"How come we never hear of 25 yo whiz kids tearing up the tote right here in the US of A?" -Boscar

"You sure this aint a front for betting fixed races?" - Boscar

"You ever see a race that could be gang handicapped and come up with super accruate odds"? - Boscar



Bets rings in racing comeback

Ken Martinus

Monday, October 09, 2006

Betting syndicates are making a comeback to capitalize on the Hong Kong Jockey Club's decision to give big-time punters a 10 percent rebate on losing bets.

The club's decision is the result of a change in the way horse racing is taxed, with the Legislative Council voting last July to switch from an upfront tax on all bets to a tax on gross profits with a guaranteed minimum of HK$8 billion annually to the government.

The club was also given the flexibility to alter or invent bets to meet public demand, an option it has still to use.

Betting director Henry Chan Shing- kai decided on the rebate as, he claimed, this was one of the attractions of illegal bookmakers who the club estimates have been raking in up to HK$60 billion annually, almost the same as the total horse racing turnover for the season ended July 2.

Since the start of the rebate scheme, a number of betting syndicates have returned and some new ones set up including one being run by a 25-year-old computer whiz kid who, on the opening day of the current season, made about HK$10 million.

But, according to the young entrepreneur, who only three years was a trainee sub-editor of a racing newspaper, the rebate scheme is also helping small-time illegal bookmakers whose appeal is the offer of credit betting for customers they know.

"These bookies pool together a number of small bets and then place these with the Jockey Club through normal betting accounts and use the rebates for profits should the selected horse fail to place.

"Should the horse win, the bookie makes nothing. Still, it is a no-lose situation," the young racing millionaire said.

From the Jockey Club's point of view, the rebate scheme is working with total turnover after seven racing days up a substantial 6 percent on the same period last season.

The upswing is more noticeable in the win-and-place pools which normally attract big-time punters.

Chief executive-designate Winfried Engelbrecht-Bresges is overjoyed with betting figures to date, though he admits it is still early days.

"Of course we are pleased as the rebate scheme seems to be working, especially in the win, place and quinella pools, so you can say we are cautiously optimistic," Engelbrecht-Bresges told The Standard shortly before it was announced he was to replace Lawrence Wong Chi-kong who steps down at the end of January.

"But there are still more than 70 racing days to go so anything can happen before then."

New club chairman John Chan Cho- chak said earlier this month the club would need to increase its annual horse racing turnover by at least 5 percent from last year's HK$60 billion to ensure it met the minimum HK$8 billion it must pay the government.

Betting syndicates were the norm in the final years of the colonial era with many experts, mainly from Australia, setting up shop in Hong Kong and offering membership to local millionaires.

These syndicates employ a host of racing specialists to analyze each and every horse in each and every race. They also closely monitor daily track work and the dozen or so Chinese- language racing newspapers to check on the rumors and gossip.

However, soon after the handover, the Jockey Club froze or closed down several accounts belonging to these syndicates under the guise it wanted to protect the small punter.

This, combined with the Asian financial crisis, which also began in 1997, the outbreak of Severe Acute Respiratory Syndrome that wreaked havoc with the economy and the opening up of Macau's gambling establishments saw the Jockey Club's racing turnover tumble from HK$92.35 billion in 1996-97 to HK$60.05 billion in 2005-06.

One prominent racehorse owner, who asked not to be named, said the club had to shoulder some of the responsibility for the massive 33 percent slide in turnover for clamping down on betting syndicates.

"The first thing the club did following the handover was to close or freeze accounts of the betting syndicates, somehow suggesting they were up to something illegal," the owner said.

"I was, myself, a member of a betting syndicate. Sometimes we won, sometimes we lost, but generally I was collecting at least HK$1 million each year. There was nothing illegal about our bets as the syndicate comprised an army of racing experts who analyzed the form, the track conditions, the track work and every other minute detail before arriving at what they thought was the right odds for the horse. If the actual odds were higher than the syndicate's estimate, a large bet was placed at the last minute.

"Unfortunately, there were some idiots in the club, who I will not name, who thought this was illegal and closed or froze such accounts."

When this happened, the syndicates turned to runners who, armed with cash coupons of up to HK$1 million, stood outside betting centers awaiting instructions on whether or not to bet.

"Once again the club got it wrong," the owner said. "It privately investigated these big-time punters who are obliged to produce their identity cards when collecting large sums of money and sent their names to the Inland Revenue Department, suggesting they were doing `private business."'

Worse still, the tax department acted on these Jockey Club tipoffs and sent out several claims demanding tax of up to HK$100 million. Many big punters ran off, the owner said.

But one big punter did stay and took the Jockey Club to court over the freezing of his betting account. The court ruled in his favor but for some reason the case was never publicized.

"What the Jockey Club failed to realize is that the big bets made by these syndicates were taxed up front by the government and the club. By closing these accounts, the club was simply cutting its own nose to spite its face," the owner said.

"Worse still, it started to look around for scapegoats and forced the government into changing the betting ordinance to prohibit Hong Kong punters from betting on pools overseas.

Ironically, there is now talk about getting overseas punters to bet on Hong Kong pools."