Hong Kong Jockey Club Looks Forward to 2020-21 Season

Racing has been hit hard worldwide by the COVID-19 pandemic. But few, if any, jurisdictions endured anything like the string of challenges that faced the Hong Kong Jockey Club during its 2019-20 season.

Now, with that crisis weathered, the 126-year-old organization looks forward to the Sept. 6 start of the 2020-21 season with massive purse increases and confidence that fans and owners remain firmly on board.

The 2019-20 campaign opened to the backdrop of disruptive and sometimes violent street demonstrations. Those forced cancellation of two race meetings at the iconic, in-town Happy Valley track and the on-again, off-again closures of many of the HKJC's off-track wagering facilities.

The Longines Hong Kong International Races were run in December in front of a crowd intentionally held down because of the threat of nearby violence. Japanese star Almond Eye backed out at the last minute.

Then the pandemic struck, and fans essentially were banned from all facilities for the rest of the season. Yet the HKJC's financial results remained strong with overall turnover down only 2% from the previous season. And, bucking the worldwide trend toward steep purse reductions, the club announced massive hikes for the 2020-21 season, reaching all levels of competition but targeting the 12 international races.

HKJC CEO Winfried Engelbrecht-Bresges discussed some of the challenges, the club's response, and hopes for the Sept. 6 season opener, exclusively for BloodHorse.

His overriding emotion, looking back on the season, is appreciation for HKJC staff, the club's owners, and Hong Kong racing fans. Support in the face of adversity, he said, was earned by the HKJC's years of support for the community.

"Our mind is with the people of Hong Kong, particularly the vulnerable members of the community," Engelbrecht-Bresges said. "As our purpose is to act for the betterment of our society, we are more focused than ever on supporting and building the resilience of the community.

"The club … contributes to the community through direct taxation to the government. The club is also one of the largest employers providing job opportunities for 25,000 people. The club has earned a reputation and trust that all we do is not for ourselves but for the benefits of the public."

Taxes paid for the 2018-19 season, he said, totaled HK$23.3 billion, or about US$3 billion. Charitable donations amounted to HK$4.3 billion for the same period, about US$550 million.

"I am also glad to see that most, if not all, of our racing fans and customers have shown their understanding and support for our stringent public health measures," he said, "under which for the majority of the period from 27 January (the Chinese New Year meeting) to the end of the season, we had to ban most of our racing public from attending race meetings, so as to comply with government instructions related to gathering ban, social distancing, and other public health directives."

The deepest impact on fans, he said, "was between March and April, which saw attendance reduced from 22,000 before the outbreak to around 300. A lot of our longtime customers could not enjoy on-site racing experience, and I would like to offer my apologies to them again and hope for their understanding and continual support."

The impact of the no-fans dictum was mitigated by technology, Engelbrecht-Bresges said.

"Thanks to our ongoing strategies in developing our customers' racing and betting experience via interactive online platform, such as eWin, Racing Touch, and HKJC TV App, we have been able to connect with most of our racing customers amid the coronavirus pandemic," he added.

"Racing fans were able to seamlessly watch and wager on every race, through the club's robust online and mobile channels. Around 75% of our racing fans could continue participating in racing via online channels, even when the club had to close all the Off Course Betting Branches since early February.

"Hong Kong's racing turnover in 2019-20 season is HK$121.6 billion (about US$15.7 billion), only down by 2% when compared with 2018-19, with OCBBs being closed or operated in a reduced mode for 47 race meetings out of 87 races for the entire season. It is the third-highest season turnover despite such a challenging situation."

The CEO also credited aggressive, long-term efforts to promote simulcasting and comingling, which brought substantial new turnover from abroad into the already massive Hong Kong pools and afforded Hong Kong fans the opportunity to wager on some of the world's top racing events.

"Commingling continues to be a huge growth area for the club. In the 2019-20 season, commingling turnover has achieved a record high of HK$23.58 billion (about US$3 billion), up by 25.3% than the previous season," he said. "This demonstrated once again the strategic value of commingling whereby people from around the world participate and bet on Hong Kong racing.

"We have further developed the commingling business, with over 50 commingling partners in 27 countries and jurisdictions."

Asked where in the world the club seeks commingling support, Engelbrecht-Bresges said while he does not "tend not to go into details about where most of our commingling turnover came from, I could say there has been keen interest from our customers in the U.S., the UK, and Australia.

"Regarding simulcast races, our racing fans in Hong Kong continued to show a growing interest in the sport overseas, as evidenced by a 12.9% increase in the club's simulcast turnover. Furthermore, we are pleased to see there is a tremendous interest of our customers in our simulcast programs of leading global race meetings.

"The result of the second World Pool at Royal Ascot in June is particularly encouraging. The total turnover has increased significantly by more than 49% than that in 2019. We look forward to expanding the World Pool concept next season, with Hong Kong as a vital hub for global wagering."

Engelbrecht-Bresges said the HKJC is taking an aggressive, not defensive, approach to the new season. Despite all the twists and turns of the 2019-20 season, the club announced substantial purse increases at all levels for 2020-21, bucking the worldwide trend of substantial prize money reductions.

Total prize money for the 88 meetings will increase about 4.9% across most classes, with a special increase for group 1 races with total prize money in Hong Kong rising to a record HK$1.4 billion. Hong Kong, the CEO said, once again will host the world's richest turf races over 1,400 meters, 1,600 meters, and 2,000 meters, and also will have the world's richest turf sprint and second-richest Derby.

"It is always the club's objective to continuously enhance the quality of Hong Kong racing and to be a world leader in the provision of world class horse racing," Engelbrecht-Bresges said.

While the increases for its 12 international group 1 races clearly are designed to lure more foreign horses, Engelbrecht-Bresges said the decision also was taken to reward and further encourage local owners.

Owner membership in the club is an exclusive and coveted status and carries significant status in Hong Kong. Owners' ability to leverage their club memberships to social advantage was severely impacted in the 2019-20.

"We believe in the future of Hong Kong racing, and therefore we have to entice owners to bring in more top quality horses. It is important to note that the overall prize money increase includes general prize money rises, plus other major uplift of purses for our pattern races and classic events," Engelbrecht-Bresges said.

At the start of the COVID-19 outbreak in late March and early April, he said, "We significantly reduced the number of attendance to racecourse on a race day. Apart from essential officials and parties who support the operation of a race meeting, only owners with starters with advance table booking are permitted to enter the racecourse. … There were no celebratory activities during the race meeting. Not even photo-taking at the winning arch after each race.

"Nonetheless, most of our owners remain supportive to our special arrangements as they shared our goal to keep racing going. I can feel their passion in horse racing and their trust to the risk assessment and mitigations of the club.

"Our owners' continuous support was further reflected by the number of applications for the 2021-22 Horse Import Permits. Against the background of the COVID-19 pandemic and the pessimistic economic outlook, the number of applications only decreased by 16%.

"I sincerely would like to thank for our owners' understanding and support. I hope that they will resonate with our continuous commitment and efforts to promote Hong Kong world class racing, including the increase of the prize money by 5% in the new season."