Jenny - Clean

THE thoroughbred world's betting benchmark is ominously rattling the co-mingling tin. Hong Kong authorities are even willing to leave the Chinese government behind in a bid to tap into new income streams.

Why else would the thoroughbred betting mecca be willing to set up offshore? asks CRAIG YOUNG, Racing Editor of THE SYDNEY MORNING HERALD.

The government there just cannot get its head around co-mingling, but then again China's leaders have more to worry about than racing. Maybe they will leave racing to its own devices. Heading the Hong Kong racing team is a German mover and shaker named Winfried Engelbrecht-Bresges.

Regarded by many as the best racing administrator in the world, Engelbrecht-Bresges has been banging on about co-mingling for many years. If he is correct, the time to act is now.

Co-mingling with pools in Britain, Singapore, South Africa, Canada and Australia is on the agenda. You can bet this guy has his eyes on a host of other thoroughbred nations. What about one giant betting pool? quoted Engelbrecht-Bresges on the subject last week. The Hong Kong Jockey Club supremo talked about the government working through ''taxation hurdles'', but reckons they shouldn't be a roadblock.

''If you compare, for example, co-mingling figures, 70 per cent of the world turnover in separate tote pools in any event, like the [Prix de] l'Arc de Triomphe, was done in Hong Kong,'' Engelbrecht-Bresges was quoted as saying. ''If you look at the Melbourne Cup, 65 per cent of the world turnover on the Melbourne Cup was from Hong Kong.''

Of course, each jurisdiction must receive a slice of the betting revenue. Now that is certain to be tricky. One can only imagine the bickering. Remember, it is all about money. Australian racing doesn't even have one TAB pool. Merging to create a super TAB on these shores has been on the agenda for decades but it is just talk. State government and industry self-interest always wins out.

The racing industry cannot even work out a national set of rules. State and territories have local rules. It shouldn't be that way. Surely, the industry would be better served with everyone competing under the one set of laws. There is no national stewards panel. There is no national race program. The handicapping system various from state to state. Licensing is done state by state. None of it makes any sense.

Then you've got betting taxes. Victoria and Queensland are happy to take a slice of the corporate betting houses' income based on gross profit. NSW is being challenged by a couple of corporates in the High Court over the state's racing regulator opting for a turnover tax of 1.5 per cent.

So how is Australian racing going to handle Hong Kong's offer to co-mingle? By arguing?

''We have huge illegal exchanges operating just outside our door, and with other countries banding together in a co-mingling hub to take legal bets between different nations, the external forces on all sides are building up and we are going to be shut out,'' Engelbrecht-Bresges told the South China Morning Post's Alan Aitken in September. ''We don't live in a vacuum - ultimately, these operations can endanger our business right here.''

The problem being, the HKJC government masters don't want to change the takeout rates that make it unviable for other nations to join in. Engelbrecht-Bresges is willing to take less to make more.

As Aitken pointed out earlier this year, ''Australia's Tabcorp and Phumelela, of South Africa, agreed to set up a global hub, overcoming technological barriers to exchanging bets between different jurisdictions, but also based in a tax haven to enable aggressive pricing. And this development has the Jockey Club worried.'' Should Australian racing be worried?



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