All Change in Hong Kong. . . Or is it?

27 April 2001
For years, Hong Kong has been subject to a strict legislative regime which allows gambling only on local horse racing and the Mark 6 Lottery through a monopoly operated by the Hong Kong Jockey Club. However, with legislation being reviewed on a number of fronts it appears that things are about to change. The difficulty at present is trying to predict the pace and extent of such changes.

Internet Gambling

In November last year, the Hong Kong government introduced the Gambling (Amendment) Bill, the purpose of which was to tighten the current legislative regime as it relates to Internet gambling (for a summary of the current position and the effect that the bill would have if passed into law (see "Hong Kong's Online Punters Face Uncertain Future").

As previously reported, the bill has been receiving a rough ride through the Bills Committee, which is responsible for scrutinising the bill before it is considered and voted upon by the Legislative Council. At the last meeting of the Bills Committee on 9 February 2001 many of the members of the committee took the view that the Bill should be delayed until the government has completed a full review of gambling legislation in Hong Kong. (See below.)

However, the government opted against formally delaying the bill and sought to press ahead in an attempt to plug what it considered to be loopholes being exploited by offshore bookmakers. Following the meeting of the Bills Committee on 9 February, the Home Affairs Bureau of the government was charged with tackling perceived problems with the bill (particularly how it would be enforced) and to put forward solutions in a follow up meeting.

The target date for this follow up meeting was 9 April. However, this date has come and gone and a replacement date has not yet been fixed. At this stage it is not clear when the bill will come up for further review in the Bills Committee, although it certainly will resurface at some stage. The more interesting question, particularly given the press coverage that the bill has received to date, is the extent to which the government is able to push ahead with the bill in its current form.

Soccer Gambling

Since late last year a government working group has been undertaking a review of "a wide range of gambling-related issues including the application of the [government's] gambling policy in today's circumstances." This review has been conducted behind closed doors, and until recently, only very limited information has been available on the likely results and proposals which will come out of this review.

It now appears that the main area which the working group has been concentrating on is the issue of whether soccer gambling should be legalised. In his budget speech for the year 2001/2002, the Financial Secretary, Donald Tsang, stated:

"We must face up to reality. There has been increasing interest in, and demand for, soccer betting within the community. This has become so popular that it is unlikely to be curbed. We cannot arrest all the Hong Kong residents placing illegal bets on soccer matches nor can we stifle overseas bookmaking. Rather than aiming to achieve the impossible, we should examine the case for providing a legal avenue for soccer betting. With the approach of the World Cup in 2002, we need to address the problem urgently and in a rational and objective manner."

This speech appears to anticipate the results of the working group's review of gambling legislation which is to be published in the form of a public consultation paper, probably in June. From the gambling industry's perspective, Mr. Tsang's speech is not only positive news that some forms of gambling on soccer matches may be legalised in Hong Kong but also that the government recognises that it is not in a position to "stifle overseas bookmaking." We'll have to see how this affects the progress of the current Gambling (Amendment) Bill as it relates to Internet gambling.

In the event that the government's consultation paper does indeed recommend that soccer gambling be legalised, the next question is what form such legalisation should take. Would the government try to re-mould the tote system currently used by the Hong Kong Jockey Club for use in relation to soccer gambling, or will the government take a more standard approach of allowing bets to be placed through bookmakers?

If the latter approach is adopted, would the government look to set up a non-profit organisation similar to the Jockey Club as a sole licensed bookmaker or would it seek to introduce a full blown licensing regime? Another way of looking at this is how would the government seek to obtain market share for licensed outlets, by putting into place an effective monopoly or by competing on the odds? One other important question is the extent to which the government's policy on soccer gambling will be consistent with its position on Internet gambling and the extent to which this will impact on the progress of the Gambling (Amendment) Bill.

Certainly there's a lot to consider and, with the opening match of the next World Cup due to kick off on 31 May 2002, there's not much time to spare for a potentially controversial public consultation and lengthy legislative process to be completed. For now, we'll just have to wait for the government's consultation paper to see what detailed proposals are in store.

This article was written by Rob Deans, a solicitor at Bird & Bird, Hong Kong (e-mail Rob is an expert on legal matters relating to the Internet and has advised extensively on Hong Kong’s Gambling Ordinance.