A Historical Evolutionary Perspective on China’s Open Horse Racing Problems and Choice Strategies

Abstract

There have been horse races for many centuries. Horse racing is closely related to horse betting, which is illegal in China, and strictly speaking, horse betting is regarded as gambling. If horse racing opens up in China, “horse betting”, legally, will likely be included as a part of the process. Since the founding of the People’s Republic of China, China has banned horse racing at the beginning of its development. After China’s reforms and opening up, it was tacitly approved and then refused until now. Several provinces in China have made pioneering contributions in this area since the 1990s. Nevertheless, the Chinese authorities are cautious about such plans for various reasons. Until now, the central government has not liberalized the scheme except for a few local trials of speed horse racing, which do not have the property of “betting on the horse”. This paper explores its problems in terms of both historical evolution and realistic development. Then, it proposes practical options for horse racing development based on summarizing the expansion of existing policies to promote horse racing. These options are in response to the lack of development models not mentioned in the guidelines.

1. Introduction

The modern equestrian originated in England, and its traditional meaning of riding has evolved into other forms of unification, including horse racing [1]. More than 2000 racecourses are located in 88 countries and regions worldwide, generating hundreds of billions of dollars annually [2]. Various races have been developed, such as flat, steeplechase, harness racing, and endurance racing [3]. As the economy grows and people’s living standards improve, the demand for fitness and recreation, as well as sports and athletics, increases. As a leisure and cultural activity with welfare characteristics, horse racing has become a powerful source of capital and a pillar industry in the modern economy. Horse racing is a cross-fertilization industry that combines primary, secondary, and tertiary sectors. In terms of its industrial components, explicit institutional characteristics, social class composition, and cultural and moral structures, this complex system possesses both universal and unique regional characteristics. In China, the State Council published the “National Fitness Plan 2016–2020” and the “Health China” 2030 Plan Outline in 2017, both of which mention the sports industry [1,4]. A developing horse racing industry, which has become a symbol of the social and cultural development of countries such as the United Kingdom, the United States of America, Australia, Ireland, and Japan, will provide new opportunities for the Chinese economy.

There is a long history of Chinese horse culture. As early as the Spring and Autumn Periods (770 BC–476 BC/403 BC [5]), it demonstrated the art of taming horses through equestrianism, polo [6], horse dancing, horse walking, horse racing, and other sports and entertainment activities. The following related books have been recorded: Sun Yang (Bo Le) “Bo Le Xiangma Jing”, Mawangdui silk book “Xiangma Jing—Da Guang Broken Chapter”, Han Dynasty Ma Yuan “Xiangma Bone Method”, Dunhuang Cave 302 “Nail Horse Palm Picture”.

However, China’s horse racing activities remained confined to a small number of enthusiasts and only focused on speed without becoming profitable. Since the introduction of government documents at all levels regarding the development of horse racing betting, there have been many discussions in China about opening up horse racing, including concerns about gambling. Reviewing and analyzing the history of horse racing in China during its brief opening, the information collected came mainly from government documents and the news media. This paper presents a detailed analysis of the origin, allowed period, and strict prohibition of horse racing in China’s trying test, to provide you with a better understanding of the problems that remain to be resolved. As government documents have been introduced about regulating horse racing at all levels, the discussion of opening up horse racing in China has continued. The discussion will focus on whether China has the conditions to open up horse racing at this stage and what problems Chinese society will face if horse racing is allowed to proceed.

2. Materials and Methods

In this study, one case study was used as a research design. China is a country with a long history of horse culture as a criterion—the history of horse racing in China. There have been few international studies conducted on Chinese horse racing culture, and the majority of information collected was in Chinese. Due to the Chinese language skills, existing knowledge of Chinese sports, and familiarity with documentary sources among the study group, sufficient data was gathered and carefully analyzed.

For analyzing horse racing-related sports policies and recent trends in China, we used a qualitative research strategy with data from official and semi-official documents [7]. The text of the policy-related horse racing category mainly includes the provisions of laws, administrative rules, and regulations. Data sources include Chinese government information disclosure columns, academic publications and other types of documents, and internet news sources. Policy texts are collected from public sector websites such as the State Council, the Central People’s Government, provincial and municipal governments at all levels, the National Sports Administration, and the National Development and Reform Commission. Most websites contain a page called “Policies and Regulations” that lists numerous laws, administrative regulations, and statutes relevant to the respective public sector organizations.

The National People’s Congress established a database of Chinese laws and regulations https://flk.npc.gov.cn/, accessed on 10 June 2022) and searched the full text with the keyword “horse racing”. We then compared the search results with the listings we obtained from government agency websites. To address information gaps, we used Google and Baidu to find data that complemented policy texts, including books, journal articles, and papers written by prominent international and Chinese scholars such as Hongwu Xia, Pinlin Li, and Zunwen Qin [8,9]. These data are supplemented by the output of semi-official mass media, such as Sohu News, daluma, and Baidu.com. Through this approach, we identified 38 laws, administrative regulations, and statutes that we categorized as horse racing-related policies. Twelve of these articles are entry standards for speed horse racing established by the China Equestrian Association, which were and are carefully reviewed to be inconsistent with the content explored in this paper and therefore were not discussed.

This paper focuses on the use of government documents and the press as the primary sources of information on the topic of horse racing by searching for the term “horse racing” and selecting and discussing the topics using the method proposed by Ryan and Bernard, i.e., two topics: the period when horse racing was allowed and the period when horse racing was prohibited [10]. The analysis is categorized according to the chronological development of “horse racing” in China. Through a review of horse racing history, we analyze China’s consideration of whether to open up horse racing as a sporting event. This approach is valuable because it clarifies the history of horse racing as a sport in China and details the views of various levels of government at different times. This will help to assess any relationship between motivation or participation and regime type. The insights that this type of analysis can provide will further the discussion of state attitudes towards horse racing as an industry and will also provide a solid basis for expanding future empirical work.

3. Results

The history of horse racing in China was reviewed and summarized by sorting out the timeline of major events as shown in Figure 1. It also clearly identifies the big events at different times regarding the development of horse racing that affected the race.

3.1. 1844–1949: Period When Horse Racing Was Allowed: Before the Founding of the People’s Republic of China

After Hong Kong Island was ceded to the British colony by the Treaty of Nanking, horse racing took place at Happy Valley Racecourse in 1846. Since the Hong Kong Jockey Club was founded in 1884, the scale of horse racing in Hong Kong has grown significantly. Since Hong Kong International Races were first held in 1988, the standard of horse racing continued to improve, and owners continued to invest in high-powered horses to compete. The Hong Kong International Race, held annually in December, draws the top countries in flat racing, with the Hong Kong Cup offering the highest prize. Due to operational difficulties, Macau horse racing was abandoned in the 1980s in favor of flat racing and was only reintroduced in the early 1990s after funding had stabilized.

Throughout mainland China, since the Manchu period in 1850, twelve horse racing clubs have existed in Shanghai, Tianjin, Beijing, Hankow, Qingdao, Kaifeng, Tangshan, and also one other [11]. At that time, the two biggest horse racing clubs in Shanghai were Shanghai Happy Valley and Tianjin Jockey Club.

3.2. 1949–1985: The Ban Period after the Establishment of the People’s Republic of China

Since the founding of the People’s Republic of China, horse racing has been prohibited by the government due to the involvement of gambling. After the reform and opening up, horse racing was revived. However, they have been called off one after another due to alleged gambling. In the article, Qin Zunwen explains that “the betting amount, timeliness, and risk of horse racing betting are all controllable, and the horse racing industry not only drives the chain development of horse breeding, horse breeding, horse selling, harness, and equestrian but also thwarts the underground private lottery and outbound gambling [9]”. By the 1980s, China had more than 100 state-owned breeding farms [12]. After China began to promote agricultural mechanization, horses were quickly replaced, and the wartime demand for horses decreased, so financial subsidies for state-run horse farms were eliminated [13].

Private racecourses and horse racing clubs have emerged in China’s major cities since 1985. There have been three waves of climax in the local trials of horse racing so far. The first wave climaxed in Guangdong (focusing on Guangzhou), the second wave followed in Beijing, and the third wave climaxed in Wuhan [14]. Upon their return to the Olympic Games following 32 years of absence, China came up with the strategy to put competitive sports at the forefront, explicitly aiming at winning gold to direct limited resources into “small, precise, and sharp” projects. As a result, resources were shifted from mass sports to “competitive” sports, of which horse-related sports are one of the significant projects [15].

3.3. 1986–1999: A Brief Period of Acquiescence for the Opening of Horse Racing

In February 1987, Xi’an held its first horse race with prizes, and in April 1991, the first horse racing club appeared in Shenzhen. The “Guess the First horse” flat horse race was held the following year. After being inspired by Shenzhen, Guangzhou began to imitate the Hong Kong model and has been very happy with the horse race betting market [3]. The Guangzhou Municipal Government proposed a horse racing event program in 1992 and the Guangzhou Sports Development Co. The then mayor of Guangzhou City was the honorary chairman of the board of directors of the Guangzhou Jockey Club, and almost all the influential leaders of Guangzhou City served on the board of directors.

The development of commercial horse racing in mainland China began in the early 1990s, influenced by Hong Kong. As a result of profit motives, some horse racing sports in mainland China have started to attempt to surpass the supervision boundaries.

In April 1991, the first horse racing club on the mainland since 1949 opened in Shenzhen, and the following year it held the “Guess the First horse” flat race. The first commercial horse racing boom wave emerged in Guangzhou following the initial horse lottery trials. In 1992, Cheng Chunbo, a farmer entrepreneur in Beijing, invested 80 million yuan in establishing the Beijing Country Racecourse and has been operating it since. With the tide of reform after 1992, Guangzhou tried horse racing and betting in the style of Hong Kong. The Guangzhou Race Course, completed in 1993, became a non-profit organization for sports and entertainment run by the Guangzhou Municipal Government.

The track holds two to three races per week, divided into day and night races, and has more than 100 off-track betting outlets. It once set a record of more than 20,000 people watching a race and wagering more than 12 million RMB daily during its peak operation [16]. With this horse racing feast, the central government demonstrates how it uses the space it has given in the context of reform and opening up and in light of enormous economic growth opportunities backed by the local government leadership and openly organized by the Guangzhou Jockey Club. Policy innovation followed this pattern in the early days of the market economy. The central government will not explicitly state its position with regards to some reforms that have benefits and risks and have been uncertain for some time. Instead, it will allow local governments to carry them out first, and if they cause more harm than good, it will ask the local governments to stop.

A gambling problem emerged due to this unclear method of making decisions. In the absence of any regulation of the market economy, horse race betting, operated by the Jockey Club, became popular in the 1990s. Illegal organizations began operating underground, betting on horses, which intensified the controversy over the experiment. The Guangzhou racecourse was ultimately closed in December 1999 following seven years of operation, with a total of 757 horse races held, and the first battle of the Guangdong horse lottery trial was overturned [16].

3.4. 2000-Now: Without Betting on Speed Horse Racing, Horse Racing Has Seen an Unrestricted Period of Prohibition in China

However, the increasingly open situation still provides opportunities for horse betting experimentation. Beijing’s Tongzhou’s so-called Asia’s largest racetrack, Tongshun, was built by a Hong Kong company in August 2001. In the race, there is no horse betting competition; in order to avoid gambling, the racecourse deducted costs after a large number of profits in the name of taxes, with the local government share, but this time it is the local government to take 70% and the racecourse only 30% [17]. During the first Western China National Equestrian Festival in 2001, the scandal of horse betting in Chengdu emerged [18]. The “Consultation Draft on the Strict Prohibition of Illegal Horse Betting Activities”, released in 2002, evolved into a joint document issued by five ministries prohibiting the operation of horse racing activities involving betting. After the document was released, the racecourse continued to conduct seasonal horse racing in 2003. Beijing Tongshun Racecourse suspended all commercial horse racing activities in 2005 due to the absence of a legal basis for betting. The racecourse had opened nearly four years prior, twice suspended, in conjunction with a severe crackdown on gambling [19].

An investment group from Hong Kong began constructing the Oriental Horse City in Wuhan at the end of 1999. Since then, horse racing has developed at the level of the Wuhan city government. As part of the “two sessions” he National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) in Beijing in March 2005, some Wuhan delegates proposed the creation of a trial “horse racing sports lottery” in Wuhan, proposing the combination of sports lottery with speed horse racing to form a “horse racing sports lottery” with Chinese characteristics, and the “China Racing Lottery Research Group” was subsequently established in Wuhan. The Ministry of Finance replied in the same year that the current conditions were not ripe for introducing a horse racing lottery in China but agreed to conduct a preliminary investigation [20].

The State General Administration of Sports and the Wuhan Municipal Government approved the establishment of the Wuhan Horse Racing Lottery Research Center in the Oriental Horse City in 2008, while the “Guess the First Horse” game was introduced at the China Open Speed Racing Championship trial at the Sixth Horse Racing Festival at the end of that same year. As soon as the horse racing information is read, the ticket can be exchanged for the horse number they were betting on. If the horse they are betting on wins the championship, it is possible to exchange the ticket for a “top scratch” ticket and redeem the prize if it is scratched [1]. These approaches were designed to reduce gambling risk and switch between betting and guessing. As a result of the successful planning of Wuhan, the development of horse racing with betting tests has once again been secured.

China’s first participation in the equestrian competition has become one of the hottest issues of the year following the success of the 2008 Summer Olympics in Beijing. Local governments are again attracting the public’s attention to the horse racing industry.

Table 1. Horse racing-related policies of China.

Policies	Time	Posting Department	Main Content
Several Opinions on Promoting the Construction and Development of Hainan International Tourism Island	2009	The General Office of the State Council	Explore the development of quiz sports lottery and significant international events instant lottery in Hainan, to try out some internationally accepted tourism and sports entertainment projects. In a number of policies issued by the Hainan government, the word “horse racing” was not mentioned.
Guiding on Accelerating the Development of Modern Horse Industry	2016	The government of Xinjiang Uygur Autonomous Region of China	By 2020, the region’s horse inventory will reach 1 million. The output value of the whole industry chain of the horse industry will reach more than RMB 20 billion, absorbing more than 50,000 work positions. Paying attention to building a modern horse breeding system, horse racing as traction, cultural tourism, product horse industry on a large scale, forage training as an industry, exchange, and trade.
Several Opinions of the People’s Government of Inner Mongolia Autonomous Region on Promoting the Development of Modern Horse Industry	2017	The Government of Inner Mongolia Autonomous Region of China	Pay attention to the protection and improvement of horse breeds and breeding, strengthen the security of local breed resources such as Mongolian horses; accelerate the breeding of pure horses; carry out a census of breed resources; and establish an international standard for horse breed registration and management system.
Implementation Program of Key Projects for the Development of Modern Horse Industry	2018	Department of Agriculture and Animal Husbandry of Inner Mongolia Autonomous Region of China	The autonomous region proposed modern horse industry development funds mainly to support the horse breed improvement project, horse main tourism boutique project, Mongolian horse spirit of promoting the project, horse industry personnel training project, and other four major projects: horse product processing to enhance the action, horse brand event creation action, horse industry science and technology innovation action, horse health and safety action, and another four action aspects of work.
Guiding Opinions on Supporting Hainan’s Comprehensively Deepening Reform and Opening-up	2018	The General Office of the C.P.C. Central Committee and the General Office of the State Council	Encourage Hainan to develop horse racing sports, and support the exploration of competitive sports lotteries and significant international events instant lotteries.
Implementation Plan for the Construction of an International Tourism Consumption Center in Hainan Province	2018	National Development and Reform Commission	Encourage the development of horse racing.
Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area	2019	The General Office of the C.P.C. Central Committee and the General Office of the State Council	Promote the growth of equestrian sports and allied sectors, and promote collaboration between Hong Kong and the mainland in inspecting and quarantining horses, forage, feed, veterinary medications, biologic goods, and customs clearance.
Hulunbuir City Modern Horse Industry Development Plan (2019–2025)	2020	Hulunbuir Municipal Government	Establish two core bases for breeding horse breeds with Mongolian horses and Daxinganling horses as the core, respectively; build Hulunbeier City Vocational and Technical College into a well-known domestic equestrian talent output; build Hulunbeier City into an international zone for horse vaccination and immunization; build a horse-specific feed processing enterprise with an annual output of 10,000 tons; and build 14 high-level racecourses.
National Horse Industry Development Plan (2020–2025)	2020	The Ministry of Agriculture and Rural Affairs of China, General Administration of Sport(SGAS)	To make a macro plan for the development of China’s horse industry, it is planned that by 2025, the framework for the development of China’s modern horse industry will make a macro plan for the development of China’s horse industry, it is planned that by 2025, the framework for the development of China’s modern horse industry will include modernized breeding, efficient breeding, diagnosis, health care, disease prevention and control, training, performance measurement, competition and performance, fitness and leisure, cultural tourism, product processing, and an industrial service system.
National Fitness Plan (2021–2025)	2021	General Administration of Sport	As a national strategy to further implement the acceleration of the construction of an intense sports country, in-depth and extensive, to strengthen the mass base of sports and cultivate the sports market. Vigorously develop the sports industry to boost the economy and, more importantly, return sports to their original position of fitness, entertainment, and challenging oneself.
Development Plan of Modern Horse Industry in Altai Region	2021	Jimnai County People’s Government	Accelerate the improvement of Altai horse selection and breeding; expand and strengthen the horse tourism industry; serialize, professionalize, and commercialize equestrian sports; take the lead in implementing riding quality education and professional talent training projects; and accelerate the development of horse products.
Letter from the State Office [2021] No. 79	2021	General Office of the State Council	Hong Kong, Macau, and Guangdong will host the 15th National Games in 2025.

Source: Authors, based on literature.

lists the policies related to the horse racing industry that have been released by Chinese governments at all levels since 2008. The State Council issued a “number of opinions on promoting the development of Hainan International Tourism Island construction” at the end of 2009. The State Council proposed “in Hainan, a test of some international tourism projects and sporting events, to explore the development of sports lottery and large international events instant lotteries”. The Chinese government introduced policies to support the horse racing industry. Document No. 12, released on 15 April 2018, the State Council of the Central Committee of the Communist Party of China’s “Guiding Opinions on Supporting Hainan’s Comprehensively Deepening Reform and Opening-up” clearly proposes to “support the construction of a national sports training southern base and provincial sports centers in Hainan, encourage the development of beach sports, water sports, horse racing, and other projects, and explore the development of competitive sports lottery and large international The development of sports lottery and large international events instant lottery [21]”. On 29 September 2020, the National Horse Industry Development Plan (2020–2025), prepared jointly by the Ministry of Agriculture and Rural Development and the State General Administration of Sport, was adopted by the State Council, which affirms the rationality, legality, positivity, and health of horse racing at the national level. Following the promulgation of the Horse Industry Plan, various provinces, municipalities, and autonomous regions, including Guangdong, Hubei, Inner Mongolia, and Xinjiang, have promulgated plans to develop their local horse industries. The Wuhan Municipal Government released its Action Plan for the Development of Wuhan’s Horse Industry and the Transformation and Upgrading of Speed Horse Racing in 2018, which outlined its plans for the future. The Central Committee of the Republican Party of China and the State Council issued “The Outline of the Development Plan for the Greater Bay Area of Guangdong, Hong Kong, and Macau”, whose most important goal is to “create an economic circle of the horse industry in Hong Kong and Guangzhou”, signed a framework cooperation agreement with the Hong Kong Jockey Club, and has plans to hold a regular horse race in 2025. The Hainan Province Department of Tourism and Culture formulated the “Guide on the Development of Horse Racing in Hainan Province” in May this year. On 27 November 2020, the China Equestrian Association Speed Racing Committee was officially formed in Guangzhou. On 17 January 2021, the committee held its first meeting in Sanya, Hainan, promulgating the “China Equestrian Association Speed Racing Race Management Measures” (for trial implementation) and “China Equestrian Association Speed Racing Race Points Measures” (for trial implementation). Although the new rules are more in line with the actual tournament, they still have several shortcomings, such as the lack of an organized structure and professional management staff that match the scale and importance of the event, the lack of financial security that matches the size of the event, and the lack of venue facilities that meet the tournament’s standards.

4. Discussion

China has made efforts to open up horse racing. However, hidden beneath the “horse racing” fever is the expectation of opening up the “horse racing lottery”. A consequence of the “horse racing” fever is taxation. Approximately 30% of the global economic impact of horse racing is attributed to the horse-related industry [22].

For the development of commercial horse racing, horse racing is an important economic engine. Most horse lottery bets and proceeds are used for lottery returns in international markets. In contrast, the remaining funds are used for tax payments, lottery issuer commissions, race operator rebates, and charitable expenditures. Globally, the return rate for horse racing lotteries is typically over 70%, with Japan and the United States of America in the range of 75% to 80%; Hong Kong and China have the highest return rate at 82.5% [23]. According to economic statistics from 2010, horse racing generates a spin-off of $5.7 billion annually in Canada [24].

Most of Hong Kong’s horse racing prize money is derived from gaming revenue. In 2020/21, the betting turnover for the Hong Kong horse racing season exceeded HK$136 billion, the first time exceeding HK$130 billion. This represents a 12.1% increase over the previous season and marks the eighth consecutive year that the total betting turnover has surpassed $100 billion [25]. Behind the fame, a horse race cannot be separated from the vast investment in human, material, and financial resources, which means that the horse racing industry will create different jobs. In Newmarket, England, for example, there are 8500 jobs directly or indirectly related to the horse racing industry, contributing GBP 205 million of revenue to the British economy each year, and it can attract 340,000 spectators, forming a closed-loop industry chain of breeding, horse training, horse racing, and horse betting. The closed-loop industry chain of horse breeding, training, racing, and betting is formed [26]. There are approximately 52,732 position of employment and participation within horse racing industry in New Zealand. There is a value added contribution of NSD 1635 million to the New Zealand economy generated by the racing industry. In 2008/09, this amount represented 0.90% of New Zealand′s real GDP [27].

Several derivative activities, including horse racing betting, are also important sources of revenue for the sport. Furthermore, national horse racing clubs have developed tourism, accommodation, and catering activities based on horse racing. Although horse racing in China has not been legalized at present, from the perspective of the current scale of China′s horse industry, the Chinese market is worth looking forward to [28].

In China at the end of the last century, the Guangzhou racecourse was run on a small scale with the acquiescence of the state, not daring to open up to total input, but still created a record of a race with more than 20,000 people watching. The highest day of investment amounted to more than RMB 12 million. During the seven years of operation, Guangzhou Racecourse has not only been able to maintain its economic balance but has also covered all the expenses for two sessions of the National Speed Horse Race, undertaken all the costs for the China Equestrian Training Base, sponsored many events such as the World Weightlifting Championships, the National Seventh Games and the Ethnic Minority Games, and donated more than RMB 300 million to the China Charity Federation for provincial and municipal disaster relief, education, and poverty alleviation The donations covered culture, education, disability, welfare, security, disaster relief, construction, etc. [12,29]. The club has created more than 4700 jobs [16]. Additionally, the racecourse has become an important tourist attraction in Guangzhou. Throughout the past seven years, the Guangzhou Jockey Club has contributed significantly to the social and economic development and public welfare of Guangdong Province, creating employment and spurring the development of many industries, including tourism and transportation. The Guangzhou Jockey Club played a significant role in creating an economy at that time. Following the ban on horse racing in 2001, the investigation following the racecourse closure revealed serious problems involving misappropriation of public funds and bribery, with the Guangzhou Jockey Club losing 600 million RMB in six years [12]. It is difficult to regulate such a large market without laws and regulations, which is one of the disadvantages.

Reasons for not opening horse racing:

Excessive involvement:

From the end of the Qing Dynasty until the establishment of the People’s Republic of China, Wuhan has been a center of horse racing culture. Due to China’s large population and deep-rooted horse racing culture, horse racing is likely to cause a collective addiction to horse betting. Before 1949, there were three large horse-racing stables in Wuhan, “Western Business”, “Chinese Business”, and “World Wide”, and Wuhan was known as the gambling capital in the old days [30]. Wuhan horse racing experienced a boom during the 1930s when the old government supported horse betting. This occurred due to the size of the racecourse, a large number of spectators, the wealthy merchants who operated the racecourse, the racecourse sharing their profits with the government, and public support. This eventually led to horse racing becoming a popular form of gambling. As a result, many people gambled on horses and lost their money. Nearly 10,000 taels of silver were deposited daily in the government’s bank accounts. Following the founding of the People’s Republic of China, horse racing tracks were abandoned entirely. Until now, there were more than 30 horse-related place names in Wuhan. During the Japanese occupation of Wuhan in 1938, the racecourse was forced to close. After 1949, the Chinese government opposed current-cost gambling, and since then, horse betting has been illegal in mainland China for decades.

According to a study by the Australian Gambling Research Centre (AGRC), The AGRC analyzed data from more than 14,000 people questioned as part of the 2015 Household, Income, and Labour Dynamics in Australia Survey and found that 975,000 people regularly bet on horses or dog races [31]. Andrew Armstrong, a researcher at the AGRC, said, “Overall, among the average gambler, the incidence of the problem is between 16% and 17% [32]”. Nowadays, watching horse racing in Hong Kong has become an art form deeply rooted in people’s hearts. As the betting cost is not enormous, people can buy it, and the horse lottery, like other sports lotteries, has long been integrated into the lives of the general public. This causes many people to become addicted to it, and the benefits created by this can make a seemingly fair game with a blatant gambling cheat-like existence, appearing to control the scene [33]. Assuming that mainland China is open to betting on horse racing, with China’s population of 1.402 billion, there will be more people at home betting on horse racing activities. Due to the webcast in recent years, netizen bloggers and the celebrity effect can pull down the age of gambling participants and make it more difficult to control.

Location of the racecourse:

Only a limited number of mainland sites have been cleared of epidemic diseases. Only Guangzhou’s Conghua Racetrack and the soon-to-be-built Tonglu Racecourse can host this significant international horse racing event. One of these, the Conghua Racecourse in Guangzhou, was leased to the Hong Kong Jockey Club for long-term use. More and more colts are heading to Hong Kong after preparing at the Conghua Racecourse since the 2020/2021 Hong Kong racing season. The Conghua Racecourse is the only thoroughbred training center and horse farm on the mainland that meets international standards. The government and the Jockey Club plan to utilize the location of the Conghua Racecourse to promote the development of a world-class horse industry in the Greater Bay Area. The Conghua Racecourse will hold regular horse racing events from 2025 onwards. However, it is unknown whether a horse racing lottery will be held in the future. In the end, will the two significant racecourses on the mainland only provide training grounds for international horse racing events, or will they only be able to hold non-competitive events rather than “horse racing with betting” events? Second, most of the racecourses built in mainland China are in first or second-tier cities with easy access to transportation and excellent urban infrastructure, which means that these cities that have the resources to develop a variety of industries will have to join the gambling horse racing industry, which will further exacerbate the unequal development of the province.

Horse breeding industry:

Today’s horse racing is built upon excellent horse breeds, and different horse breeds are suitable for different types of races. Furthermore, the presence in the breeding industry is mainly related to equine events, all of which have a sporting aspect. The 2008 Beijing Olympics did not provide the anticipated springboard for the growth of equestrian sports in China, and the absence of horse races will undoubtedly affect the development of the sport. A horse racing competition with frequent events provides horses with a wide platform to compete. Only horses with proven track records recognized by the International Thoroughbred Registration Committee are eligible to breed thoroughbred offspring in horse racing. At the international level, competing horses must possess a pedigree book containing accurate and detailed information about their sires and dams. Before the promotion of equestrian sports in China, pedigree certificates were not available for domestic horses, which harmed the quality of breeding as well as the price of horses. Horse breeding is the foundation of the entire horse racing industry. At this stage, the breeding of horses in mainland China is far below international standards. If horse racing events are to be held, the number of horses participating in the competition must be guaranteed. The training, welfare, and medical care of horses and other related industries must be involved. The foundation of the entire sector must be built to ensure that a comprehensive “industrial upgrade” will be carried out from top to bottom, starting from the relevant legal policies. Horse racing will be developed based on being able to guarantee fairness, equity, and transparency. There is currently only the National Horse Industry Development Plan (2020–2025) [34]. In a national policy-oriented horse industry, there are no relevant rules and legal norms to support, and the overall completion of the plan must be achieved by 2025. The specific results can only be evaluated after implementation. In recent years, it has been discussed that the open Wuhan racing needs a period of observation. It is not recommended to open the next development step until the relevant industrial infrastructure has been completed.

Laws and regulations:

Various countries and regions operate modern horse racing differently because of their histories, cultures, sociopolitical conditions, and economic systems. There are similarities and yet specific and substantial differences in how modern horse racing is conducted and operated. This difference arises as a result of the operational management model used. For example, the taxation of horse racing and horse lotteries in the United States of America is governed by state-specific joint-venture structures, but they can be sold across state lines. In addition, every racecourse has a committee of racing deacons responsible for officiating. In most places, the horse racing deacon board is formed by the government of public officials to fill the post, and the judges are state government employees who are not involved in the racetrack to ensure openness, fairness, and equity. The betting rebate rate for commercial horse racing in the United States of America is high, while the tax rate is low. The ability of the U.S. horse racing industry to be a global leader is linked to government support [29]. Despite this, they all share a common foundation: laws and regulations. Although horse racing is a betting sport, to prevent problems before they occur, the government-led horse racing industry must first develop other specific guidelines, rules, and regulations to govern how horse racing is judged. The results disclose the amounts of bets and payouts for each race, ensure the accuracy and correctness of odds calculations and payouts and regularly announce money flow into the industry.

Laws:

Due to the absence of relevant laws and regulations in mainland China, it is not likely to be able to obtain a gaming operation license like the Hong Kong Jockey Club. China’s government only conducts sporting and competitive activities related to equestrian sports. There are currently non-gaming horse racing sports in Wuhan and other places in the form of club activities.

Currently, speed racing events are held at the National Games and the Civil Games, in addition to the permanent China Open Speed Racing Championship [35]. Nevertheless, based on the history of the development of equestrian sports in various countries, it is inevitable that equestrianism must be combined with horse racing to succeed. The “Outline” proposes the promotion of the moderate and diversified development of Macau’s economy along with establishing a base for exchange and cooperation with Chinese culture as the mainstream and the coexistence of multiple cultures, which is likely to break down the barriers between the mainland and Macau [36]. The issue of horse lotteries first came to light following the reform and opening up of China’s lottery industry and its sports betting lotteries. The “China Welfare Lottery” was established in the late 1980s and early 1990s. To unify the management, numbering, printing, and issuance of sports lottery tickets worldwide, the National Sports Commission established the Sports Lottery Management Center in early 1994. These activities became known as the “China Sports Lottery”. After introducing the Chinese soccer lottery in October 2001, the lottery gradually became more competitive. A basketball betting lottery was introduced in 2005 [37]. Across all countries where horse racing is held, betting lotteries are an essential service sector. They represent an important link in the horse racing industry chain and contribute significantly to its success. Although the State Council adopted the Lottery Administration Regulations at its 58th executive meeting in 2009 to provide guidelines and principles for lottery sale organizations, market regulation, lottery risk control, the use and reallocation of lottery winnings, etc., and the Rules for Implementation of the Lottery Administration Regulations were promulgated in February 2012 to provide specific regulations on the use of lottery public welfare funds. Even though the State Council adopted the “Regulations on Lottery Administration” at its 58th executive meeting in 2009, which provide directional and moral guidance and regulation on lottery sales institutions, lottery market regulation, lottery risk control, and lottery fund use and reallocation, and the “Rules for the Implementation of the Regulations on Lottery Administration” were officially approved and promulgated in February 2012, providing specific regulations on the use and management of lottery public welfare funds, there is still a considerable gap between the regulation of lottery distribution and the prevention of related risks.

Regulations:

In terms of China’s currently existing rules regarding the horse racing industry, in 2021, two management measures were drawn up by the China Equestrian Association: the “China Horse Racing Association Speed Horse Racing Management Measures” (for trial implementation) and the “China Horse Racing Association Speed Horse Racing Points Measures” (for trial implementation), they are not currently enforced, due to the public safety accident that occurred on 22 May 2021, in the Baiyin Yellow River Stone Forest 100 km off-road race in Gansu Province, resulting in multiple casualties, speed horse racing and other related races are currently at a standstill [38]. For how horse racing is conducted, including the creation of rules, a team of judges, a team of jockeys, and a team of trainers, until the China Equestrian Association introduced its management methods, speed horse racing in China had different regulations. There was no unified scoring system, no national standard of race management, and no third-party race management monitoring body. When capital poured into the horse racing industry, the first thing that came to mind was simply to construct horse farms.

Ethical values:

Regarding the horse racing lottery distribution, it is difficult to adjust to traditional values and break through the last line of policy. As a matter of tradition, Chinese culture has viewed horse racing as solely a “gambling” activity, and there has been resistance to betting on horse racing in terms of public opinion. Is the horse lottery a combination of horse racing and a lottery? First, there are references to gambling in Chinese texts and laws, as well as a definition of gambling in the book “Dictionary” of Chinese texts: Gambling is a form of improper entertainment. Various forms of card fighting, throwing the general, and other forms of wagering with property exist.

Under section 303 of the Criminal Law of the People’s Republic of China, gambling is defined as the following: “Whoever engages in gambling for profit and gathers a crowd or gambles for business shall be sentenced to a term of imprisonment not exceeding three years, detention, or control, together with a fine [39].” Horse racing is included in the definition of gambling, as is the purchase of lottery tickets. This leaves the public with the impression that the horse racing lottery is the same as gambling, making it extremely difficult for the public to accept the opening of horse racing. It is not gambling as long as the state conducts the lottery to raise public funds for the benefit of welfare, sports, and other social and public causes, whether it is a football-based or a horse race-based lottery. But horse racing attempts have never been covered by the legal framework, despite being controlled by market forces and explored through initiatives contributing to economic and social development.

On the other hand, the bottom line of “gambling” needs to be considered. As a result of local experimentation, sensitivity is reduced, but the authorities cannot effectively supervise the process. Therefore, the experiment of this horse lottery can only be stopped once the uncontrollable “gambling” takes place.

5. Conclusions

We have made the following four recommendations to address the problems that exist.

5.1. The Shaping of Horse Culture

The modern horse racing industry combines sport, entertainment, and leisure. Founded in 1905, Britain is the home of modern horse racing, and its development projects are based on its own culture. The horse has played an essential role in the traditional British national culture as a symbol of wisdom, bravery, agility, loyalty, manageability, nobility, chivalry, and gentlemanly manners. As a significant horse breeding country, China has a variety of national cultures, and its horse culture is likely to be very vibrant. In recent years, the development of special tourism based on the culture of ethnic minorities has vastly increased. It is not uncommon for tourists to visit not only tourist villages but also minority villages to learn more about minority cultures; Tibetans and Mongolians make up a large proportion of this. If ethnic minorities can promote their own horse culture, it should lead to the development of China’s horse culture. The conditions for opening horse racing are not yet available, so it is better to maintain more localized horse races, which have existed for many years and can provide economic benefits to the local area.

5.2. Lottery Law

Most countries in which the gaming industry operates have already developed and perfected their national legislation.

Hong Kong and Macao have special lottery laws and gaming regulations with very detailed and strict regulations on all aspects of lottery issuance, management, and the use of funds raised, but for the domestic lottery industry. However, the State Council has enacted the Notice of the State Council on Further Regulating Lottery Management, the Financial Management Measures for Lottery Issuance and Sales Organizations, the Interim Provisions for Lottery Issuance and Sales Management, and the “China Welfare Lottery Management Measures” and other regulations. Nevertheless, this does not reach the level of the law, as there are no details or regulations, and there are difficulties in ensuring specific implementation and operation. Considering the large lottery revenues generated by the horse industry, incomplete laws will certainly lead to problems at the Guangzhou racetrack and, therefore, must be accompanied by legislation that recognizes the legality of modern horse racing and has comprehensive regulatory measures in place.

At the same time, legislation must be enacted to determine a suitable model for the development of horse racing in China and to develop horse racing in a standardized, tripartite regulatory or government-regulated and highly participatory manner, which must also take into account the conditions of China’s national conditions and the localization of betting on horse racing to form a horse racing model with Chinese characteristics, to promote the healthy growth and ongoing development of China’s modern horse racing industry.

5.3. Targeted Horse Racing

The betting industry is undergoing rapid expansion, which will quickly stimulate the speculative (gambling) mindsets of the public, especially among the youth, and may have adverse social consequences. The second point is that horse racing requires venue facilities, race management, betting operation systems, and technical conditions. The existing racecourses in China, except for the Guangzhou racecourse, have better hardware and software conditions. In contrast, the other regions do not have these conditions and are not approved by the State Council, and the right to host the event lies with the local government, businesses, or even individuals.

A pilot program should first be implemented to prevent blind and hasty horse racing. The Hong Kong Jockey Club and relevant Jockey Club experts can be invited to conduct an assessment on a case-by-case basis based on international practice and the applicable requirements of the racecourse. Where the primary conditions are not available, betting should be prohibited and explicitly ordered to close down and be rectified; if the basic characteristics are functional, it should be functionally distinguished where only equestrian competition occurs. In addition, when selecting horse racing pilot areas, the racecourse conditions, the size of the city, the market conditions, and organizational capacity should be considered, in addition to the country’s overall needs.

5.4. Tri-Party Supervision

As a first step, the state should be responsible for approving the horse racing pilot. Second, all approved racecourses should be owned and operated by the state, not local governments or enterprises. A monopoly for the condition in the horse racing industry will ensure the credibility of the community and overall public interest in the use of funds raised, will ensure that the purpose of horse racing is to serve the community and to develop general welfare, and will prevent the market from becoming out of control due to local interests. Accordingly, the approval, ownership, and operation of the horse racing pilot should be under the “vertical management” of the state. This is evidenced by the success of the Hong Kong Jockey Club. Among the statements in the Outline of the Guangdong–Hong Kong–Macao Greater Bay Area Plan is the information to “promote the moderate and diversified economic development of Macau,” which implies that Macau may be a place to buffer the cultural conflict of “horse racing distribution” on the mainland and to gain policy flexibility. Specifically, in the face of restrictions based on traditional culture and policy, the mainland could try to issue horse racing lotteries in the Guangdong–Hong Kong–Macao Greater Bay Area to mainland residents traveling to Macau. Particularly with the opening of the Hong Kong–Zhuhai–Macao Bridge, the scale and frequency of travel to Macau by mainland residents will increase significantly. By utilizing Macau’s particular policy and cultural space, we can gradually accumulate experience and change perceptions and public opinion on the mainland, paving the way for future liberalization of horse lottery issuance and risk prevention.