The beleaguered Korean racing industry was thrown a potential lifeline this week after local media reported that a group of fifteen lawmakers submitted a bill to the National Assembly seeking to allow the online sale of horse racing betting tickets.
The group, led by Representative Kim Seung-nam of the ruling Democratic Party, have proposed a partial amendment to the Korean Horse Racing Act which currently only permits wagers to be taken in person at a racecourse or off-track betting facility.
A spokesperson for Representative Kim said the group understood there are those who are concerned about the effects of legalizing online wagering but that “minimizing the damage to the industry while preventing the spread of the coronavirus is also needed. The bill allows for a temporary suspension of online wagering should the turnover exceed an acceptable level that is set by the government.”
Racing in Korea was suspended in February due to the COVID-19 pandemic and while it resumed in June, the races have been run behind closed doors, with neither the racecourse or off-track facilities allowed to admit customers.
Both of Korea’s international races, the Korea Cup and Korea Sprint, scheduled for September have been postponed by one year with the prolonged shutdown having caused an unprecedented near-collapse of the industry.
Some other racing jurisdictions in the region such as Japan and Hong Kong have been able to continue their operations during the pandemic largely unaffected with their customers being able to place their bets online from home. The Japan Cup will be held as planned in November, albeit with only Japan-trained horses competing. Korea remains one of the only countries in the world to still not allow online wagering.
Horse racing’s collapse would have dire consequences. Not only are the racing and breeding industries significant employers, but the Korea Racing Authority is one of the largest taxpayers in Korea and provides significant support to rural communities.
Of total wagering turnover, 73% is returned as dividends, 10% goes to general taxation, 4% to local education programs and 2% to support farming and fishing communities. Operating expenses account for 7% of turnover while profits are 4% with the majority of that contributed back to an agriculture development fund. It is estimated that by the end of August, 751.7 Billion Korean Won (US $634 Million) in tax revenue will have already been lost.
Should the bill proceed in a normal manner, it would be expected to go through the various committee stages between October and December of this year before potentially coming to a vote of the full National Assembly in early 2021. All infrastructure for the processing of online bets already exists and is ready to go as soon as legalization takes place.