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Anne Lindner
 

European Bookmakers Assess Hong Kong Situation

9 October 2002

The passage of a bill outlawing offshore, and therefore Internet, gambling in Hong Kong late last May may have driven some operators out of the market, but one thing seems for sure: the SAR is not done with I-gaming, and I-gaming is not done with it.

For one thing, international bookmaker Victor Chandler still keeps a lobbyist-slash-representative there to both promote Internet gambling and to speak with media.


"Yes, [the new Hong Kong Policy] looks very much like protectionist legislation from a territory that is protecting its largest taxpayer, the HKJC,"
-Mark Blandford
Sportingbet

Before the amendments to Hong Kong's Gambling Ordinance were passed on May 30, Murray Burton worked at International Sports Promotions Ltd., a Victor Chandler subsidiary in Hong Kong that was set up in 1998. While there, Burton promoted and facilitated Victor Chandler's business with Hong Kong residents, who could be steered toward the company's head betting office in Gibraltar.

Since the passage of the amendments, Victor Chandler has had to close its Hong Kong office and now it keeps only Burton there.

Post amendments, Burton maintains a Victor Chandler presence in the SAR, albeit one that is one step removed from the VC establishment. One of his jobs is to promote the cause of attempting to effect change in the legislation.

"There's nothing in the law that says you can't lobby or be a business consultant," he said.

He gives speeches to raise awareness of the ineffective part of the legislation. At the time he spoke to IGN, he had a speech coming up before one of the Hong Kong Rotary Clubs.

Burton describes the gambling law before the passage of the amendments as "woolly"--a tangle of confusion much like what amounts to U.S. law on the subject. When the Asia-hosted World Cup rolled around, that and pressure from the Hong Kong Jockey Club might have influenced the Legislative Council, Hong Kong's lawmaking body, to make offshore and Internet gambling specifically illegal.

After all, Burton said, the legislation was passed in a matter of seven weeks after lying around for 18 months virtually untouched. Traditionally, the only legal betting in Hong Kong has been through the HKJC and the Mark Six Lottery, which is operated by the Jockey Club.

"So offshore bookmakers, such as Victor Chandler, started to attract a lot of customers in recent years, because they could offer much more variety of bets--fixed odds, not the pool system, exotic bets, etc.--to punters," he said. "The Jockey Club felt that their downward spiraling turnover was largely because of the offshore operators."

Mark Blandford, executive vice president of Sportingbet.com, another international bookmaker with an Internet presence, agrees.

"Yes, (it) looks very much like protectionist legislation from a territory that is protecting its largest taxpayer, the HKJC," he told IGN in an e-mail.

According to Hong Kong newspapers, the Jockey Club has suffered a decline in business lately, and it at least partially blames the loss on offshore gambling. An article in the Sept. 4 South China Morning Post notes that the HKJC's revenues have slipped 15 percent in the last five years and that last season, attendance declined 13 percent.


"Because [the legislation] is bad law, to the extent that you can't enforce it, I think many people just ignore it. ... You are never going to stop Hong Kong people from gambling."
- Murray Burton
Victor Chandler

"Fingers were pointed at sappers such as illicit soccer betting and the slumping economy," the newspaper states. "Offshore and online bookies took the brunt of the blame, bringing an Internet betting ban. Closure of the Internet loophole was too late to affect the last racing season."

Another reason why the legislation has yet to quell talk of online gambling in Hong Kong is that, by many operators' predictions, making Internet gambling illegal has not stopped punters from using the Internet to bet. Gamblers in Hong Kong could possibly place bets via Internet bookmakers if they lied about their location. And then there are the illegal gambling syndicates.

"It's not difficult to do," Burton said. "Within Asia, if you want to place bets, there's always the (illegal market) alternative."

Blandford of Sportingbet said the law, although well intentioned, does not address the situation of offshore betting as practically as regulating and taxing offshore betting would.

"The legislation has not stopped illegal gambling, but reports suggest that it has put some of it back in the hands of the illegal local bookies," he said.

Burton noted that the average Hong Kong bettor uses a mobile phone to place wagers, as opposed to a computer. Many Chinese people who don't have computers do have mobile phones, he said.

"Because [the legislation] is bad law, to the extent that you can't enforce it, I think many people just ignore it," he said. “... You are never going to stop Hong Kong people from gambling."

European Bookmakers Assess Hong Kong Situation is republished from iGamingNews.com.
Anne Lindner
Anne Lindner