Posts
The Hong Kong Jockey Club
World's Most Profitable "Non-Profit"
THE ASIAN HOUSE ALWAYS WINS — Post 3 | February 2026
Post 1: The $850 Billion Question — Asia's underground empire
Post 2: The Singapore Model — Government monopoly extraction
Post 3: The Hong Kong Jockey Club ← YOU ARE HERE — Most profitable "non-profit"
Post 4: The Chinese Underground — $145B+ online, 50% of global market
Post 5: The Human Cost — Where money flows, chains follow
Post 6: The Crypto Revolution — Blockchain betting pioneered in Asia
Post 7: The Global Pattern — NFL to FIFA to $850B Asia
The Structure: Non-Profit in Name Only
The Hong Kong Jockey Club was founded in 1884 as a members' club for British colonial elites to race horses. Over 140 years, it evolved into Hong Kong's gambling monopoly.
Today, the HKJC operates:
- Horse racing: Two racecourses (Happy Valley and Sha Tin), 88 race days per year
- Football betting: Legal betting on international football matches
- Mark Six lottery: Hong Kong's official lottery game
It is the only legal provider of these gambling services in Hong Kong. All competitors are illegal.
The HKJC is registered as a non-profit charitable organization. This means:
- It pays no corporate tax on profits
- It's governed by a board of stewards (not shareholders)
- It's required to use surplus revenue for "charitable purposes"
But "charitable purposes" includes:
- Paying betting duty to the Hong Kong government (HK$30+ billion annually)
- Funding HKJC Charities Trust (community programs, scholarships, medical facilities)
- Operating the Club's own facilities and paying executives
The "non-profit" label obscures what the HKJC actually is: a government-protected gambling monopoly that generates tens of billions in revenue annually.
The Numbers: HK$320 Billion Turnover, 72% EBITDA Margin
The HKJC publishes annual reports. Here's what FY2024/25 shows:
Total turnover (wagering + lottery): HK$320.3 billion (~US$41 billion)
Breakdown:
- Horse racing: HK$138.5 billion
- Football betting: HK$173 billion
- Mark Six lottery: HK$8.8 billion
Total revenue: HK$49.3 billion
EBITDA: HK$35.3 billion
EBITDA margin: 72%
Let that sink in. 72% EBITDA margin.
For context:
- Apple's EBITDA margin: ~33%
- Microsoft's EBITDA margin: ~52%
- Most profitable Las Vegas casinos: 30-40% EBITDA margin
The Hong Kong Jockey Club has higher margins than Apple, Microsoft, and the best Las Vegas casinos.
Why? Monopoly power.
Where does the money go?
- Contributions to community: HK$39.1 billion (~US$5 billion)
- To Hong Kong government (betting duty/taxes): HK$30.1 billion (~US$3.8 billion)
- To HKJC Charities Trust: HK$9 billion (~US$1.2 billion) funding 202 charity projects
So the HKJC paid HK$30.1 billion to the Hong Kong government in FY2024/25. This makes it one of Hong Kong's largest "taxpayers" — despite being a tax-exempt charity.
TOTAL TURNOVER: HK$320.3 billion (~US$41 billion)
• Horse racing: HK$138.5B
• Football betting: HK$173B
• Mark Six lottery: HK$8.8B
TOTAL REVENUE: HK$49.3 billion
EBITDA: HK$35.3 billion
EBITDA MARGIN: 72%
COMPARISON TO FOR-PROFIT COMPANIES:
• HKJC: 72% EBITDA margin
• Apple: ~33%
• Microsoft: ~52%
• Las Vegas casinos (best): 30-40%
• HKJC has higher margins than world’s most profitable tech companies
WHERE MONEY GOES:
• To HK government (betting duty/taxes): HK$30.1B (~US$3.8B)
• To HKJC Charities Trust: HK$9B (~US$1.2B)
• Total contributions: HK$39.1B (~US$5B)
KEY INSIGHT:
Government gets HK$30.1B (77% of contributions)
Charities get HK$9B (23% of contributions)
“Non-profit charity” pays government 3.4x more than actual charities
The Monopoly Structure
The HKJC's 72% margins aren't magic. They're monopoly power.
In Hong Kong, it is illegal to:
- Operate horse racing without HKJC license (no other licenses exist)
- Operate sports betting without HKJC license (no other licenses exist)
- Operate a lottery without government authorization (only HKJC has authorization for Mark Six)
Penalties for illegal gambling operations:
- Bookmaking: Up to HK$5 million fine and 7 years imprisonment
- Promoting illegal gambling: Up to HK$5 million fine and 7 years imprisonment
Hong Kong also aggressively blocks offshore gambling websites and prosecutes underground bookmakers.
The result: HKJC has zero legal competition.
If you're in Hong Kong and want to bet legally on:
- Horse racing → HKJC only
- Football → HKJC only
- Lottery → HKJC only
No alternatives. No competition. HKJC sets the odds. Take it or break the law.
Compare to competitive markets:
United Kingdom:
- Dozens of licensed bookmakers compete
- Bet365, William Hill, Ladbrokes, Paddy Power, etc.
- Competition drives margins down (typical hold: 5-8%)
- Consumers benefit from competitive odds and promotions
Hong Kong:
- One operator (HKJC)
- No competition
- 72% EBITDA margin (monopoly extraction)
- Consumers have no alternatives (except illegal operators)
The monopoly structure is what enables 72% margins. No competition means no pressure to offer better odds or lower margins.
HONG KONG LAW:
• Illegal to operate horse racing without license (only HKJC has license)
• Illegal to operate sports betting without license (only HKJC has license)
• Illegal to operate lottery without authorization (only HKJC authorized)
• Penalties: Up to HK$5M fine + 7 years prison
ENFORCEMENT:
• Hong Kong blocks offshore gambling sites
• Police prosecute underground bookmakers
• Regular raids and arrests
• Zero tolerance for competition
RESULT:
HKJC has zero legal competition for horse racing, football betting, lottery
Can set odds/margins at whatever level maximizes revenue
No pressure to offer competitive odds (consumers have no alternative)
72% EBITDA margin = monopoly extraction
COMPARE TO COMPETITIVE UK MARKET:
• Dozens of bookmakers competing
• Typical margins: 5-8%
• Competition benefits consumers (better odds, promotions)
• HKJC margins are 9-14x higher than competitive UK market
Monopoly isn’t incidental to HKJC’s model. It IS the model.
The Government Dependency
HK$30.1 billion paid to Hong Kong government annually is massive.
To put it in context:
Hong Kong government total revenue (FY2023/24): Approximately HK$660 billion
HKJC contribution: HK$30.1 billion
Percentage: ~4.6% of total government revenue
That might not sound huge. But consider:
- 4.6% is larger than many entire government departments' budgets
- It's one of the single largest revenue sources (alongside salaries tax, profits tax, stamp duty)
- It's been consistent for decades (HKJC has paid billions to government annually since the 1980s)
- It's politically popular (framed as "voluntary" since people choose to gamble)
And historically, the dependency was even higher:
- 1990s-2000s: Gambling-related revenue (HKJC + horse racing duty) accounted for 10-15% of Hong Kong government revenue
- Hong Kong's economy has diversified since then, but HKJC revenue remains significant
The Hong Kong government depends on HKJC revenue.
Which means:
- Government will never allow real competition (would reduce HKJC margins and thus government revenue)
- Government will protect HKJC monopoly indefinitely
- Reforms that would hurt HKJC revenue won't happen (even if they'd benefit consumers)
The relationship is symbiotic:
- HKJC gets monopoly protection (no legal competition)
- Government gets HK$30+ billion annually
- Both benefit from maintaining the status quo
This is regulatory capture at the highest level. The regulator (HK government) is economically dependent on the monopoly (HKJC) it's supposed to oversee.
The "Non-Profit" Label: What It Hides
The HKJC's "non-profit charity" status obscures several things:
1. Executive Compensation
HKJC doesn't publish detailed executive compensation. But investigations by South China Morning Post and other outlets have documented:
- HKJC CEO earns multi-million dollar salary (estimates: HK$10-20 million+ annually)
- Senior executives earn millions
- Total executive compensation is substantial (though exact figures not publicly disclosed)
For a "charity," the HKJC pays its executives like a Fortune 500 corporation.
2. Governance Opacity
HKJC is governed by a board of stewards appointed through a private selection process. The stewards are Hong Kong's elite:
- Business tycoons
- Former government officials
- Prominent community leaders
The selection process is opaque. There's no public application. Stewards appoint new stewards.
This creates a self-perpetuating elite club controlling Hong Kong's gambling monopoly.
3. The "Charity" Framing
HKJC markets itself heavily as a charitable organization:
- "Hong Kong's premier charity"
- "Committed to community service"
- "Supporting education, health, social welfare"
And the HKJC Charities Trust does fund real charitable work:
- HK$9 billion in FY2024/25
- 202 charity projects funded
- Medical facilities, schools, community centers
But the framing obscures the fact that:
- HK$30.1 billion goes to government (3.4x more than actual charities)
- The "charity" operates a gambling monopoly with 72% margins
- Executives earn millions
- It's structured to extract maximum revenue, not minimize gambling harm
The "non-profit charity" label is a legal fiction that masks monopoly extraction.
WHAT “NON-PROFIT CHARITY” SUGGESTS:
• Organization exists to serve public good
• No profit motive
• Revenue goes to charitable causes
• Minimal executive compensation
• Transparent governance
WHAT HKJC ACTUALLY DOES:
• Operates gambling monopoly with 72% EBITDA margin
• Pays HK$30.1B to government (3.4x more than actual charities)
• CEO earns HK$10-20M+ annually (estimates, not publicly disclosed)
• Governance: Opaque, self-perpetuating elite board
• Structured to maximize revenue, not minimize harm
WHERE “CHARITY” MONEY GOES:
• To government: HK$30.1B (77% of contributions)
• To actual charities: HK$9B (23% of contributions)
• Most “charity” money goes to government, not charities
WHY “NON-PROFIT” STATUS MATTERS:
• HKJC pays no corporate tax (exempt as charity)
• If it were for-profit, would pay 16.5% corporate tax on profits
• “Non-profit” label provides tax exemption worth billions
• While operating exactly like for-profit monopoly
THE REALITY:
HKJC is a government-protected gambling monopoly that generates HK$35B+ in
EBITDA annually, pays executives millions, and sends 77% of “charitable
contributions” to government. The “non-profit” label is fiction.
Compare to Singapore Pools
In Post 2, we documented Singapore Pools: government-owned monopoly with 26% hold, generating S$2.28 billion for Singapore government.
How does HKJC compare?
SINGAPORE POOLS:
• Structure: 100% government-owned
• Turnover: S$12.7B (~US$9.5B)
• Hold: 26%
• Government revenue: S$2.28B (~US$1.7B) annually
• Framing: “Safe alternative to illegal gambling”
• Tax status: Government entity (no corporate tax)
HONG KONG JOCKEY CLUB:
• Structure: “Non-profit charity” (private, not government-owned)
• Turnover: HK$320.3B (~US$41B)
• EBITDA margin: 72%
• Government revenue: HK$30.1B (~US$3.8B) annually
• Framing: “Premier charity supporting community”
• Tax status: Tax-exempt (registered charity)
KEY DIFFERENCES:
• Singapore: Government owns operator directly
• Hong Kong: Private “charity” operates monopoly, pays government
• Singapore: 26% extraction rate
• Hong Kong: 72% EBITDA margin (much higher extraction)
• Singapore: S$2.28B to government
• Hong Kong: HK$30.1B to government (1.7x more in absolute terms)
SIMILARITY:
Both are government-protected monopolies that generate billions annually.
Both frame extraction as serving public good (“harm reduction” or “charity”).
Both prevent competition to maintain high margins and government revenue.
The International Comparison: HKJC vs World's Largest Gambling Operators
How does HKJC's HK$320 billion (~US$41 billion) turnover compare to the world's largest gambling companies?
Global gambling giants (2023-2024 figures):
- Flutter Entertainment (owns FanDuel, PokerStars, Paddy Power): ~US$27 billion revenue
- MGM Resorts: ~US$15 billion revenue
- Caesars Entertainment: ~US$11 billion revenue
- Las Vegas Sands: ~US$10 billion revenue
Hong Kong Jockey Club: ~US$41 billion turnover (not revenue, but total wagered)
HKJC's turnover is larger than the world's biggest for-profit gambling corporations. And it operates in a single city of 7.5 million people.
For context:
- Flutter operates globally (dozens of countries)
- MGM has dozens of properties worldwide
- HKJC operates in Hong Kong only
And HKJC has 72% EBITDA margins — far higher than any of these for-profit operators.
Why? Monopoly.
What Happens If Competition Were Allowed
Let's imagine Hong Kong legalized competitive gambling (like the UK model):
Scenario: Hong Kong allows multiple licensed bookmakers
- Bet365, William Hill, Ladbrokes enter Hong Kong market
- Compete with HKJC on odds, promotions, user experience
- HKJC would have to lower margins to stay competitive
Likely outcome:
- HKJC margins drop from 72% to 10-15% (still profitable, but competitive)
- Government revenue drops from HK$30.1B to ~HK$5-10B (assuming lower margins + split across operators)
- Consumers benefit (better odds, more choice)
Why this will never happen:
- HK government depends on HK$30B+ annually from HKJC
- Allowing competition would reduce government revenue by 70-80%
- No politician wants to explain a HK$20B budget hole
So the monopoly is permanent. Government won't allow competition because competition would reduce government revenue.
The Future: What Happens When Government Depends on Gambling
The HKJC model has been stable for decades. But it creates long-term risks:
1. Demographic Shifts
Hong Kong's population is aging. Younger generations gamble less than older generations (documented globally). If gambling participation declines, HKJC revenue declines, government revenue declines.
2. Mainland China Competition
Macau (just across the border) offers casino gambling. Some Hong Kong residents travel to Macau to gamble. If Macau expands sports betting or online gambling, it could compete with HKJC.
3. Illegal Online Gambling
Offshore gambling sites offer better odds than HKJC. Tech-savvy gamblers use VPNs to access them. If this grows, HKJC's monopoly erodes (even if illegal).
But none of these threats have materialized significantly yet. HKJC turnover keeps growing (HK$320.3B in FY2024/25, up from HK$304B in FY2023/24).
As long as turnover grows, government revenue grows. And as long as government revenue grows, the monopoly stays protected.
The dependency is the trap. Government can't give up HK$30B. So the monopoly continues indefinitely.
What Post 3 Reveals
The Hong Kong Jockey Club is the world's most profitable "non-profit."
It generates HK$320 billion in turnover annually, operates with 72% EBITDA margins (higher than Apple or Microsoft), pays HK$30 billion to government, and hides behind a "charity" label.
It's not charity. It's a government-protected monopoly designed to extract maximum revenue while providing political cover through "charitable contributions."
If Singapore Pools is government as house, HKJC is government as landlord — the "non-profit" operates the casino and pays rent (HK$30B annually) to the government that protects it from competition.
Post 4 will show what happens when gambling is completely illegal: China's $145+ billion underground market, the largest illegal gambling operation on Earth, funding syndicates and trafficking networks across Southeast Asia.
The pattern emerging: Legal or illegal, monopoly or competitive, government-owned or "charity" — the house always wins. And in Asia, the house extracts more than anywhere else on Earth.
WHAT’S CONFIRMED (Primary Sources):
• HK$320.3B turnover (FY2024/25): HKJC Annual Report FY2024/25
• HK$138.5B racing, HK$173B football: HKJC Annual Report FY2024/25
• 72% EBITDA margin: Calculated from HKJC Annual Report (HK$35.3B EBITDA / HK$49.3B revenue)
• HK$30.1B to government: HKJC Annual Report FY2024/25
• HK$9B to charities: HKJC Annual Report FY2024/25
• ~4.6% of HK government revenue: Calculated (HK$30.1B / ~HK$660B total govt revenue)
• UK bookmaker margins 5-8%: UK Gambling Commission reports
• Apple/Microsoft margins: Public company financial statements
• Executive compensation estimates: SCMP investigations, media reports
WHAT’S CALCULATED (Showing Work):
• 72% EBITDA margin: HK$35.3B / HK$49.3B = 71.6% (rounded to 72%)
• Government vs charity split: HK$30.1B / HK$39.1B total = 77% to govt, 23% to charity
• 4.6% of HK government revenue: HK$30.1B / HK$660B = 4.56%
WHAT’S INFERRED (Clearly Labeled):
• “Non-profit is fiction”: Our conclusion based on 72% margins + executive compensation
• “Monopoly enables margins”: Our analysis comparing HKJC to competitive markets
• “Government dependency creates trap”: Our assessment of structural relationship
SOURCES:
• HKJC Annual Report FY2024/25
• Hong Kong government budget documents
• South China Morning Post investigations on HKJC
• UK Gambling Commission (UK comparison data)
• Public company filings (Apple, Microsoft, Flutter, MGM for comparisons)
WHY THIS MATTERS:
HKJC is world’s most profitable “non-profit” — 72% EBITDA margins, HK$30B to
government annually. The “charity” label masks monopoly extraction. Government
depends on revenue, won’t allow competition. This is institutional extraction
disguised as philanthropy.
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