The Hong Kong Jockey Club (HKJC) has released its financial results for the 2023/24 fiscal year, ending 30 June 2024, painting a complex picture of both resilience and financial challenges. The report highlights a 3.1% dip in racing turnover, a steady overall turnover, and a mixed performance across different wagering categories. Despite the turbulence, the HKJC demonstrated its ability to maintain strong community contributions and explore new avenues for growth.
Financial Overview of 2023/24: A Mixed Bag
In 2023/24, the HKJC experienced a decline in racing turnover, which fell by 3.1%, amounting to HK$136.1 billion (US$17.5 billion). Despite an increase in the number of race meetings during the year, the slight drop in revenue underscores a shifting landscape within the racing industry. However, this contraction in racing turnover was offset by growth in other betting verticals, particularly football and the Mark Six Lottery.
Football turnover saw a modest increase of 2.2%, while Mark Six Lottery turnover soared by 13.3%. This growth in non-racing segments helped the HKJC maintain overall turnover at HK$304.9 billion, almost identical to the HK$304.8 billion recorded in the previous financial year, signaling no measurable change in the overall revenue.
While the topline figure remained steady, the club’s net margin fell by 10.5%, landing at HK$14.8 billion. Additionally, local wagering turnover declined by 4.5% for the season, reflecting broader economic pressures and changing customer behaviors that influenced betting patterns.
Nevertheless, 2023/24 also marked a record year in terms of the HKJC’s contributions to the Hong Kong community, with a staggering HK$40.1 billion directed toward community initiatives, an achievement that highlights the organization’s commitment to social responsibility even in a challenging financial environment.
Racing Turnover Decline Despite Extra Meetings
The 3.1% decrease in racing turnover to HK$136.1 billion is a particularly notable aspect of the report. This decline came despite the club hosting two additional race meetings compared to the previous year, a move that typically boosts revenue. The underperformance in racing is attributed to several factors, including shifts in customer preferences, economic headwinds, and the continued impact of the COVID-19 pandemic on entertainment and leisure spending.
The decline in racing revenue represents a significant challenge for the HKJC, given that horse racing has long been its flagship product. The club’s ability to maintain a relatively stable overall turnover figure despite this dip demonstrates the strength of its diversified portfolio, with football betting and the Mark Six Lottery providing crucial offsets to the racing slump.
Football and Mark Six Lottery Performance: Offsetting Racing Losses
Football turnover, which grew by 2.2%, played a key role in stabilizing the club’s overall revenue. Football betting has grown steadily in popularity in Hong Kong, partly driven by global trends and the increasing availability of online platforms, allowing fans to engage with a wider array of international leagues and competitions. This growth reflects a global trend where football continues to dominate the sports betting landscape, providing a buffer for operators like the HKJC who are heavily reliant on traditional forms of wagering such as horse racing.
The standout performer in the 2023/24 financial year was the Mark Six Lottery, which saw a significant 13.3% rise in turnover. This increase highlights the appeal of lottery games in uncertain economic times, where players may be drawn to the prospect of high rewards from low-stakes wagers. The lottery’s strong performance is a positive indicator for the HKJC, as it provides a relatively low-risk, high-reward source of revenue that complements the more volatile income from racing and football betting.
Challenges: Economic Pressures and Changing Consumer Behavior
While the financial figures from 2023/24 reveal certain positives, they also underscore the challenges the HKJC faces in the current economic environment. CEO Winfried Engelbrecht-Bresges pointed out the club’s “enormous resilience” in dealing with the multiple crises it has encountered, from the long-lasting effects of the COVID-19 pandemic to broader macro-economic conditions that have created uncertainty for businesses and consumers alike.
One of the most significant challenges the HKJC contended with during the financial year was the shift in customer behavior. Engelbrecht-Bresges noted that customers are increasingly seeking new experiences, often online or in outbound destinations, as part of a broader digital transformation within the leisure and entertainment sectors. This shift has led to a decline in traditional wagering, particularly in horse racing, as customers explore alternative forms of entertainment that offer greater convenience or novelty.
Net Margin and Wagering Turnover: Signs of Strain
The club’s net margin fell by 10.5% in 2023/24, reflecting the strain on profitability caused by lower wagering activity and the challenges in maintaining operating efficiency in a tough economic climate. Additionally, local wagering turnover fell by 4.5%, signaling that domestic bettors are tightening their belts or turning to alternative forms of entertainment and wagering.
These figures suggest that while the HKJC’s diverse portfolio has allowed it to maintain overall turnover, profitability remains a concern. The decline in local wagering turnover is particularly important, as it suggests that the club’s core customer base in Hong Kong is becoming more selective in their betting habits or shifting their attention to alternative markets.
HKJC’s Community Contribution: A Record-Breaking Year
Despite the challenges faced in 2023/24, the HKJC has continued to make significant contributions to the Hong Kong community. The club set a new record with HK$40.1 billion in contributions, underscoring its ongoing commitment to social responsibility and community welfare. These funds were directed toward a wide range of initiatives, from healthcare and education to sports development and cultural preservation.
The club’s community contributions serve as a reminder of its dual role as both a commercial enterprise and a charitable organization. This balance between profitability and social responsibility is a core part of the HKJC’s mission, and the record-breaking contribution in 2023/24 highlights its ability to deliver on both fronts even in difficult financial circumstances.
Looking Ahead: Strategic Shifts and the “ChatGPT Version of Horseracing”
As the HKJC moves forward into the new financial year, it is clear that the club is already taking steps to adapt to the changing landscape. One of the most significant developments on the horizon is the club’s announcement of a new initiative dubbed the “ChatGPT version of horseracing,” which aims to leverage data-driven insights to enhance customer retention and engagement.
This new initiative reflects a broader trend within the gaming and entertainment industry, where artificial intelligence and data analytics are being increasingly used to personalize customer experiences and optimize operational efficiency. By embracing these technologies, the HKJC is positioning itself at the forefront of innovation within the wagering industry, seeking to attract a new generation of customers while retaining its traditional base.
Engelbrecht-Bresges expressed optimism about the future, noting that the club’s ability to navigate the challenges of the past year demonstrates its resilience and adaptability. The “ChatGPT version of horseracing” is just one example of how the HKJC is seeking to reinvent itself in response to changing market conditions and consumer preferences.
The Hong Kong Jockey Club’s 2023/24 financial results tell a story of resilience in the face of adversity. While the club faced significant challenges, including a decline in racing turnover and local wagering activity, it managed to maintain overall turnover and deliver record contributions to the community.
Looking ahead, the HKJC’s focus on innovation, particularly through its data-driven approach to customer engagement, suggests that the club is well-positioned to weather the ongoing economic uncertainties and emerge stronger in the future. As the club continues to adapt to changing consumer behaviors and explore new technologies, it will be interesting to see how it balances its traditional roots in horse racing with its ambitions for growth in other areas.
The 2023/24 results may not have been without their challenges, but they underscore the HKJC’s enduring ability to deliver value to both its customers and the wider Hong Kong community, even in the most testing of times.