China to commence horse racing for all the wrong reasons

Last year when I was in Macau, I was almost brought to tears when I witnessed an elderly woman demand money from who I presumed was her granddaughter. When the young lady refused, she was met with a verbal lashing and left in tears herself.

Gambling is outlawed in mainland China. When their 1.3 billion strong population seek excitement, Macau is the place to go.

As an Special Administrative Region (SAR) with its own governance, gambling has long been legal in the small city on China’s South East coast.

For this reason, it is commonly known as ‘Asia’s Las Vegas’ but the analogy is not accurate at all.

Having visited both Asian and American casino hubs, the two are nothing alike.

Macau is sickening in comparison. There are no extravagant water features. There are no beer vendors lined along the streets. There are no scantily dressed dealers and waitresses. There are no curly-straw clad cocktails. The sense of fun has been stripped out, replaced by unrepentant gambling.

Those who travel to Macau from the mainland come with the sole purpose of no-fuss gambling. So dramatic are these influxes, the gaming revenue of Macau’s is six times that of Las Vegas!

If you walk around any casino in Australia, even Blind Freddy can tell you what demographic make up the majority of gaming patrons.

A study by the Victorian Responsible Gambling Foundation found that problem gambling amongst the Chinese community was roughly five times higher than the broader, world populace.

This gives me a fairly good idea of what will happen when horse betting is legalised in mainland China.

Nearing the final stages of a long term research project, China in association with the China Horse Club and various jockey clubs is set to legalise betting on the races for the first time since 1949 when the Chinese Communist Party (CCP) came into power.

It is a dangerous foray into the vice which targets one of the most manipulatable populations in the world.

The establishment of world class breeding and racing facilities in Tianjin has gained the backing of industry giant, Coolmore. With this backing, the project cannot fail.

While Coolmore are industry leaders in upholding the sport’s integrity via their global influence and business model, their reasons for supporting the expansion are starkly different to those of the Chinese.

Wuhan, the once horse racing capital of China, hosted an official race day in April last year but no official betting took place. 6800 people turned up for the four races. 120,000 RMB was offered prize money.

Over the past few years, The Chinese Horse Racing Intelligence Competition Research Group has been actively researching the economic benefits of legalising horse betting.

Head of the research group, Qin Zunwen has argued that lifting the betting ban will “boost state revenue, create new jobs, entertain the public, and crack down on illegal gambling.”

Perhaps a slip, perhaps obvious; the boosting of state revenue is the most prominent incentive to build a horse racing industry in the Chinese mainland. This would reduce the amount of illegal gambling of which is exempt to official taxes.

Horse racing has been the national sport of Hong Kong for the past century and provides the best case study of what will happen once betting is legalised in mainland China.

The Hong Kong Jockey Club has monopolised all gaming in SAR and government legislation prohibits the entrance of rival bookmakers. As a result of this the Hong Kong Jockey Club is the largest tax payer in Hong Kong and in my opinion possesses too much influence over Hong Kong culture.

The concept of ‘The Sport of Kings’ is lost amongst horse racing on the Hong Kong. Racing isn’t about the horses, prestige is non-existent and to define it as ‘entertainment’ is quite a stretch.

It’s the only place in the world where I have not been able to distinguish the homeless from the punters.

Racing is solely about punting in Hong Kong and sitting around the breakfast table on race days (communal breakfasts are common amongst the middle class), men are seldom found without their form guide.

No date has been set on when betting on horse racing will be officially legalised in China but all signs suggest it’s going to happen very soon. The Chinese government have strongly supported the establishment of world class horse racing facilities in Tianjin and have not opposed the increase of races held in Wuhan.

Last month, China launched their first horse racing channel where residents of the mainland can stream European races. The channel’s operator, ATR, has flagged their intention to add Australian racing to their broadcast also.

In September, the new Tianjin racecourse will host the inaugural Tianjin National Cup which will offer 1 million RMB (~$200,000 AUD) as prize money. Prominent racing identities Tom Magnier, Lloyd Williams and Adam Sangster are all expected to be in attendance.

Big money has already been spent on purchasing A-Grade bloodstock for the Chinese market. At Australia’s recent Inglis Easter Yearling sale, Coolmore purchased two colts for $2.4million and $1.5 million on behalf of the China Horse Club. Both colts are by Australian champion sire, Fastnet Rock.

Horse racing in China is developing at industrious rates. It is only a matter of time before horse betting is legalised. As gambling opportunities increase across the mainland, so too will problem gambling amongst one of the world’s most compulsive cultures.

The significant increase in state revenue will come at a costly price. Based on everything we know about Hong Kong, Macau and the alarming statistics about problem gambling within Chinese culture, an epidemic is coming.