12/13/2002 12:00AM

Where horse betting is king

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HONG KONG - The overwhelming popularity of horse racing in Hong Kong, and the staggering handle, is nearly incomprehensible to anyone from a country where racing usually struggles for attention. Of the seven million people who live here, 1.1 million have betting accounts through their phone or computer, and there are 120 clean, inviting offtrack betting facilities. Racing is held just twice a week - usually Wednesday night at Happy Valley and Sunday at Sha Tin - with three months off in the summer. Of the 78 cards run last year, approximately $10 billion was wagered, an average of almost $130 million per day. And that was down considerably from the previous year, mirroring the economic downturn here.

Compare that with the United States, where the Breeders' Cup card, a huge success, still falls about $40 million short of an average day in Hong Kong. In Hong Kong, more is bet on the average race than on an entire weekend card at Hollywood Park or Aqueduct.

The Hong Kong Jockey Club runs the tracks, OTB's, phone accounts - everything. The HKJC is in reality an arm of the government, and it operates with little interference. It is the only body allowed to conduct betting. Casino gambling is illegal in Hong Kong.

Still, Hong Kong's racetracks are not without competition. Mega-casinos, including one being built by Las Vegas impresario Steve Wynn, have been authorized for Macau, which is a mere one hour away by hydrofoil boat. Sports betting also is illegal in Hong Kong, but the HKJC is attempting to make inroads in that area.

The HKJC has been granted approval to be the sole entity in Hong Kong able to offer betting on soccer, which is believed to be a multi-billion dollar black-market business here. There are still some legislative and operational nuances that need to be resolved, but Ronald Arculli, the chairman of the HKJC, said he expects soccer betting could begin by August.

Arculli said betting will be on the most-popular leagues, citing top-division leagues in England, Spain, Germany, and Italy. None of the soccer revenue will subsidize race purses, but Arculli said that is because purses already are high, averaging a bit more than $1 million per day.

Because the HKJC is a nonprofit organization, and is the largest contributor to the tax base here, racing is viewed as benefiting society. Last year, the government's cut of handle through the HKJC was $1.5 billion, 11.6 percent of the total taxes collected by Hong Kong's equivalent of the Internal Revenue Service.

In addition, the HKJC donates another $120 million each year to charity. The jockey club's name and logo are painted on schools and medical centers that have benefited from its largesse.

The HKJC is hoping to trade on that goodwill to convince soccer gamblers to play through the HKJC, rather than illegal bookmakers.

"We have the credibility and the integrity," Arculli said.

No midrace odds moves here

The racing leaders who gathered at the University of Arizona symposium this week might have made good use of their time coming to Hong Kong to see the state-of-the-art technology the HKJC uses to meet the needs of its customers.

Even with the massive handle on each racing card, bets are processed swiftly, with odds updates on the tote board every 12 seconds. The machines are locked when the horses leave the gate, and the last odds-update cycle appears on the tote board 12 seconds later.

The controversy in the United States that arises when a horse's odds plummet halfway through a race or later, simply does not happen here because of the modern software. Also, because of that software, betting does not have to be shut down before horses break from the gate.

Hong Kong next year will unveil a system of timing horses that gives the exact time of every horse at intermediate position calls, as well as the finish.

In the mornings, every horse wears a specific saddle cloth with a color-coded scheme for each trainer, and a number that is unique to each runner, making clocking of workouts far more reliable than in the United States. Any trainer who would dare to switch saddle cloths to try and hide a runner is dealt with harshly.

At the stables, there are closed-circuit security monitors at each barn.

It all makes for a sport whose integrity is held in high regard, and whose popularity is at a high level.