It will create irreversible damages to Hong Kong by destroying the Club's longstanding successful business model, Hong Kong's world status as a leading racing jurisdiction, resulting in a jeopardy of the public interest of Hong Kong.

NPP's proposed football betting duty increase will theoretically raise the Club's taxation to the government from the current HK$25 billion to more than HK$31 billion. Subsequently, the operating revenue from wagering before operating cost will theoretically reduce by HK$6 billion from HK$15 billion to HK$9 billion. This is a drastic reduction by 40%. It will result in a zero surplus at best or more likely a negative one, disabling the Club from making necessary investments to secure its future and contributing to the community. In reality however, consumer behaviour can be highly dynamical. Any perturbation such as a tax increase, or simply the perception of such, could easily result in disproportionate responses even if it is not immediately passed on to consumers directly. The change in demand triggered by a perceived price change in the wagering business is substantial.

The Club is the only licensed betting operator in Hong Kong but not the only operator. It is facing fierce competition in an uneven playing field from Macau as well as illegal and offshore bookmakers across the globe. This is because Hong Kong has the highest betting duty rates in the world, ahead of other operators by 15% to 65 %. In addition, under no regulatory restrictions, illegal and offshore bookmakers provide better odds, a wide range of betting products such as basketball, Formula One, golf and tennis etc., and credit line. This makes the Club increasingly difficult to compete. Any increase in football betting duty will take away our competitiveness and drive more Hong Kong people to bet with illegal and offshore bookmakers. Under these circumstances, government will only receive less but not more tax and duties.

To compete with illegal and offshore bookmakers for the purpose of keeping Hong Kong's wagering money in the legal channel, the Club has invested HK$5 billion in state-of-the-art IT system lately. Over the next five years, the Club will invest a further HK$7 billion in IT systems, application and infrastructure, as well as HK$15 billion in racecourse stables and customer facilities in Hong Kong and the Greater Bay Area. Any increase of football betting duty will harm our ability to invest for a sustainable business. In addition, football betting duty increase will also affect racing. Given the existing high take-out rate due to the heavy tax burden shouldered by the Club, it cannot pass the duty increment to its customers in order to increase its surplus. As such, the Club will not be able to invest in world class racing products via increase of prize money, racecourse customer facilities, IT technology etc. for the upholding of Hong Kong's world class racing as an international brand.

Regarding the Charities Trust, it has been responsibly deploying a sound financial investment strategy to manage the donation received from the Club every year for the betterment of society. During the period of 2011/12 and 2021/22, the donation of the Trust has increased from HK$1.7 billon to HK$6.6 billion, representing a 288% increase. During the same period, the net margin of the Club has only increased by 96% from $7.6 billion in 2011/12 to HK$14.9 billion in 2021/22.  In line with our refreshed strategy since the start of the current season, the Trust has begun deliberately and significantly reducing the current reserves level, in order to fulfil our strengthened commitment to bettering society. Multibillion dollar commitments like Tai Kwun's ongoing revitalisation remains a work in progress, while the Trust continues looking to support other mega projects like the Hong Kong Palace Museum which was funded outside our regular donation stream at HK$3.5 billion.

Besides financial support, grantees have particularly commented that they very much value and appreciate the Trust's emphasis on capacity building as well as its subject expertise and convening capabilities. On the other hand, the Club has established a deeply shared sense of reciprocal trust with the welfare, education, health, culture and sports sectors over the past few decades due to a healthy annual allocation from the Club's operating surplus, which has enabled the Trust to make substantial donations and build philanthropic know-how.

Unlike most other philanthropic organisations around the world, the Trust does not have a sizeable reserve or endowment from which the majority of our donations is derived. Our reserves, while significant, would not support nearly the level of donations we have managed were the Club's annual operating surplus to be substantially reduced, for example by an increase in betting duties that are already uncompetitive. The Trust's continuing ability to better society is entirely dependent on the future business environment that has significant uncertainties, from intensifying competition to economic headwinds to inflationary pressures. Against this background, any increase in betting duty will affect our donation to the NGOs, our role to fill the gaps in charities and services, support the underprivileged, as well as donation to the construction of important facilities for the city such as the Hong Kong Palace Museum, CUHK Medical Centre, campus of the HKUST.