Wu Youhong’s bad bet

Why a state-of-the-art racecourse is being used as a giant carpark

You might not expect the ‘sport of kings’ to hold much appeal for the leaders of Communist China. You’d be right, too.

Horseracing still doesn’t figure in the country’s sporting calendar, although not for want of trying. Banned in 1949, several Chinese cities have tried to stage events recently. Wuhan, for example, staged four races in late 2008, offering spectators ‘free bets’. Winners picked up scratch cards.

But perhaps the most ambitious attempt to revive China’s equestrian culture has taken place in Nanjing. It built Asia’s largest racecourse to coincide with its hosting of the 10th National Games in 2004. But as the Yangtze Evening News reports, the track has proven anything but a success.

In fact, to plug losses the Nanjing International Racecourse is now renting itself out for an altogether different purpose: as a car park. The Yangtze Evening News visited the course and found “thousands of new cars” parked along the track. Apparently, a local car dealer had rented the racecourse to store cars.

We reported last week that many of China’s car dealers have been strong-armed by automakers into accepting more cars than they can sell. That’s meant they’ve run out of forecourt space. Enter Nanjing’s racecourse, sprawling over 800,000 square metres and suitably flat.

But the more pertinent question is why the racecourse has had to resort to such a strategy. The newspaper’s journalist laments seeing only a dozen or so horses during his trip to the course, and that its conversion to a parking lot has enraged local horse lovers.

“I am even more distressed than them,” retorts Wu Youhong, chairman of Nanjing Horseracing Enterprise, which owns and operates the course. He says that he was forced to rent out part of the course to cover an annual operating loss of more than Rmb10 million.

As soon becomes clear, Wu knows he has gambled and made a bad bet.

Wu was one of China’s earliest entrepreneurs – his Honglong Company was even allocated Nanjing’s business code 001. As his business matured so too did his passion for horseriding. When Nanjing won the right to host the National Games, he and local officials got together and forged a vision of turning the city into the nation’s equestrian capital. The plan was to make Nanjing the ‘Newmarket of China’ and create a supply chain to support a horseracing industry.

Wu sold his business and poured hundreds of millions of yuan into building the track. He constructed a course that, he says, has the world’s widest track and most advanced drainage system. He added a grandstand capable of seating 20,000 people. “Even visitors from jockey clubs in Hong Kong and South Korea praised the racecourse unanimously,” Wu claims.

Apart from horseracing, the facility was also designed to accommodate equestrian events such as show jumping. Wu hoped that, just as Shanghai had become associated with an annual Formula 1 Grand Prix, Nanjing would become known for its horse races.

But it hasn’t worked out that way. Nanjing International Racecourse lies idle most of the time, comments the Yangtze Evening News, aside from a small breeding operation, and usage by Jiangsu province’s equestrian team for training.

Wu freely acknowledges what has gone wrong. He staked everything on the prospect of betting being legalised – a requisite for horseracing to draw crowds (nobody will go to the track if they can’t punt on the races). But that hasn’t happened.

As WiC has reported (see issues 24 and 69), gambling restrictions in China remain very much in place. Lotteries are now permitte but the vast majority of gaming goes on illegally. The sums are huge. Global People magazine, quoting an expert in lottery studies at Peking University, estimates an illegal gambling market of Rmb1 trillion ($147.5 billion) per year.

People like Wu say that, while most bets continue to be laid illegally, the taxman misses out. He argues that China should replicate Hong Kong’s approach where a jockey club has the monopoly rights on betting, but pays back the bulk of its profits as tax. A huge sum in Hong Kong goes on worthy causes, and Wu points to the Jockey Club’s support for sports grounds, hospitals and facilities for the elderly.

Wu says such a ‘horse racing lottery’ – his term for a flutter at the track – is a “public good”. He argues that it’s a lot more equitable than than the current lotteries in operation. “In those lotteries, many poor people create one rich person; while through a horse racing lottery, many rich people help the poor.”

He’s not exactly a selfless campaigner – presumably Wu wouldn’t mind seeing his racecourse packed out with frenzied punters too. But there is little sign of the government bowing to his promptings. The upshot? Nanjing International Racecourse looks like being busy only as a carpark for some years to come.

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