Tweak Out The Bugs!

by Ed Meyer

posted on January 1, 2009 in General Discussion, News | 2 Comments >>

Opportunities are sparse for China’s small-time speculators. So it was with a certain ebullience, that 7,000 residents of Wuhan recently gathered at the Orient Lucky City racecourse to indulge in what the central leadership terms a “social evil”. They were the first people in mainland China to be given official approval to win money from horse races since the Communist Party outlawed gambling in 1949.

To the disappointment of hardened punters, depravity was lacking. No gambling, as such, was allowed. Racegoers could pick a horse for nothing in two of the five races and, if it won, were awarded 20 lottery scratch cards, giving them the chance to win 30,000 yuan ($4,400). One lucky winner scooped 4,000 yuan; most won less than a taxi fare home. The big hitters who had flown in from Sichuan could be heard cursing the impotence of their bulging wallets.

Tentative as it was, the race meeting in November was a significant move towards opening the country’s vast betting market.  In the same month, the World Poker Tour introduced Chinese poker, or Tuo La Ji, to television viewers. As the economy falters, the incentives for the government to trade ideology for profit are compelling. A Chinese researcher has claimed that a nationwide betting industry for horse racing would create 3 million jobs and 40 billion yuan in tax revenues. The government might also rescue some of the estimated $700 billion lost to illegal betting each year.

But the Communist Party’s conservative factions will need persuading. They regard horse race betting as immoral for the masses, a challenge to social stability and a throwback to colonialism (British merchants plying the Yangzi River set up racing in Wuhan in the early 1900s).

Wuhan’s new racing crowd has been converted. One spectator, a teacher-turned-entrepreneur, trotted out a bit of wisdom from Deng Xiaoping to dismiss the morality debate: “No matter if it is a white cat or a black cat; as long as it can catch mice, it is a good cat.” Others enthusiastically followed the advice of the course commentator who compared picking a winning horse to finding a pretty woman (“Look for a big chest and slim waist”).

The racecourse operator, Orient Lucky Horse Group, owned by Jacky Wu, a Hong Kong businessman, enjoys rare central-government backing (the vice-minister of sports opened the meeting), but is terrified by government fickleness. With a stud farm and a training facility under construction, Mr. Wu has a lot to lose (as do the 93 students who are studying for a degree in horse racing at a local university). The group has seen racing operations shut down in the past as unauthorized betting went too far, notably in Beijing in 2005. Caution is now its prime policy.