Under starter’s orders?

Soon to return to Shanghai?

The modern Chinese word for street is malu, which translates as ‘horse road’. The term derives from the earliest race course in imperial China. Five British merchants founded the Shanghai Racing Club in 1850 and built a horse racing track in the city. The path down which the expats would ride their horses from the course to the Bund was known as the malu by Chinese onlookers.

Bets were wagered on horse racing from the early days of the track’s founding in Shanghai but in 1949 racing was banned by Mao Zedong as an “immoral pursuit”.

That makes it all the more intriguing that punting on the horses might be on the verge of being legalised again.

The latest sign of a new approach was the launch of the China Jockey Club at Beijing’s prestigious CPPCC auditorium in September. In attendance at the event was Queen Elizabeth II’s grandson, Peter Phillips, who the Daily Telegraph says has been “hired by the Chinese authorities to launch a horse racing industry to rival Britain’s”. The club intends to hold its first races next year, it said in a statement on its English language website, but the form of betting is yet to be decided.

“The China Jockey Club will set out the strategy for development of the racing industry in China, working with a number of international bodies to ensure the industry is sustainable… part of the income generated will be distributed to support public welfare and give back to society,” the statement confirmed.

A few places in China already allow horse racing but betting is still illegal. In Wuhan a millionaire called Ren Ningning built a state-of-the-art track including stands for 30,000 people but has struggled with the commercial practicalities of attracting customers. At the moment punters get involved by way of a lottery. Their tickets bear the numbers of one of the horses (brought to Wuhan by Ren from Australia, Ireland and Japan). If the horse does well, the ticket holder wins a small gift like a bottle of wine.

The only money that changes hands is the entrance fee and the spectators don’t get to choose which horse they back.

Under his stadium complex, however, Ren has already installed the infrastructure required for proper bookmaking – a gambling hall with windows for punters to place bets and the spaces for screens to display the odds.

Another city that has dreamt of becoming China’s horse racing capital is Nanjing (see WiC79).

China already runs a sports lottery and, as we pointed out in WiC244, it became much more active during the World Cup, and in a way that implied the authorities may be getting more relaxed about gambling (perhaps realising that at least Rmb1 trillion, or $163 billion, is gambled with offshore bookies already, according to estimates from Economic Information Daily).

For the first time the lottery allowed punters to make predictions about World Cup match scores this year, driving ticket sales up 93% compared to the year before. Demand was boosted by internet giants Alibaba and Tencent helping local lotteries with online sales and – in a key break with past practice – offering odds on outcomes.

While notably less generous than the terms offered by the black market offshore, any winnings at least had the advantage of being legal. (Though notably the odds-offering approach seems to have been adopted as a temporary measure during the World Cup, perhaps as an ‘unofficial’ pilot scheme.)

The hope for horse racing fans is that the government will back the China Jockey Club initiative and allow the trial of a more fully-fledged gambling system similar to Hong Kong’s. This might see the state as the only bookmaker – with a decent proportion of the financial proceeds recycled into good causes.

Keeping track: in WiC255 we looked at the prospect of China reintroducing horse racing and betting on race outcomes. News broke in Britain’s Daily Telegraph that the Queen’s own grandson – Peter Phillips – had been hired by a Chinese body to advise on the project. A statement released at the time said that the China Jockey Club would develop a sustainable Chinese racing industry, with some of the proceeds of the gaming being channelled into good causes. However, it would seem that the launch event in Beijing was part of an elaborate hoax, reports the South China Morning Post. It cited the findings of newspaper Public Interest Times, which said the China Jockey Club was not legally registered in the country and that none of the three official bodies said to have attended the launch actually did so. The Counsellors’ Office of the State Council issued a statement on its website stating that claims it had attended such an event were “seriously untrue”. Meanwhile Shanghai Morning Post reported that neither the China Welfare Lottery or China Sports Lottery had any knowledge of a new horse racing lottery. So it would seem the runners are definitely not under starter’s orders after all… (Dec 12, 2014)

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