ANNUAL MEETING TOLD OF CRUCIAL ROLE THAT HONG KONG JOCKEY CLUB PLAYS

DESPITE the challenging economy the Hong Kong Jockey Club has contributed more than HK$15 billion to the local community for the second year in a row.

This was announced yesterday by Chairman John Chan when he reviewed highlights from season 2008-09 at the annual general meeting of the HKJC.

Mr Chan said the main components were:

· Betting duty and tax payments of HK$12.87 billion;

· A contribution to the Lotteries Fund of HK$0.96 billion;

· And donations through The Hong Kong Charities Trust totaling HK$1.37 billion, the latter being increased by some 30 per cent this year to reflect increased community needs at a difficult time.

“This underlines the crucial role that the Club plays in supporting public spending in Hong Kong, especially at a time of downturn when tax revenues from the business sector are falling, yet society's needs are becoming greater than ever,” Mr Chan said.

The Government's share of gross margin through betting duties was almost double the HKJC share, he added, and had increased since a package of horse race betting duty reforms was approved in 2006, due to Hong Kong's exceptionally high tax rates. Gross margin is the revenue remaining after payment of betting dividends and rebates, which is then subject to betting duties.

Mr Chan noted that HKJC turnover had generally remained steady in 2008-09 although its share of gross margin fell 3.9 per cent to HK$6.37 billion. Total turnover from the Club's racing, football and Mark Six lottery operations in 2008-09 was HK$108.36 billion, a decrease of 0.1 per cent from last season.

Horse racing continues to be the HKJC core activity, accounting for over 60 per cent of turnover and duty payments in 2008-09.  The Club's share of gross margin on racing fell 2.0 per cent to HK$3.09 billion. Betting duty payments to Government reached HK$8.12 billion, exceeding the HK$8 billion-a-year payment guaranteed to Government under the 2006 betting duty reforms, which meant the Club did not have to make up a shortfall as had been earlier feared.  Racing turnover was HK$66.82 billion, 1.3 per cent lower than in the previous season.

Mr Chan noted that the Club had also experienced a sharp fall in its investment income during the year, in common with all global investors, although “fortunately, we adopt a relatively long-term strategy in our investment portfolio management, so we expect to see a correction in due course”.

The Group's net surplus after tax for the season, excluding deficit from Contingency Fund investments and before appropriation to the Hong Kong Jockey Club Charities Trust, was HK$707 million.  After a HK$500 million appropriation to the Charities Trust, the retained surplus transferred to Accumulated Reserve was HK$207 million.

Despite the much-reduced appropriation of HK$500 million to the Charities Trust, compared with HK$1.78 billion in 2007-08, the Trust increased its donations to charitable and community projects during the year by some 30 per cent to HK$1.368 billion, which meant calling on its reserves.

“We are prepared to do this at times of need, but clearly we cannot allow a situation of structural deficit to prevail in the long term,” Mr Chan said, calling on Government and society at large to ensure that the Club was given room to remain competitive and sustainable.

125th Anniversary of The Hong Kong Jockey Club

Founded in 1884, The Hong Kong Jockey Club is celebrating its 125th Anniversary in 2009-10 season. Over the past 125 years, it has become one of Hong Kong’s best known and respected organizations, providing the public with world-class sporting entertainment as well as being the city's major non-Government community benefactor, now donating more than HK$1 billion a year to charitable and community projects.  It has been a part of Hong Kong through good times and bad, sharing the city's growth and development with its people, and is dedicated to enhancing the quality of life for future generations.

Season-end figures of The Hong Kong Jockey Club

1. Horse Racing ($million)

 

 

2008/09

2007/08

% Change

Turnover*

66,820

67,685

-1.3%

Betting Duty

8,120

8,286

-2.0%

Club's share of Gross Margin

3,087

3,150

-2.0%

 

* 78 race meetings in both seasons

2. Football Betting ($million)

 

2008/09

2007/08

% Change

Turnover

35,108

34,442

+1.9%

Betting Duty

2,900

3,102

-6.5%

Club's share of Gross Margin

2,900

3,102

-6.5%

3. Lottery ($million)

 

2008/09

2007/08

% Change

Turnover

6,429

6,382

+0.7%

Lottery Duty

1,607

1,596

+0.7%

Payment to Lotteries Fund

964

957

+0.7%

Club's Commission

386

383

+0.8%