On 28thDecember, Chinese government officially released the “Implementation Plan for the Construction of an International Tourism Consumption Center in Hainan Province”. In this implementation plan, it clearly defines the comprehensive development of the sports and tourism industry in Hainan province, including establishing horse racing and sports lotteries. The news stimulated the stocks market to rise with 8% growth for Luo Niushan (000735), 6.5% for HNA Innovation (600555), and nearly 6% for Hainan Ruize (002596) ) and Yuda shares (002865) separately.
The horse racing lottery has a complete industrial chain, which can produce a series of derivative industries to stimulate economic development. The development space, and the development of horse racing activities will also drive the development of many related industries such as transportation, advertising media, hotels, restaurants, telecommunications, and tourism. Since the gambling-style horse racing has been banned in mainland China, there are legal obstacles to the horse racing. The Chinese horse racing lottery industry is mainly in Hong Kong and Macau.
China’s horse racing development has undergone several historical changes. At the end of 1992, a prize-winning competition was launched in a race in Wenjiang, Chengdu, Sichuan. This was the first commercial horse racing in the mainland, but it was officially suspended only for a few months. In the early 1990s, Guangzhou was once allowed to try horse racing lottery according to the Hong Kong model. At that time, the total betting volume was as high as 10 million Chinese dollars, with more than 100 betting branches in Guangzhou. However, it was suspected of cheating and was called to stop urgently. In 2005, Beijing Shuntong Racecourse was also suspended for allegedly operating gambling.
In November 2008, the China Speed Horse Racing Test was held in Wuhan with a prize of 120,000 yuan. The event replicated the Hong Kong model and was endowed by the industry as “the first commercial sense of horse racing in China since 1949 and was once regarded as a landmark event in China’s horse racing lottery. This event starts the era of horse racing in China.
The Hong Kong Jockey Club also start their footprint in Mainland China, with the construction of the Conghua Training Centre, which serves as houses for race horses that are retired. This project is viewed as the new jewel in Hong Kong Jockey Club’s crown. As of now, a total of 35 horses are located at the training center. With this move of the horses over, it helps provide Conghua Training Centre with an additional boost, making it one step closer to becoming fully operational with the first set of racehorses in training in July 2018.
With the recent announcement of establishing horse racing industry in Hainan, this project has gain lots of attention globally and it is estimated that the size of China’s horse racing lottery market will reach 47.97 billion yuan in 2020.
“China has a history of 5,000 years of horse breeding and is an important source of horse culture in the world and the second largest horse raising country. China’s horse industry is in rapid development. With the support from government, this will effectively expedite the fundamental transformation of the Chinese horse industry.” Said Eric Lau, Committee Member of RacingLand, who currently serves as the member of the Committee of the Chinese People’s Political Consultative Conference, arbitrator of Arbitration Commission and founder committee member & Financial Controller of Hong Kong Chamber of Commerce in China, Harbin Office.