I'm glad that more than 70,000 people joined our Ladies' Purse Day race meeting Sunday and enjoyed various on-course programmes that we arranged to you all at Sha Tin. The quality of races on our Sunday's race card are as exciting as that of the Ladies' Purse Day meeting last year. But I can see that the recent global economic turmoil has already started to induce impacts to our racing industry in Hong Kong, as Sunday's turnover has already shown a staggering drop of 6.3 percent when compared to the Ladies' Purse Day last year.
I can tell you that our counterparts in North America are also feeling the pinch of the economic meltdown, as the total wagering turnover in the US dropped by 5.75 percent in the first nine months this year – their worst record since 1980. With the turnover in the third quarter even plunged by 9.8 percent when compared to same quarter last year, racing operators there now expects the annual wagering amount to be slashed by 6-7 percent at the end of this year.
Recently, few SAR Government top officials also warned that Hong Kong will not be spared from being affected by the global financial tsunami. That included Financial Secretary John Tsang, who said it will be increasingly likely for Hong Kong to experience economic recession next year, while local labour chief Matthew Cheung also expected that local unemployment rate, most prominently in financial, real estates and retail sectors, will go up again in a near future. Their comments have suggested the severity of difficulties, and the challenges that to be faced by local community in the coming year. We all in the Jockey Club are not going to take this lightly.
A few of you may wonder why the Club, as a not-for-profit organisation, needs to address that much attention to the ups and downs of racing turnover. In fact, it is impossible for us for not to be turnover-conscious, as the Club needs to provide the Government an annual tax guarantee of HK$8 billion in its racing business operation, as well as ensuring stable contributions to local charity and community projects every year.
Despite the Club has offered such a substantial revenue guarantee to the Government and charity commitments to various community groups, we, as a not-for-profit organisation, still need to pay a very high betting duty rate that equals to a minimum of 72.5 percent of the gross profits that we garnered from our racing business, which I think it has been unfair to us.
Actually, in regarding to present market sentiment, I will not be surprised if the Club will have to make up a shortfall of at least HK$250 million for the HK$8 billion guaranteed revenue to the government. However, it will be impossible for us to cope with this harsh tax level in a long run, and I think a review in the tax structure of racing and betting will be imminent.
Apart from our massive contribution to the public purse, the Club also ranks among one of the largest employers in Hong Kong, and currently hires a 20,000-strong workforce. If the Government does not implement any measures to assist local racing industry, and let the industry continue to shrink in the coming year, the Club may not be able to sustain such level of employment. On the contrary, if we have been given more flexibility in adding the number of racedays and overseas simulcast races, we may even be able to create more jobs when they are most needed in this critical period of time. I hope the government will consider this issue in a macro manner, and giving us more support to ensure the stability and sustainability of our workforce.
In fact, it's never our intention to request the Government to impose any drastic measures, but the Club hopes the Government will reconsider offering the Club with more flexibility in its racing operations, including adding the number of racedays and relaxing the current restrictions on overseas simulcast races, so as to strengthen its competitiveness in a foreseeable future. I deeply believe all these moderate changes will not impose any major impacts to the non-racing population in Hong Kong.
Although local stock markets have rebounded a bit this week, I'm still not quite optimistic with our betting turnover tonight. However, we all in the Club will still be doing our best to provide you all with best racing experiences at Happy Valley this evening. Personally, I will be paying my attention to the performances of Just Right and Diamond Supreme.
Just Right ran nicely in his first-up last month, as he finished a close fourth at just half a length behind the winner. Trainer Gary Ng has arranged Felix Coetzee to partner this five-year-old gelding tonight. I hope he can deliver an even better performance this evening. For Diamond Supreme, he failed performing his best in his last appearance at Happy Valley as he was interfered at the early stage of that five-furlong race. With Mark Du Plessis taking over Thomas Yeung on the mount this time, let's see if he will enjoy better luck when he starts the race from Gate 1 tonight.
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