China will allow horse racing and sports lotteries on the southern island of Hainan, as part of efforts to turn the province into the mainland’s biggest pilot free-trade port.
Will Hainan lure away local horse-racing fans and pose a threat to the Hong Kong Jockey Club?
I believe that is unlikely. Based on statistics in the United States, Britain, Japan and the Middle East, horse racing patrons are largely locals.
Hong Kong is no exception: locals account for more than 90 percent of the aggregate pool of bettors of the Hong Kong Jockey Club.
Local horse racing fans have a strong connection with horses and jockeys in Hong Kong; races in Hainan are unlikely to interest them.
Regarding new types of sports lotteries, the initiative was first put forward by China’s State Council in 2009. The Hainan provincial government has already started a pilot program, offering sports lotteries for the Tour of Hainan, an annual bicycle racing event on the island.
Hainan is expected to expand the sports lottery business to cover more events, such as beach volleyball, national football and volleyball leagues or international games like the FIFA World Cup.
For Macau gaming firms, the good news is that Hainan won’t be allowed to open casinos any time soon as some had speculated.
However, there is another emerging threat to Macau’s casino business: mobile games.
American millennials (those born between 1980 and 2000) are far less interested in going to a casino than Generation X and baby boomers, according to a 2016 research by Stockholm University. Instead, they are more drawn to video and mobile games.
So it remains uncertain whether casinos can attract the young generation.
Some casinos in Las Vegas are planning to introduce computer games to let gamers play popular games such as Call of Duty, Angry Birds and Candy Crush in their establishments as part of their efforts to lure young customers.
Some are studying the feasibility of opening e-sports betting businesses to help the industry keep up with the times.
This article appeared in the Hong Kong Economic Journal on April 17
Translation by Julie Zhu
[Chinese version 中文版]
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