The Hong Kong Jockey Club Case

The Hong Kong Jockey Club (HKJS), is one of a limited number of authorized gambling organizations, was founded in 1884. The Club runs legal horse racing, football betting and lotteries. The Hong Kong Jockey Club had developed a reputation for being one of the Hong Kong’s largest charity and community benefactor. Each year the Club gives out US $128M to charity in order to serve several areas of civic demand such as community services, education and training, medical and health, and sports. Regarding to social responsibility, the Club has a strong Gambling Policy to reduce the negative impact of practicing gambling, especially under-age gambling.

Overall, HKJS club has a best management practice not like others non-profit organization. However, after the expansion in 1990s, there were several of challenges faced by the Club. By 1996, Lawrence Wong was hired as the Jockey Club’s first ethnic-Chinese CEO. Even though, Wong has no efficient experience in horses and racing, he has along experience in leadership. Wong has received his bachelor in Mechanical engineering and his Ph.D. in Gas Dynamics. Wong and his team of management made operational changes to improve service, control cost, improve accountability and promote self-compliance and they made change on the Club’s Mission and Vision statements, too. In 2003, the club won the award of Hong Kong's Top Superbrand from Superbrands magazine, also their commercial broadcast in racecourses and betting shops in different countries such as United State, Canada and Singapore.

The Club suffered from an aggressive competition from a local illegal and offshore gambling. The number of theses competitors has been increased over the years for example, the Internet gambling raise from a few sites in the mid 1990s to thousand of sites in 2005. These sites offer different option of betting and bigger payouts because they have limited regulatory constraints and they don’t have to pay tax as well as they have lower cost. Throughout the years, the HKJS club has affected by the economic fluctuations of Honk Kong in a negative way. As a result, the Club faced a decline in betting turnover after 1996/97 season, the turnover fell from $92.4 billions to $62.7 billion in the 2004/05 season. Also, It is forecasted that the racing turnover might fall by 30% to HK$45 billion by 2008 with the current duty butting structure. The club is the biggest taxpayer in the area, which the paid their tax based on the annual Club’s turnover.