The horse racing season just opened on Sunday. Horse racing is one of Hong Kong's most popular pastimes. In the last racing season, it was responsible for a turnover of HK$71.65 billion ($9.22 billion), up nearly 6 percent from a year earlier.

On February 14 this year, Singapore opened its first casino. Then it opened its second casino on April 27. This second casino is the world's second most expensive casino after MGM Mirage's CityCenter in Las Vegas. The new Singapore venue expects to generate as much $1 billion in annual profits.

There is little doubt that these casinos probably played a part in Singapore's remarkable growth in the second quarter of this year. Compared to the same period last year, real GDP was estimated to have grown 19.3 percent. Over the quarter, the rate of growth was 26 percent (at annual rate). This is according to the Ministry of Trade and Industry of Singapore. For the year as a whole, the expectation is that economic growth will hit in the range between 13 and 15 percent.

In contrast, Hong Kong's growth is projected as much lower, perhaps 5.5 to 6 percent for the year. Still, the government has so far refused to introduce casinos, notwithstanding a plea from the business sector. While soccer gambling was permitted in Hong Kong beginning in 2003, betting on local matches is not permitted. Moreover, the gambling business is monopolized by the Hong Kong Jockey Club, which essentially devotes all of its earnings to charity. In 2009/10, the Jockey Club Charities Trust donated a record HK$1.52 billion to some 107 charities and community projects. Gaming in Hong Kong is directed to a more noble purpose, and is ostensibly not included in the six new industries proposed by the Chief Executive.

One of the objections against introducing the casino business in Hong Kong is the worry that gamblers may lose self-control and gamble excessively, becoming addictive gamblers. Not so long ago, it was reported that a Singapore gambler lost HK$150 million in three days. He was not happy that the casino lent him large amounts, in disregard for his ability to pay. The man lost around HK$100 million in June but he needed only to fill out a form and the casino immediately granted him a large loan. His girlfriend begged the staff not to provide the loans but her pleas were simply ignored.

Pathetic gambling is indeed a potentially serious problem. Lack of self-control is a very common human weakness. From time to time tragedies related to excessive gambling happen, often involving family violence and even loss of lives. Sometimes a Hong Kong resident, who gambles in Macao, is escorted to Hong Kong by the agents of loan sharks who threaten violence should they fail to pay the huge amounts owed, with interest. After Hong Kong introduced betting on international soccer events, gambling did become more widespread among youngsters, and the government spends a lot of money trying to educate the public not to indulge in gambling.

One way out is to require that Hong Kong residents who want to gamble set up an account, with a ceiling on the total amount placed on bets and limited to a percentage of the gambler's monthly income. Whether he bets at the horse race track or in a casino his bets will be recorded, and as soon as the ceiling is reached he is simply barred from placing any more bets. One can of course think of various ways to circumvent this requirement, and efforts should be made to avoid any obvious loopholes. This will not prevent all excessive gambling, but it will help. Just as homes with anti-burglary gadgets may still be broken into, the requirement will not stop excessive gambling among those who stubbornly insist on the pathetic behaviour. But just as anti-burglary gadgets are nevertheless valuable, so is the requirement that gamblers need to have the necessary "quota" to gamble.

With the requirement in place, gamblers will at least be reminded that they have lost so much money out of their monthly income. If they are to continue to gamble in the registered gambling places, they would need to borrow other people's identities. That is relatively difficult and it constitutes an offense. If the operator of the casino helps a person to cheat, the operator commits an offense and risks having the business license suspended. The proposal can therefore help stop or at least reduce loan sharking activities.

With the requirement in place, casinos will become less harmful. Visitors can of course place bets as much as they like. But Hong Kong will protect its people from the worst side-effects of gambling. They will have no excuse that they are given loans lavishly. It will be nice if Macao and Hong Kong can work together to set up a common registration system for their residents. This will not prevent them from going online or to other countries to place bets, but will help. Moreover, the campaign against excessive gambling and for moderation will still be necessary.

The author is director of the Centre for Public Policy Studies, Lingnan University.

(HK Edition 09/07/2010 page4)