In an effort to mitigate its nearly HK$100 billion (US$12.9 billion) fiscal deficit, Hong Kong’s finance chief is reportedly considering the legalization of basketball betting, a move anticipated to significantly boost government revenue. This revelation comes just days before Financial Secretary Paul Chan Mo-po is scheduled to deliver his budget speech, highlighting the government’s proactive approach to economic recovery.

Expansion of HKJC’s betting operations:

According to sources close to the matter, the potential inclusion of basketball in the Hong Kong Jockey Club’s (HKJC) sports betting options is seen as a strategic measure to enhance revenue from betting duties. Currently, the HKJC, which holds a monopoly on legal sports betting in the region, offers wagering on horse racing, football, and the local lottery, Mark Six. By broadening its scope to include basketball, the government hopes to capitalize on the sport’s growing popularity and the substantial amounts wagered illegally.

Winfried Engelbrecht-Bresges, CEO of the HKJC, has been vocal about the prevalence of illegal basketball betting in Hong Kong. He estimates that 100,000 to 150,000 punters currently engage in such activities through unauthorized bookmakers. By legalizing basketball betting, Engelbrecht-Bresges suggests that up to 60% of these bettors could be redirected into legal channels, thereby not only improving regulation but also significantly enhancing betting turnover.

According to South China Morning Post, the illegal sports betting market in Hong Kong was worth approximately HK$350 billion in 2023, with basketball bets accounting for 15% of this total. Legalization could translate these activities into an estimated HK$52.5 billion in legal turnover, nearly a third of what football betting generated for the HKJC in the same period. With a 50% duty currently levied on net receipts from authorized football betting, similar taxation on basketball could yield substantial fiscal benefits.

Legislative and infrastructure considerations:

The proposal, however, involves substantial infrastructural investments and legislative adjustments. Engelbrecht-Bresges pointed out that setting up basketball betting could require an initial investment ranging from HK$1.5 billion (US$191.7 million) to HK$2.5 billion (US$319.6 million). Additionally, the legislative process to sanction such betting could extend up to 18 months, paralleling the timeframe it took to introduce legislation for football betting.

The Hong Kong government is set to unveil its new budget imminently, which has sparked considerable public interest due to proposed economic strategies like this. Calls for expanded legalized betting options have been growing, with stakeholders pushing for the inclusion of other sports such as snooker and tennis. The recent interest in a potential US$5 billion basketball league in Asia, with possible venues including Macao, underscores the regional enthusiasm for the sport, further justifying the push toward legalization.

The potential for increased government revenue from legalized basketball betting comes at a crucial time, as Hong Kong seeks to navigate out of its fiscal shortfall. The move could set a precedent for how the region addresses economic challenges through innovative fiscal policies. As discussions continue, stakeholders from various sectors are keenly watching the developments, hopeful that this initiative could lead to a more diversified and resilient economic strategy for Hong Kong.