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When will the horses run? (2)


09:41, August 08, 2011

Scholars and experts are still arguing the pros and cons of allowing betting on the racetracks. While some say it will stimulate urban economies and encourage rural horse farms, others say the mainland is not ready, and the social cost may be too high a price to pay. (Photos provided to China Daily)

Yang Fangpeng of Wuhan, a 33-year old engineer, was also at the races with his friends. They were there only because admission was free and there would be raffles between races, he said. And he's totally against betting.

"Horse racing should remain a weekend entertainment, but not for gambling," he says. "Besides, many people in Wuhan are already big fans of gambling. They play mahjong and poker."

Yang says he hears enough stories in the villages about migrant workers who come home during Spring Festival and lose their entire wages playing poker with friends and strangers.

From 2001 to 2008, the central government had cracked down on extensive illegal betting on Hong Kong's Mark Six lottery and horse races prevalent in neighboring Guangdong, and which then spread like wild fire to Central China's Hubei and Hunan provinces.

But there are other attractive facets to the racetrack that are recognized and already well established among the rich and famous in countries where horseracing is a recognized and elite event on the social calendar.

It was these impressions that attracted Xu Jin, 33, a public relations manager. He was considering becoming a horse owner by paying the 380,000 yuan ($58,976) membership fee to the racetrack. For him, there is the element of prestige, and the advantage of networking with other business leaders. Of course, the prize money, an incentive for owners whose horses win the race, is also an attraction.

"It's like joining the golf club. It's a status symbol and a business investment," he says. But now, it all depends on whether the racetracks can adopt the traditional international standards.

"If betting is not allowed, the races won't be held regularly and I don't think there would be many who would be willing to buy a horse just for the fun of it."

Xu thinks that if horse racing loses its gambling element, it's going to be difficult to start and keep the passion for racing alive.

Local government and scholars are keen to have the horses running to push the local economy forward with the prospect of more tourists coming to the tracks. In addition, they argue that legalizing gambling may be one solution to prevalent illegal gambling underground.

According to statistics from the China Center for Lottery Studies at Peking University, China loses about 600 billion yuan each year to other countries through illegal betting, especially with the popularity of online gambling sites.

"Our research shows that China is completely capable of legalizing race-track betting," said Qin Zunwen, director of the Horse Racing Betting Research Institute in Wuhan and vice-president of Hubei Academy of Social Science, according to an interview he gave the Shanghai-based publication Dongfang Daily in 2008.

Qin told the publication that legalizing horse racing could create at least 5.6 million jobs for China, help increase government revenue and boost public welfare by paying 15 percent of its revenue as tax.

It can also develop another rural industry - horse breeding. According to Qin, the number of horses in China had decreased in recent years, dropping from 11.4 million to 7 million. Currently, horses are used mainly for tourism, the film industry and equestrian sports.

In comparison, the United States with its thriving horse breeding industry, currently boasts about 8 million steeds.

"One American thoroughbred could sell for hundreds of thousands of dollars or even millions, while in China, a horse could be as cheap as 1,200 yuan ($185). If the Chinese farmer can sell one thoroughbred, he does not need to worry about money for the rest of his life," Qin had told Dongfang Daily.

But when China Daily contacted him this time, Qin declined our request for an interview.

"I've not been following the recent developments," he said. "At present, it's best to talk to the local sports administrations about the event. They can offer official responses to your questions."

Wu Gangfang, commissioner of public promotion for the Chinese Equestrian Association, is more forthright.

Wu thinks China is not ready for horse betting because it does not have the legal framework for it, and it lacks a system to ensure the transparency of the betting operations or tests to prevent drug use or other forms of cheating.

"People cheat even at table tennis, which is played right in front of you. How can we prevent cheating in horse racing where there is an animal involved?"

Wu believed that even if there is going to be a race lottery eventually, the onus is on the local governments to hold such sweepstakes and for the central government to impose the regulations.

As for developing a breeding industry, Wu pointed out that the opening up of legalized horse races would only bring in more imported race horses, which can run much faster than Chinese-bred horses, but cannot breed because they are mostly gelded.

Qin Zunwen's Horse Racing Betting Research Institute in Wuhan was founded in 2008, and its establishment was regarded as another sign that the country was preparing to legalize horse betting. But again, the tide seems to have changed.

Local government agencies and other advocates who had been lobbying for the cause are now reluctant to answer questions.

The Hubei Administration of Sport and Wuhan Sports Bureau did not respond to our questions. Another advocate of legalized horse racing, Qin Yingwei, the secretary-general of Wuhan Committee of Chinese Democratic League, the first person in Wuhan to put forward the idea, has also declined to be interviewed.

The future of horse-racing as a gambling sport in China is still uncertain.

Although cities like Beijing and Guangzhou have flirted with the idea, they all failed to turn the dirt tracks into yellow-brick roads after the central government pulled in the reins.

Sometimes, the punishment can be harsh for punters determined to run the course. In 2000, Huang Qihuan, chief executive of the Guangzhou racetrack, was sentenced to 19 years in prison on corruption and embezzlement charges.

In Beijing, the expensive Tongshun Jockey Club, which had cost over 300 million yuan to build, opened in 2001, but was left out in the cold after the Beijing Municipal Public Security Bureau shut down its betting activities in 2005.

The owners destroyed hundreds of thoroughbreds imported from Australia after racing was discontinued, according to the Beijing Times.

But in spite of all these false starts, the huge potential profit motive still keeps hopes alive. Investors are still waiting for the races to start, but as Wu Gangfang warns, China will still have to get the formula right.

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