Hong Kong is a city and a special administrative region in China and as such, it is regulated separately from mainland China. Hong Kong is one of the most densely populated cities in the world, combining residents of different nationalities. When it comes to gambling, Hong Kong has legalized a few forms of gambling that are strictly regulated by the law.
While China has banned gambling, the fact that it is legal in both Macau and Hong Kong makes the two special regions popular gambling hubs, with numerous Chinese citizens traveling to the two cities. While Macau is the destination for casino fans, such facilities have not been legalized 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 get more confusing as the current legislation deals with gaming in its traditional land-based form. That said, betting with unregulated bookmakers, whether it is online or offline, is unlawful.
Gambling Regulations in Hong Kong
Gambling is not illegal under Hong Kong’s public law, meaning that if credit is granted in any other jurisdiction of someone is given a loan for gambling, it may be enforced through the courts in Hong Kong. This is far from true for the laws in mainland China where lawsuits related to credit or loans related to gambling are not accepted. That is why it is possible for punters from mainland China to claim their gaming assets through the judicial system in Hong Kong, with the proviso they have some 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 under the category of exemptions defined by the Gambling Ordinance. The key terms that set the legal definitions of gambling can be found in Section 2 of the said piece of legislation. Under the Gambling Ordinance, “gaming”, “betting”, and “bookmaking” all constitute gambling.
Both conducting and participating in illegal gambling activities are considered an offense and so is offering the premises you own for gambling purposes. The penalties individuals may face if they are not compliant with the law include a fine of up to HK$5 million and imprisonment of up to seven years.
The purpose of this Gambling Ordinance being enacted was to regulate illegal gambling conducted at unauthorized facilities or betting with unlicensed bookmakers. Under the Gambling Ordinance, gaming activities that take place at private premises on either social or non-social occasions are not illegal.
Gambling Regulator in Hong Kong
Under the Gambling Ordinance, those who wish to operate lotteries or football betting legally will need to apply for a license. That said, currently, this sector remains monopolized, 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 is given the power to issue lotteries and betting licenses in accordance with Chapter 108 of the Betting Duty Ordinance. The same piece of legislation has also established the Betting and Lotteries Commission, with the Chief Executive choosing the members to join the authority. The Commission is responsible mainly for advising the government of the way lotteries, horse racing, and football betting are conducted as well as notifying about the issuing and revocation of licenses. It could be concluded that the Commission is having more of a consulting role rather 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. This is a racing club that is also a private club that hosts clubhouses located in Hong Kong and Beijing. Only those who have become members of the private club have the right to own horses. To join the club, applicants must be approved by voting members of the club. The private club and the betting duties of the Jockey Club are operated separately, with each division having its own management team.
Due to the taxes levied on betting activities, the Hong Kong Jockey Club has been the biggest taxpayer in the administrative district for numerous years. Funds generated thanks to the betting operations of the club go to a charity trust. Its purpose is to help the public welfare by supporting various social projects and donation campaigns.
Betting Duty in Hong Kong
As mentioned before, the Hong Kong Jockey Club was the biggest taxpayer in the administrative region for many years due to the betting duty that is levied on legal betting activities offered by the operator. The betting duty is applied to the net stake receipts that have been 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 that have been derived from the organization of football betting by a licensed operator. Only winners of cash prizes offered in lucky draws are exempted from paying a betting duty.
The betting duty rate differs according to the type of activity offered by the licensed operator.
|Type of Bets||Horse Racing Betting||Cash-Sweeps||Lotteries||Football Betting|
|Betting Duty Rate||Between 72.5% and 75% on net stake receipts for local bets on local horse races
72.5% on net stake receipts for local bets on non-local horse races
|30% on the subscriptions, contribution, or paid amount||25% on the proceeds amount||50% on net stake receipts|
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 is the law that is currently regulating gambling in Hong Kong.
Under the current law, all forms of gambling are illegal unless they are offered by licensed operators. It is the Hong Kong government that authorizes such operations, with the Hong Kong Jockey Club being the only company that has been licensed to offer lotteries, horse race betting, and football betting. While betting is legal, even 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 endeavors.
If we are talking about online gambling, things get muddier. As far as betting goes, it is strictly forbidden for unlicensed operators to offer any form of lotteries, horse race betting, or football betting. Since betting is pretty much monopolized by the Hong Kong Jockey Club, it is clear that online betting is illegal as no other bookmaker operator 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 to regulate online gaming and determine the legal consequences of playing online.