Hong Kong is considering legalizing basketball betting to tackle its debt crisis. The budget shortfall could reach HK$100 billion (US$12.9 billion). Officials see basketball’s popularity as a potential revenue source. Expanding legal gambling beyond horse racing and football could bring in billions while curbing illegal betting. With Financial Secretary Paul Chan presenting the annual budget this week, many wonder if basketball betting will be included.
A Slam Dunk for Income Generation?
The demand to legalize basketball betting is not sudden. Due to slow economic growth and high public expenditure, Hong Kong's budget deficit is widening. The potential turnover from basketball gambling is pegged at HK$52.5 billion ($6.7 billion) annually by the South China Morning Post, or about one-third of what the Hong Kong Jockey Club (HKJC) gets from football betting. If the government imposes a 50% tax on this, similar to the football bets, this would generate HK$26 billion ($3.35 billion) in new revenue. That is a lot of money, which could help reduce the deficit.
HKJC CEO Winfried Engelbrecht-Bresges has been pushing for legalized sports betting for some time. Last year, he indicated in the local media that approximately 150,000 punters in Hong Kong were already betting on basketball through illegal channels, with an estimated amount of around HK$50 billion ($6.4 billion) flowing through these illicit channels yearly. He believes up to 60% of the illegal operation could be redirected to the legal market, allowing the government to tax it rather than leaving it to criminals.
Why Basketball?
Basketball is very popular in Hong Kong. People pack the courts in Kowloon and party late at night to watch the NBA. It’s easy to see why this is the sport of choice for this proposal. The Heung Yee Kuk (HYK) is a statutory advisory body that recommended legalizing bets on overseas leagues, including the NBA, snooker, and tennis. Kenneth Lau Ip-keung, HYK chairman, even suggested a government-run sports betting firm or a public tender, saying it would avoid over-reliance on taxpayer revenue while generating a steady income stream.
The Hong Kong Jockey Club (HKJC) is the only legal gambling entity in Hong Kong, and its horse races, football pool betting, and Mark Six lottery are offered in the city. Basketball could be an ideal candidate, given its popularity and that a neighboring jurisdiction, Macau, has legalized basketball betting since 2000. On the other hand, the mainland began offering it in 2009. If they can do it, why not Hong Kong? Asia’s passion for basketball is growing. Macau is a potential host for a new $5 billion league. Bloomberg sees it as a promising spot for lucrative action.
Cracking Down on Illegal Operations
There’s more to this than just the fast revenue generation. Illegal betting is a massive problem in Hong Kong, with Engelbrecht-Bresges estimating the illegal sports betting market to be HK$350 billion ($45 billion) annually. That's money flying through the gaps instead of serving the local communities. Legalizing basketball betting could bring some hidden money into the open, thus improving regulators' chances of maintaining openness.
Legislator Ronick Chan Ying has also been vocal on this. He told The Standard last March that allowing HKJC a piece of the basketball betting action would swell the treasury by more than a billion bucks a year and help eliminate crime fostered by illegal bookies.
Possible Risks and Criticism
Not everyone supports the idea. Chan fears basketball gambling could fuel addiction among young people. He wants to avoid this in a city known for discipline. Macau Business notes that Macau and China have safeguards for problem gambling, but Hong Kong must create its own.
Then there’s the cultural angle. Because of the traditional values in place, gambling is a sensitive topic in the region. Some are worried that allowing betting on even basketball will send a wrong message. The government has to consider that against the profits. Nonetheless, they are running out of time to work that out, with the budget speech coming on February 26.
What’s Next?
Paul Chan’s budget drop on Wednesday will set the stage for what’s to come. If the decision to approve basketball betting goes through, the HKJC will likely be able to offer betting on NBA matches and local games sooner rather than later, though the rules and setup will take a while. Both social opinions and expert feedback are being collected for the decision.
Conclusion
Basketball betting in Hong Kong is a practical solution to its debt problem. It certainly makes sense, given that it would rake in taxes amounting to billions, challenge the illegal market, and, most importantly, give a nod to a sport that Hong Kong already loves. But it’s not a layup. Before proceeding with this strategy, the government must mitigate the risk of addiction and public criticism.