Hong Kong's stock market took a hit on Monday as the benchmark Hang Seng Index declined by 0.6%, settling at 23,341 points. The Shanghai Composite Index also faced downward pressure, ending 0.2% lower at 3,373, and the Shenzhen Component Index slipped 0.1% to close at 10,983, according to Xinhua.
While the stock market struggles raise concerns, the Hong Kong government is exploring new avenues to bolster its dwindling financial resources. One such initiative, as revealed by sources close to the administration, is the potential legalization of basketball betting aimed at tackling the city’s significant fiscal deficit, which stands at nearly HK$100 billion (approximately US$12.9 billion).
Finance chief Paul Chan Mo-po, who is expected to announce the budget shortly, has reportedly indicated the possibility of allowing the Hong Kong Jockey Club to expand its gambling offerings to include basketball. According to insiders, this approach not only seeks to increase government revenue through betting duties but also aims to attract punters currently engaging with illegal bookmakers.
Winfried Engelbrecht-Bresges, CEO of the Hong Kong Jockey Club, mentioned last year, “100,000 to 150,000 punters were using illegal bookmakers to bet on basketball.” He underscored the club’s potential to reel these individuals back to legal betting channels, projecting significant revenue growth if legalized. The estimated illegal betting on basketball alone reached around HK$350 billion last year, with basketball betting constituting 15% of this total. Engelbrecht-Bresges estimated revenues from legalized basketball betting could hit HK$52.5 billion, nearly one-third of the club's football betting turnover for the same period. Currently, the government charges 50% duty on net receipts from authorized football betting, which could be similarly applied to basketball if the legislation moves forward.
Meanwhile, Hong Kong is also making headlines for its advancements in sustainable finance. Christopher Hui Ching-yu, the Secretary for Financial Services and the Treasury, reported at a recent Mandatory Provident Fund symposium, highlighting the city’s achievements. By December, over 220 environmental, social, and governance (ESG) funds were approved, managing assets totaling HK$1.2 trillion. Hui emphasized Hong Kong’s position as a regional leader in green and sustainable bond issuance between 2021 and 2023.
Notably, the Mandatory Provident Fund (MPF) recorded impressive performance, achieving an average net return of 8.6% for 2024, with its total net asset value approaching HK$1.3 trillion by year-end. Hui reiterated the MPF system's role as the backbone of the territory’s retirement protection framework and called for continuous improvements to bolster its efficacy and resilience.
The dual focus on legalizing sports betting and enhancing sustainable finance reflects Hong Kong’s strategic response to its economic challenges. These initiatives could not only provide immediate relief to the city’s fiscal struggles but also secure long-term benefits by redirecting illegal gambling revenues and promoting responsible investment practices. Hong Kong is determined to maintain its reputation as a financial powerhouse, adapting its policies and frameworks to meet both current demands and future sustainability goals.