaded from the HKJC website at corporate.hkjc.com/corporate/operation/english/annual-report.aspx

The Hong Kong Jockey Club
The Hong Kong Jockey Club is a not-for-profit enterprise dedicated to community betterment. Through its integrated model of world-class racing, responsible sports wagering and lottery, and charity and community contribution, the Club generates substantial economic and social value and assists the Government in combatting illegal gambling. In 2015/16 the Club donated a record HK$3.9 billion to charity and paid a record HK$20.9 billion in tax. It is Hong Kong’s largest single tax payer and one of the world’s largest charity donors. It is also one of Hong Kong’s largest employers, with 22,000 full and part-time staff. Committed to global excellence and giving back to society, the Club is always “riding high together for a better future” with the people of Hong Kong.

Results Summary of The Hong Kong Jockey Club 2015/16
All figures in HK$ millions

(A) Business Figures

1a. Horse Racing – by Financial Year (1 July 2015 – 30 June 2016)

 

2015/16

2014/15

% Change

Total Turnover*

107,353

105,406

1.8%

Betting Duty

12,291

12,001

2.4%

Club's Net Margin

4,510

4,412

2.2%

* 84 race meetings in 2015/16 vs 81 in 2014/15

1b. Simulcasts – by Financial Year (1 July 2015 – 30 June 2016) [included in 1a]

 

2015/16

2014/15

% Change

Turnover**

2,390

2,441

-2.1%

Betting Duty

315

321

-1.9%

Club's Net Margin

85

85

N/A

**  simulcast races 110 in 2015/16 vs 120 in 2014/15

1c. Horse Racing – by Racing Season
      (6 September 2015 - 10 July 2016; 14 September 2014 - 12 July 2015)

 

2015/16

2014/15

% Change

Total Turnover***

106,142

107,925

-1.7%

Betting Duty

12,134

12,300

-1.3%

Club's Net Margin

4,458

4,513

-1.2%

*** 83 race meetings in both racing seasons

1d. Simulcasts– by Racing Season [included in 1c]
      (6 September 2015 - 10 July 2016; 14 September 2014 - 12 July 2015)

 

2015/16

2014/15

% Change

Turnover****

2,390

2,309

3.5%

Betting Duty

315

303

4.0%

Club's Net Margin

85

80

6.3%

**** simulcast races 110 in 2015/16 vs 111 in 2014/15

2. Football Betting – by Financial Year (1 July 2015 – 30 June 2016)

 

2015/16

2014/15

% Change

Turnover

86,795

78,249

10.9%

Betting Duty

5,951

5,594

6.4%

Club's Net Margin

5,952

5,594

6.4%

3. Mark Six Lottery – by Financial Year (1 July 2015 – 30 June 2016)

 

2015/16

2014/15

% Change

Turnover

8,548

7,780

9.9%

Lottery Duty

2,137

1,945

9.9%

Payment to Lotteries Fund

1,282

1,167

9.9%

Club's Commission

513

467

9.9%


(B) Club's Contributions (by Financial Year)

1. Betting Duties and Profits Tax

 

2015/16

2014/15

% Change

Racing Betting Duty

12,291

12,001

2.4%

Football Betting Duty

5,951

5,594

6.4%

Lottery Duty

2,137

1,945

9.9%

Profits Tax

533

509

4.7%

Total

20,912

20,049

4.3%

 

2. Donations by The Hong Kong Jockey Club Charities Trust

 

2015/16

2015/14

% Change

Total

3,901

3,871

0.8%

 

(C) Impact of 2006 Betting Duty Reforms on Club and Government Revenues
(by Financial Year)

 

Total racing turnover

Club's net margin

Government's share
(betting duty)

2005/06 (pre-reform)

59,032

3,207

7,806

2006/07

63,860

2,902

8,031

2007/08

66,791

3,105

8,178

2008/09

67,653

3,126

8,228

2009/10

71,647

3,230

8,538

2010/11

81,924

3,663

9,735

2011/12

84,019

3,709

9,905

2012/13

94,370

4,118

11,108

2013/14

103,918

4,424

12,012

2014/15

105,406

4,412

12,001

2015/16

107,353

4,510

12,291

Overall growth since reforms

81.9%

40.6%

57.5%