Hong Kong racing’s wagering strategy was a core point in the opening plenary session on day two of the Asian Racing Conference (ARC) in Seoul, South Korea today, Wednesday, 16 May, 2018.
Mr. Winfried Engelbrecht-Bresges, the Hong Kong Jockey Club’s Chief Executive Officer and Chairman of the Asian Racing Federation (ARF), chaired the session, titled ‘Global Wagering Leaders – Current strategies and opportunities’ and kicked off proceedings with a call to all racing jurisdictions to take advantage of a brightening global economic outlook.
“While we have talked about our branding being less focused on gambling, which is important, we cannot escape the fact that wagering is the lifeblood of the racing industry and we have to capitalise on the positive economic climate. There is a strong link between strong GDP and betting turnover growth, if the two are decoupled there is a structure problem,” he said, as he recapped the growth in horse race betting turnover in the past decade and outlined expected growth going forward.
He also noted that racing faces competition for its share of the global gaming market – which receded from seven percent in 2010 to six percent in 2016 – but observed that one positive from the Club’s football betting operation is that some new customers do migrate to bet on horse racing, too.
Mr. Engelbrecht-Bresges delivered five key points which he believes are important for the global industry: Widen the customer base, embracing new technologies and providing relevant offerings; develop better tote technology for a better customer experience; advance development of a new tote betting protocol for commingling to leverage our strength in exotic bet types; create and protect our IP rights nationally and internationally; support the fight against illegal and unregulated betting.
Later in the session, Mr. Richard Cheung, the Hong Kong Jockey Club’s Executive Director, Customer and International Business Development, presented to the convocation that the Club is now focused on three key areas for enabling further growth in turnover and customer engagement over the next five years: Micro-mining demographics; commingling; and leveraging new technologies to innovate for the next generation of racegoer.
After recapping Hong Kong racing’s successful revitalisation of turnover and racegoer participation in recent years – a strategy rooted in customer segmentation and smart investment in the customer experience – Mr. Cheung said: “We have had a good run, last year turnover grew by 10 percent and this year we expect another five or six percent growth, but we do not think we can sit on our laurels. We are now planting the seeds for another good run.”
He shared that Hong Kong demographics are such that the city has an ageing population. The Club has focused on a “seniors” strategy, providing age-friendly facilities, bigger font types in targeted racing publications, nostalgic marketing campaigns and has even provided help for seniors to go digital.
“Those racing fans who lapsed, who dropped away from the sport due to work and family commitments in middle age, with our tactics, we are seeing that some are returning now that they are retired. Not only that, the lapse rate is dropping,” he said.
Micro-mining the demographics also led to success in attracting more female racegoers. The Club has developed the “Go Racing” brand targeted at young women. Investment has created a female-friendly racecourse experience, which even includes catering tailored to female customers.
He also noted that engagement must be maintained outside of race days. Social, digital media, he said, must be utilised for an all-round connection. To better achieve this, the Hong Kong Jockey Club is also using KOL (Key Opinion Leaders) marketing, leveraging not only racing experts on social media but also “customer ring leaders” and female celebrities and racing commentators who provide social interest for casual racegoers.
“We have seen success with an increase in active betting accounts among young women, with a seven percent growth two years ago and this year a 16 percent growth,”
With regard to commingling, he noted the Club is investing in providing rich, tailor-made digital content that engages overseas customers and connects them with the Hong Kong scene in order to grow the market. The Club is also working with commingling partners to explore the development of bet types familiar to overseas markets but not offered in Hong Kong.
“Our commingling business started in 2014 and by the end 2015/16 we were at about US$400 million in turnover. For this season we’re looking at about US$2 billion and that will continue to grow,” he said.
New generation technology is also vital to future development. He said that emerging technologies such as touch-and-go e-payment, artificial intelligence and chatbots might not result in people betting more but “We still need to do it. This is how future consumers, especially Generation Z, will function; we have to continue to adapt or it will be very difficult for us to stay relevant with the next generation of customers.”
Also speaking at the session was Mr. Masayuki Goto, President and Chief Executive Officer of the Japan Racing Association (JRA), who outlined the expansion of racing’s international footprint and the importance of international simulcasts. Japan has engaged in a commingling partnership with the Hong Kong Jockey Club and Mr. Goto said that the JRA’s international simulcasts have helped to expand the sport’s fanbase.