It's all about problems, puzzles and challenges as the Jockey Club sheds the annual burden of an US$8 billion tax guarantee to begin a bright new era next Sunday at Sha Tin, reports Alain Aitken in the HK Racing Post.His report adds: The removal of that guarantee after the agreed three seasons offers new freedoms to adjust the club's business model, offer new products and maximise returns to the government and community, but that freedom carries a responsibility for the future."This year ma
It's all about problems, puzzles and challenges as the Jockey Club sheds the annual burden of an US$8 billion tax guarantee to begin a bright new era next Sunday at Sha Tin, reports Alain Aitken in the HK Racing Post.
His report adds: The removal of that guarantee after the agreed three seasons offers new freedoms to adjust the club's business model, offer new products and maximise returns to the government and community, but that freedom carries a responsibility for the future.
"This year marks the Jockey Club's 125th anniversary, which is something to celebrate, but also a starting point for securing the next 125 years," Chief Executive Winfried Engelbrecht-Bresges said this week. "We have a master plan, to be presented to the board for approval in December, and that will involve fundamental investments in our future - in our racecourses and the customer experience, in our web platform and in our training facilities. The training facilities are now more than 30 years old and need rehabilitation, a problem which is going to occupy us for some time. For example, to renew our all-weather track would mean closing it for at least two to three months and that isn't an option. We also have significant limitations with space but we are looking at solutions."
The master plan will involve significant spending but the timing could be right - with the tax guarantee over, along with the worst of a global financial crisis in which the club showed some real resilience to lose just 1 per cent of its business. One crucial area of investment will be the internet, with an eye to international commingling of pools and, for the club's sports betting arm, the 2010 World Cup and fresh competition from the imminent sports books in Macau casinos.
"For racing, the clearest relevance here is commingling, which has been tied up in double taxation problems," the Jockey Club chief said. "Commingling is not a matter of increasing gaming locally, but will increase revenue for Hong Kong and the club. Hong Kong will miss out on HK$150 million to HK$180 million in tax revenue if we don't resolve the double taxation issue, but I believe the finance ministry now understands the principles and we can solve this problem during the current season. Commingling could add HK$3 billion to HK$4 billion to our turnover."