The financial problems of the historic Macau Jockey Club track are not a recent issue, but the possible closure of the racetrack has never generated as much discussion as it has now. Zeng Zhonglu, coordinating professor of the Pedagogical and Scientific Centre for Gaming and Tourism at the Polytechnic University of Macau (UPM), told PLATFORM that the Macau Jockey Club has several serious problems, mainly the high volume of accumulated losses and the increased competition in the region. “At this point, it is relatively difficult for the Macau Jockey Club to become profitable again, so either the government will not renew the contract due to non-compliance, or the Jockey Club will choose to cease its activity.”
The professor also compares the impressive performance of the neighbouring Hong Kong Jockey Club. For the researcher, the local racecourse’s facilities are “outdated” and its tourist attractiveness is “limited”, with its continuation making no sense if the Club cannot reach a long-term solution to its losses.
Analysing from the perspective of the development of the local gambling industry, Zeng believes that horse racing as a gambling activity has some relevance to the diversification of Macau’s gambling, but stresses that profitability is also an important factor in diversification efforts. “If there is no prospect of profitability, there is no point in talking about gambling diversification,” he notes.
Little social impact
The researcher also emphasises that the closure of the Jockey Club would not have a significant impact on the Macau community. “The closure would mean ‘eliminating’ animals and staff, but it would not affect Macau’s overall economy and the development of the gaming sector,” he points out.
The Macau Jockey Club recorded accumulated losses of 2.1 billion patacas until 2022, an increase of around 200 million patacas compared to the same period last year, with horse racing revenues falling from 47 million patacas in 2022 to 39 million patacas in 2021. Horse race betting contributed 22 million patacas to gross gaming revenue in the first half of the year, with Macau’s overall gross gaming revenue reaching 80.4 billion patacas in the first six months of the year.
In terms of volume, football betting contributed 183 million patacas to total betting revenue in the first half of 2023, with horse racing accounting for just a tenth of that figure, accounting for less than 0.3 per cent of total betting revenue in the Macau SAR.
The number of horses in Macau has also decreased from a high of 1,200 20 years ago to around 220 today, with the number of races per year falling from 1,200 in 2003 to just one race per week today. The number of workers has also not increased since the beginning of the pandemic and the process of recruiting new employees has been suspended.
Sources at the Jockey Club also told PLATAFORMA that some members of the club, as well as racehorse owners, feel that the ancillary services are “getting worse and worse” and have confessed that they want to leave the Club.
In 2018, the Macau government revealed that the Jockey Club owed the state around 150 million dollars in taxes. Even so, it granted a 24 and a half year extension to the racetrack concession.
As a requirement for the renewal of the contract, the Club’s management promised to settle the tax arrears within three years and invest 1.5 billion patacas to increase non-gambling elements, including a riding school, amusement parks, hotels, gourmet shopping centres, etc. However, five and a half years after the concession contract was renewed at the end of February 2018, the promised investment plan has still not been implemented.
MP defends “transition period”
MP Leong Sun Iok told PLATFORM that most gambling companies are still in a period of recovery, as the pandemic has brought unprecedented challenges to Macau’s economy. Faced with this circumstance, he understands the Jockey Club’s inability to fulfil its promises and argues that there should be a “transition period”. “The government should provide assistance to companies according to their real situation, instead of suddenly pushing them into a desperate situation,” he emphasises.
The MP stresses that a “transition period” doesn’t mean that companies won’t be held responsible, as they have to pay taxes and honour their contracts, but points out that more time is needed to assess the real situation. Leong recalls that when the canidrome closed in 2008 – a gambling concession also linked to businesswoman Angela Leong On Kei – there was tripartite consultation between the government, the workers and the company, so there was no major social impact.
The MP also emphasised that the Macau Jockey Club is linked to Sociedade de Turismo e Diversões de Macau, S.A. (STDM), a large company in Macau, so the government should maintain proper communication and try to safeguard the rights and interests of the employees. Last month, TDM Canal Macau reported that the Jockey Club had decided to lay off 82 employees, but reversed its decision after pressure from the government.
The Macau Jockey Club told the media that it had submitted a request to the Macao SAR government for a calendar for the next horse racing season, which was due to run from September to September.
