As Hong Kong's government gathers public feedback on the proposed regulation of basketball betting, one crucial question emerges: How can we ensure that betting operators adequately contribute to mitigating the social harm they may cause? The consultation, which runs until May 2, 2025, presents a rare opportunity to modernize our approach to gambling regulation and align it with global sustainability practice and ESG standards.

The gambling industry, with its inherent social risks, faces particularly strict expectations. Modern corporate sustainability frameworks recognize that businesses and corporates must account for their negative externalities and contribute proportionally and accordingly to mitigating harm. For a unique entity like the Hong Kong Jockey Club (HKJC), which enjoys a government-sanctioned monopoly on all legal betting activities, this responsibility is even stronger.

A Concrete Move: Mandatory Financial Contributions

The public expects the legalization of basketball betting to generate approximately HK$3 billion direct income for the HKJC. To address the potential societal harm, government and lawmakers should consider implementing statutory requirements for the HKJC to contribute significantly to harm reduction and public welfare initiatives.

Potentially, legislation could mandate that at least 3% of total basketball betting income—or no less than HK$300 million—be allocated to the Ping Wo Fund for anti-gambling and problem gambling prevention. An additional 2% of income (minimum HK$200 million) should fund other government-led education and addiction prevention programs.

Notably and critically, these contributions must be distinguished from the HKJC's existing charitable practices and donations, ensuring they represent a new, supplementary commitment specifically targeting gambling-related harm.

Legal Precedents: UK and US Leading the Way

In fact, the global shift toward mandatory financial contributions from gambling operators finds strong justification in legislative developments across two major common law jurisdictions. Both the United Kingdom and New York State have implemented statutory frameworks that compel operators to fund harm reduction initiatives—models that Hong Kong can adapt to strengthen its own regulatory regime.

United Kingdom: From Voluntary Gaps to Statutory Equity

The UK’s Gambling Act 2005 initially relied on voluntary contributions from operators to fund research, prevention, and treatment (RPT) of gambling harms. The voluntary approach led to inconsistence of funding amount, causing chronic underfunding of gambling hard-reduction critical services and raised concerns about industry influence over RPT priorities, according to the UK’s government Gambling Act review white paper in 2023.

To address such situation, in April 2025, the UK introduced the Gambling Levy Regulations 2025, a landmark reform mandating contributions from all licensed gambling and betting operators. The levy is calculated as a percentage of Gross Gambling Yield—the total amount wagered minus prizes paid out—with rates tiered by sector.

This structure ensures proportionality: high-risk sectors like online gambling bear greater responsibility, while smaller venues contribute at lower rates. The levy is projected to raise £100 million annually (with around HKD 1 billion), with 50% earmarked for NHS-led treatment programs. The Gambling Commission will act as the authority to enforce new regulation and compliance through licence revocation for non-payment, embedding accountability into the regulatory framework.

New York State: Legislative Precision in Harm Mitigation

New York’s approach basically combines aggressive taxation with explicit allocations for public health in gambling harm reduction. Under N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 1367(8), mobile sports betting operators pay a 51% tax on revenue, of which 1% (minimum $6 million annually) must fund problem gambling education and treatment. This provision creates a self-sustaining mechanism where gambling revenue directly addresses its societal costs.

Implications for Hong Kong Context:

Back to Hong Kong case, both jurisdictions demonstrate key principles Hong Kong can adopt to shape its basketball betting regulations. The UK’s tiered levy system—charging online operators 1.1% of revenue versus 0.5% for land-based venues—reflects the higher risks of digital gambling, a model Hong Kong could adapt by imposing a 3% levy on basketball betting given its appeal to youth. New York’s approach of statutory obligation mandating a $6 million annual minimum for harm reduction after the first year of operation, regardless of market performance, finds resonance in Hong Kong’s proposed HK$300 million floor for the Ping Wo Fund, ensuring stable funding even during economic downturns.

Independent oversight is also the top-priority in both jurisdictions. The UK directs 50% of levies through the NHS, while New York allocates funds via state agencies—a practice Hong Kong should replicate by channelling contributions to government-administered programs rather than the HKJC’s its own charitable arms, preventing a profound direct conflict of interest.

As basketball betting inevitably broadens gambling participation among Hong Kong residents including vulnerable young adults, it is imperative that sufficient resources are allocated to education, prevention, and treatment programs. Instituting a statutory financial contribution requirement would embed social responsibility into our betting industry and reinforce both HKJC and Hong Kong’s reputation for progressive governance. This regulatory approach should not be confined to basketball betting alone; rather, it could be applied comprehensively to all future new betting activities, ensuring that social sustainability are being upheld in our city.

By Leonard Luk

Co-program Director (ESG & Legal) of the Asia Pacific Focus, Institute for Greater China Studies (APAC Focus IGCS)

Hong Kong solicitor with experience working in Hong Kong, PRC and US law firms. Each of these positions has contributed to his comprehensive knowledge and proficiency in handling complex legal matters related to capital markets ESG and regulation compliance.

Bryan Luk

Program Director of the Asia Pacific Focus, Institute for Greater China Studies (APAC Focus IGCS)

A research practitioner and an ex-Legislative Councillor office senior researcher who dedicate to advancing regional sustainability, human security, and peacebuilding through research, civic advocacy and intellectual engagement. Currently also serving as one of the Executive Committee Member of the HKU Graduates Association (HKUGA).

Paul Lee

Co-Program Director (Outreach & Engagement) of the Asia Pacific Focus, Institute for Greater China Studies (APAC Focus IGCS)

A strategic advisor to notable firms, including Sotheby, Deacons, OYM Associates etc. Also a Part-time Lecturer at the HKU SPACE.

The views do not necessarily reflect those of Orange News.

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