Hong Kong Gambling Regulation

Hong Kong is a city and a special administrative region of China, and as such it is regulated separately from mainland China. Hong Kong is one of the most densely populated cities in the world and is home to residents of many nationalities. When it comes to gambling, Hong Kong has legalized only a few forms of wagering, each strictly regulated by law.

While China has outlawed gambling, the fact that it is legal in both Macau and Hong Kong makes the two special administrative regions popular gambling hubs, with numerous Chinese citizens traveling to the two cities. While Macau is the destination for casino fans, such facilities are not legal in Hong Kong. This is why the special administrative region is more suitable for those who enjoy lotteries, horse racing betting, and football betting.

As one can see, even though gambling is legal in Hong Kong, there are very few forms of the activity that can be legally enjoyed. When it comes to online gambling, however, things become more confusing because the current legislation addresses only traditional land-based gaming. That said, betting with unregulated bookmakers, whether online or offline, is unlawful.

Gambling Regulations in Hong Kong

Gambling is not illegal under Hong Kong’s public law, which means that if credit is granted in another jurisdiction, or someone is given a loan for gambling, the debt can be enforced through the Hong Kong courts. The situation is very different in mainland China, where lawsuits involving gambling-related credit or loans are not accepted. Therefore, bettors from mainland China can claim their gaming assets through the Hong Kong judicial system, provided they possess assets in Hong Kong.

The main piece of legislation that regulates gambling in Hong Kong is the Gambling Ordinance (Cap.148). Under this law, gambling in Hong Kong is illegal unless it falls within the exemptions defined by the Gambling Ordinance. The key terms that establish the legal definitions of gambling are set out in Section 2 of this legislation. Under the Gambling Ordinance, “gaming”, “betting”, and “bookmaking” all constitute gambling.

Both conducting and participating in illegal gambling activities are offenses, as is providing premises for gambling purposes. Penalties for non-compliance include fines of up to HK$5 million and imprisonment of up to seven years.

The Gambling Ordinance was enacted to curb illegal gambling at unauthorized facilities and betting with unlicensed bookmakers. Under the Ordinance, gaming activities that take place at private premises on either social or non-social occasions are not illegal.

Gaming in Hong Kong

Horse Racing and Football Betting in Hong Kong

Legal Wager According to Hong Kong Legislation

Online Gambling in Hong Kong

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Gaming in Hong Kong

As mentioned above, “gaming” is one of the subcategories of gambling regulated by the Gambling Ordinance and is considered illegal. The term applies to games of chance, games that combine skill and chance, or pretended games of chance. Regarding the act of “gaming,” the law defines it as playing any game for money or other property, regardless of whether any participant may lose money or property.

Because of the broad definitions of “game” and “gaming”, any game that involves an element of chance and offers players the opportunity to win something can be classified as gambling. Consequently, such games are illegal in Hong Kong. A typical example is a lucky draw, which may also be described as a lottery. To offer a lucky draw legally, the operator must obtain a license and comply with the conditions set out in the permit.

If we apply the same definitions to online games that allow players to win money or other property, they also fall under the category of “illegal gaming.” Usually, players participate in online gaming from their own homes on personal computers or smart devices. For this reason, such individuals cannot be prosecuted for illegal gambling at a gambling establishment, because gaming websites do not meet the definition of a “gambling establishment” under the Gambling Ordinance.

Under current law, online gaming may be deemed illegal if the operator offering the games is located in the same place as the bettors. While that scenario is not impossible, it is highly unlikely, which is why the law is rarely used against online gaming operators or players. The gap in Hong Kong’s current gambling legislation does not suggest that playing online poker or casino games at home is legal. However, even if online operators or players are prosecuted, it is unclear what specific offense would be alleged.

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Horse Racing and Football Betting in Hong Kong

Historically, the Gambling Ordinance was enacted primarily to regulate betting, which is why the rules governing this form of gambling are clearer than those for gaming. Under Section 8 of the Gambling Ordinance, placing a bet with a bookmaker, whether the wager is made outside or within Hong Kong, is illegal.

Operations carried out by unlicensed bookmakers are also unlawful under the same legislation. There is, however, a specific exception for bookmakers licensed under the Betting Duties Ordinance. Currently, the only operator licensed to offer betting legally in the special administrative region is the Hong Kong Jockey Club.

Because the law permits betting only through the licensed operator, online betting with any other provider is illegal. While local law enforcement makes limited efforts to detect bettors wagering online illegally, offshore bookmakers often block access to their websites for users from Hong Kong.

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Legal Wager According to Hong Kong Legislation

It is possible for individuals to place bets against one another provided none of the participants is a bookmaker. This activity is known as making a “wager,” and it is not unlawful under the legislation. The Gambling Ordinance contains no definition of “wager,” so the law governing gaming contracts in Hong Kong is usually applied. Some judicial definitions describe “wagering” as an activity involving only two people who bet against each other and agree that one of them will win from the other. Nonetheless, wagering in Hong Kong is generally viewed as an activity that can involve more than two individuals. In such cases, the bets collected from all participants form a mutual fund that is later paid to the winner. The single condition for this activity to be lawful is that none of the bettors acts as a bookmaker.

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Online Gambling in Hong Kong

We discussed online gambling earlier and noted that its legality under the Gambling Ordinance is somewhat unclear. Because the law was enacted mainly to regulate betting, betting is the only form of gambling that is definitively illegal online when it is not provided by a licensed operator.

At present, betting is monopolized by the Hong Kong Jockey Club, which means any other operator offering betting services to Hong Kong residents is committing an offense. Joining such bookmakers and placing bets is also illegal under the Gambling Ordinance.

Although the restrictions on betting are clear, the distinction between legal and illegal online casino-type games is less defined. The current gambling law does not include a specific definition of online gaming, so many people turn to offshore sites to play. While this activity cannot be considered legal, until the current legal framework in Hong Kong is amended, it is difficult to prosecute either online gaming participants or virtual casino operators that accept Hong Kong players.

Gambling Regulator in Hong Kong

Under the Gambling Ordinance, those who wish to operate lotteries or football betting legally must obtain a license. That said, the sector remains a monopoly, with the Hong Kong Jockey Club being the only operator authorized to offer lotteries and bookmaker services. The license authorizing the company to conduct these activities was issued by the government of Hong Kong.

The government has the power to issue lottery and betting licenses in accordance with Chapter 108 of the Betting Duty Ordinance. The same piece of legislation also established the Betting and Lotteries Commission, with the Chief Executive appointing its members. The Commission is primarily responsible for advising the government on how lotteries, horse racing, and football betting are conducted, as well as for notifying it about the issuance and revocation of licenses. It can be concluded that the Commission plays more of a consulting role than a regulatory one, and the government is the only authority that can issue or suspend licenses.

As already mentioned, the Hong Kong Jockey Club is the only licensed operator in the administrative region. It is a racing club and a private club with clubhouses in Hong Kong and Beijing. Only members of the private club may own horses. To join, applicants must be approved by voting members of the club. The private club and the betting operations of the Jockey Club are run separately, with each division having its own management team.

Because of the taxes levied on betting activities, the Hong Kong Jockey Club has been the largest taxpayer in the administrative region for many years. Funds generated by the club’s betting operations go to a charitable trust. Its purpose is to support public welfare by funding various social projects and donation campaigns.

Betting Duty in Hong Kong

As mentioned earlier, the Hong Kong Jockey Club has been the largest taxpayer in the administrative region for many years because of the betting duty levied on its legal betting activities. The betting duty is applied to the net stake receipts derived from the organization of horse racing betting by a licensed operator. The same tax is also charged on the subscriptions or contributions to licensed cash-sweeps, lottery games offered by authorized operators, and the net stake receipts derived from the organization of football betting by a licensed operator. Only winners of cash prizes offered in lucky draws are exempt from paying the betting duty.

The betting duty rate differs depending on the type of activity offered by the licensed operator.

Closing Thoughts

Although Macau is a popular casino hub for Chinese and many international gaming fans, Hong Kong is also known for offering legal gambling. That said, this industry is strictly regulated, and very few activities have been decriminalized under the Gambling Ordinance. This piece of legislation regulates gambling in Hong Kong.

Under the current law, all forms of gambling are illegal unless they are offered by licensed operators. The Hong Kong government authorizes such operations, with the Hong Kong Jockey Club being the only company licensed to offer lotteries, horse racing betting, and football betting. While betting is legal, albeit in a very restrictive form, land-based casinos are illegal in Hong Kong. This forces many residents of the city to travel to Macau for their casino activities.

When it comes to online gambling, things get muddier. Unlicensed operators are strictly forbidden to offer any form of lotteries, horse racing betting, or football betting. Because betting is effectively monopolized by the Hong Kong Jockey Club, online betting is illegal, as no other bookmaker can apply for an online betting license. Meanwhile, the lack of any definition of online gaming makes the legality of online casino wagering uncertain. While such activities may be illegal, there is no section in the law that regulates online gaming or outlines the legal consequences of playing online.