A racecourse of 2,800 square meters in area that can seat 4,000 spectators will soon be opened to host the China Speed Horse Racing Open in Wuhan this September, an event that was approved by the General Administration of Sport of China (GAS) last month.
Observers say that the go-ahead for the event is the latest indication that the government may relax restrictions on horse race betting, although the administration reiterated that the practice remains illegal in China.
The government of the port city of Tianjin received $4 billion from Dubai investors to build a racecourse in 2010, according to The Daily Telegraph, while completed racecourses can already be seen in first-tier cities such as Beijing and Shanghai.
"The booming development of horse racing shows that both spectators and organizers are expecting the government to legalize horse race betting soon," Wang Xuehong, director of the China Center for Lottery Studies at Peking University, said to the Global Times.
According to Wang, the Chinese mainland loses some 1 trillion yuan ($154 million) in revenues annually due to the ban, much of which could have been spent on public welfare projects.
Ongoing rumors
Wuhan, hailed as the capital of horse racing, had its first track built in the early 1900s. The city then saw a surge in horse racing until it was banned after the founding of the People’s Republic of China in 1949.
Though commercial horse racing reappeared in Wuhan in 2003 following the establishment of Orient Lucky City, a horse racing club, betting on the sport was never legalized.
However, rumors about the legalization have never stopped.
In 2005, chief Wang Weidong and other officials from the Sports Betting Management Center of GAS went on a four-day visit to the Hong Kong Jockey Club, prompting speculation that the government might allow horse racing betting on the mainland, the Hong Kong-based Ta Kung Pao reported.
In another sign, the Horse Raceing Betting Research Institute, which specializes in policy and legal research into horse race betting, was founded in Wuhan in 2008.
"Our research results show that China can completely legalize horse race betting," said Qin Zunwen, director of the institute, to the Shanghai-based magazine Financial Weekly.
According to international practice, 60 percent of the total revenues from horse race betting would be returned to gamblers, 20 percent would be used as public welfare funds, and the remaining 20 percent would be ploughed into administration costs for horse race betting.
Qin estimated that at least 20 billion yuan in welfare funds could be made from horse race betting revenues if the activity were legalized.
High stakes
Despite the government ban, many racecourses still manage to get around the policy.
The Beijing Jockey Club, the largest racecourse in Asia, was suddenly shut down by the local public security bureau for allegedly allowing gambling in 2005. It had to euthanize hundreds of its horses and dismiss 700 personnel to meet operational costs, according to a Beijing-based weekly magazine Beijing Sci-Tech Report.
For the upcoming China Speed Horse Racing Open in Wuhan, the organizers had originally planned to allow mock betting without using money, but that was later called off by the government, according to the Wuhan-based newspaper Investment Times.
"Horse race betting is likely to cause problems of instability, so the government has always imposed a strict ban," reads a commentary in the Beijing-based newspaper The Economic Observer.
"Horse racing in China is totally different than in foreign countries. We only promote it as a competitive sport," said Chen Qing, the secretary general of the Chinese Equestrian Association.
In the early 1990s, horse race betting was allowed in Guangzhou, which copied the experience of Hong Kong. More than 100 betting stalls and 10,000 gamblers took part in the event, with total wagers of around 10,000 yuan being made every racing day. However, the activity was ordered to halt after cheating was found to have occurred in the Jockey Club, according to Wuhan-based newspaper Investment Times.
"The conditions for legalizing horse race betting are not advanced enough, and the government is still in a research phase. It needs cooperation from different official bureaus such as the Ministry of Finance and the GAS," said Wang.
"Without a complete plan, the legalization of betting is still a far-fetched notion," Wang added.