The Hong Kong Jockey Club rakes in HK$60 billion a year in betting revenues - surprisingly this is near enough identical to illegal bookmakers in Hong Kong who take in between HK$50-60 billion.

The jockey club have long since tried to find ways to stop this underground betting and think they've finally come up with a solution - rebates.

From now on, the jockey club will give a rebate of 10% to losing bets above HK$10,000. They believe thats comparable to the rebates currently offered by the illegal bookies and are hopeful that this initiative will reap back between HK$5-12 billion in the first season. This would, in turn, increase betting tax revenues for the government to at least $8 billion a year.

Amendments to the law give HKJC greater flexibility to combat illegal gambling.

[Chan] said the rebates would apply to bets placed with the win, place, quinella and quinella place pools including all-up or cross-pool-all-up bets, adding those were the types on which illegal bookmakers had been offering rebates.

Chan was quick to dismiss suggestion that the rebate would fuel gambling, an observation echoed by the Home Affairs Bureau.

In a written statement announcing the issuance of a new license to the HKJC's newly established subsidiary HKJC Horse Race Betting, the Home Affairs Bureau said the license provided "a number of mandatory conditions to prevent underage and excessive gambling" to reduce adverse impact on the society to the minimum.

"The government will continue to enhance public awareness of the risk of gambling-related activities and help them better understand the gambling problem," a spokesman for the bureau said.

Article: HKJC sets 10pc rebate to battle illegal bookies