Macau beats the odds - Tuesday 12th of April 2005
Even as the Singapore Turf Club is facing stiff competition from soccer betting, a new threat looms on the horizon with the possible introduction of a casino in the Republic. The New Paper finds out how the local turf club can take a leaf from the Macau Jockey Club's moves to ensure racing thrives in the face of such a daunting challenge
There are also more than a dozen sports betting outlets peppered across the boom city.
Despite the ever-increasing competition, betting on horses remains healthy and the privately-owned club controlled by Macau mogul Stanley Ho continues to enjoy its fair share of the gaming pie.
As Macau Jockey Club (MJC) director of racing Ian Paterson puts it succinctly in an exclusive interview with The New Paper at his Taipa office recently:
'There's a certain lure about horse-racing that will always attract the punting man or woman.
'Unlike casino games, where the player depends almost entirely on the roll of the dice, racing is not a game of pure chance.
'There's mystique and romance involved and there's always a test of a person's judgment when picking a horse to come out tops.
'There's also an element of skill involved and you can't leave it to pure chance. That's why racing will always survive.'
Despite a population of less than 500,000 to draw upon, turnover at the MJC has continued to enjoy steady growth.
Turnover, in the past few years, has jumped at least three-fold.
The MJC collects an average of HK$60 million ($12 million) per meeting or HK$5 million per race.
SECRET OF SUCCESS
So what is the secret behind the MJC's success?
'Racing in Macau has been able to co-exist with the burgeoning interest in casinos and soccer betting for quite a while because the MJC is constantly re-inventing itself.
'Better prizemoney is one move that goes down well with owners,' said Paterson.
'We have been increasing our prizemoney over the years and will continue to do so, especially for the higher classes.
'Of course, if the dividend payouts are healthy as well, punters will continue indulging in the sport.
'Our product must look favourable for the punters.'
HONG KONG TIE-UP
Its recent tie-up with the Hong Kong Jockey Club (HKJC) to televise the latter's races has raked in an additional HK$2 million ($420,000) a race.
The MJC has also benefited from the 'spillover' from the HKJC.
'Yes, we have many owners from Hong Kong who race with us because they want to be owners but are unable to do so because of the long queue at the Hong Kong Jockey Club,' said Paterson.
TOUR OPERATORS' SUPPORT
Another area that has contributed, in no small way, to the MJC coffers is its tie-up with tour operators.
This arrangement has brought busloads of mainland fun-seekers to its race meetings.
LEGAL BOOKMAKERS' BOOST
But the biggest contributor to its turnover has been the licensing of six bookmakers last year.
Under the innovative arrangement, the bookmakers are each obliged to put at least HK$2 million into the tote in each of the 100 race meetings at Taipa.
While the future looks rosy for the MJC, Paterson feels even bigger things are in store for Kranji.
'Things look good for Singapore when the new tax regime kicks in. We have not made an application to lobby for lower betting tax but will assess the situation.'
Like the HKJC, the MJC pays 12 per cent tax on turnover.
The Singapore Turf Club (STNC) could not have asked for a more timely or better fillip than the one it got from Prime Minister Lee Hsien Loong last February.
Using his annual Budget speech on 18 Feb as a platform, PM Lee announced that tax on horse-racing would be lowered by as much as 50 per cent.
NEW TAX WILL BENEFIT S'PORE
Under the new tax regime, the traditional 12 per cent take-out on gross turnover would be replaced with a 25 per cent tax on gross profit.
This reduces the take-out rate from 12 per cent to only five per cent, leaving the SNTC with an additional seven percentage points.
The effect of the historic move should not only result in higher dividend payouts from today but will, more importantly, create a level playing field with casinos which have always been taxed on gross profits.
The bold move by the government should give a much-needed boost to the local horse-racing industry.
Based on figures from the last financial year, the SNTC stands to save $112 million in taxes.
The HKJC, long regarded as the top racing centre in Asia and one of the best in the world, has hailed PM Lee's move as visionary.
Its chief executive Lawrence Wong was quoted in the South China Morning Post as saying: 'It was a progressive thing for Lee Hsien Loong to do...this should be the start of a restructuring trend among the major Asian racing countries.'
The Singapore government's move has lent more weight to a three-year call for a tax reform by the HKJC, which has seen its turnover plummeting from a high of HK$97 billion in 1997 to HK$65 billion last year.
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