Basketball betting U-turn shows Hong Kong still can’t grasp Beijing’s mind

HONG KONG – The policy should have pleased Beijing – or so officials in Hong Kong might have hoped.

But now, it is dead in the water, becoming the Hong Kong government’s latest embarrassing U-turn after a seat-belt policy reversal barely three months ago, and inviting fresh public criticism over its decisions.

The government on April 14 abruptly halted plans to launch basketball betting, months after the legislature had passed a Bill to legalise it, and a year after the idea was set into motion.

The authorities cited the rise of prediction markets – platforms for trading on future events – for the suspension of the plan to legally launch basketball betting in Hong Kong. But insiders cited by local media suggest Beijing’s hand in it.

The plan was to have helped the Hong Kong government shore up its finances and combat illegal gambling simultaneously.

It was a fairly novel move, first officially mooted by Financial Secretary Paul Chan in his 2025 Budget speech as the city struggled to find ways to narrow its sustained fiscal deficit that came up to HK$67 billion (S$11 billion) that year.

At the time, Hong Kong had recorded deficits in all but one year since 2019 and was expecting to stay in the red until 2028.

Illicit basketball betting, meanwhile, is a massive black market in the city, turning over up to HK$90 billion in 2024, with 430,000 locals having wagered in the sport.

Launching legal basketball betting would generate up to HK$2 billion in annual tax revenue for the government, the finance chief estimated.

The idea seemed like Mr Chan’s bid to heed Beijing’s repeated calls for Hong Kong’s leaders to adopt a “new mindset” of “proactive, innovative thinking” to improve the city’s economy.

Alas, his efforts may all be for naught as the policy now appears doomed.

Secretary for Home and Youth Affairs Alice Mak was left carrying the can, fronting the official explanation for the sudden halt of the plan that was to be launched in September.

“As a responsible government, we must make decisive decisions when protecting the public interest,” Ms Mak said on April 14. “There is no need for excessive speculation.”

Her bureau said that allowing legal basketball betting now could inadvertently encourage participation in prediction markets which are rising rapidly in global popularity.

These markets, often on cryptocurrency-based platforms accessible via websites or apps, let people gamble on the predicted outcomes of virtually anything, such as whether the United States will invade Greenland or if Hong Kong will release jailed activist Jimmy Lai by June.

Sports betting in such markets is illegal in Hong Kong, the statement said.

In Hong Kong, the legality of prediction markets as a whole remains unclear. The Hong Kong Jockey Club (HKJC) is the city’s sole legal betting operator.

“Given these latest developments, it is necessary to conduct a more in-depth study into the operations of these emerging models and platforms,” the statement read.

Ms Mak added that while the Bill passed in September 2025 to legalise basketball betting was meant to curb illicit gambling, it did not mean the government must immediately issue a licence to launch the new betting option. She gave no timeframe for sorting out the issue.

Lawmakers and the leadership of HKJC – which was to have managed the legal basketball betting operation – were surprised by the plan’s suspension and unconvinced by Ms Mak’s explanation.

HKJC’s CEO disclosed internally that it was the government’s “unilateral decision” to halt the plan, Ming Pao reported. The club had already invested hundreds of millions of dollars into securing the betting infrastructure and manpower, a source said.

A member of the government’s betting watchdog, the Betting and Lotteries Commission, revealed that it had approved the initial plan only after having considered the risks posed by prediction markets, the South China Morning Post reported.

Both media outlets cited several sources as suggesting that Beijing may have been involved in effecting the policy U-turn.

Given Beijing’s ongoing clampdown on Macau’s gambling industry, Hong Kong is expected to steer clear of expanding any such related operations as well, one lawmaker said.

Others opined that Beijing could be concerned that the plan would create another legal channel for capital flight or money laundering from mainland China and a new avenue for vice.

China has been cracking down on the casino hub of Macau, curbing illicit fund flows and lowering the city’s reliance on high-rollers – many from the mainland – who once made up half its gaming revenues.

Current affairs commentator Simon Lee explained that syndicates running illegal gambling rings in Hong Kong could simultaneously hedge their bets via the emerging technology of prediction market platforms abroad, thus easily laundering their illicit funds from the city into legitimate investment profits.

Launching legal basketball betting in Hong Kong could attract more people to participate – both in the lawful and illicit spheres – hence fuelling further growth of the black market for gambling and its capacity for potential money laundering.

“This isn’t just a matter of collecting a few hundred million more in taxes; it’s about creating an irreparable loophole in the national financial security system,” Mr Lee wrote in his regular Chinese-language column online.

“Was there no cross-departmental consultation beforehand? One possibility is internal factionalism: The financial side could have been overly eager to generate revenue and claim credit, thus neglecting the security bureau’s bottom line in monitoring financial crimes,” he added.

Another line of speculation floated in a pseudonymised Ming Pao column highlighted US President Donald Trump’s close links to the two biggest prediction market platforms, US-based Kalshi and Polymarket. His eldest son, Mr Donald Trump Jr, is strategic adviser to both platforms.

Hong Kong’s sudden halt to its basketball betting plan may hence be related to its wanting to steer clear of US-China tensions, said the article, citing political insiders.

The actual reasons for the U-turn remain shrouded in mystery.

But the latest fiasco does suggest that even nearly 30 years after the handover from British to Chinese rule, Hong Kong’s leaders are still struggling to grasp just what their “big boss” prioritises.

There was a time when advancing the city’s economy took greater precedence over most other matters.

There was also a time when the city’s government under the “one country, two systems” framework had an almost free hand in making economic decisions.

Not any more.

Hong Kong’s leaders have to bear that in mind; that’s just how the ball bounces now.