China’s rich bet on year of the horse race
By Patti Waldmeir in Wuhan
Published: November 19 2010
There are only so many diamonds, iPads and Louis Vuitton ,Mah Jong sets a Chinese billionaire can buy in a lifetime. So now wealthy Chinese are looking for other ways to splurge, and discovering a passion for that richest of rich men’s toys: the thoroughbred racehorse.
Mao Zedong banned horseracing in 1949 as an immoral capitalist pursuit, but now China’s nouveaux capitalists are taking to it with a vengeance.
“Rich people in China are focusing more and more attention on this industry,” says Felix Wang, author of the China Horse Racing Bible. The China National Horse Industry Association expects horse imports to double this year over last.
“The Chinese entrepreneur is trying to turn his new money into old money ... and one of the shortcuts is an understanding of horses,” says Rupert Hoogewerf, publisher of the China Rich List.
Steve Wyatt, of the Nine Dragons Hill Polo Club near Shanghai, says China has a deep cultural affiliation with horses, “deeper even than America and the cowboys”. Rich Chinese enjoy the sense of power that comes from “having a horse that wins in front of other guys”.
“People don’t want to watch you play golf but they will come to watch your horse race,” he says.
Property developers have begun to respond by building residential complexes centred around horses, rather than golf. But funding this new passion is proving difficult for all but the wealthiest Chinese. For Beijing has kept a tight lid on horse race betting.
Racetrack betting is big business in Hong Kong and Macao; indeed, the Jockey Club is one of Hong Kong’s biggest philanthropists. But horse race betting on the mainland is banned, after two previous experiments with liberalisation in the early 1990s and mid-2000s.
Beijing tried commercial racing, but that ended in ignominy in 2005 when the Jockey Club slaughtered scores of horses, claiming it could not support them after the government banned betting again. Now developers and horse race enthusiasts are betting that a so-called “horse race lottery” could start soon – gambling, by a less morally contentious name.
Developers are building tracks in several cities. Meydan of Dubai is building the $4bn Tianjin Horse City, with a seven-star hotel. Shanghai, whose old racetrack is now part of People’s Square, is trying to resurrect colonial history with its Shanghai Race Club.
“All the richest people in Shanghai in the 1930s – like the Sassoons – were members of the Shanghai Race Club,” says the Club’s Byron Constable. And in Wuhan late last month, there was the biggest mainland horse race of the year – at the new Rmb2bn ($300m) Wuhan racecourse, which will eventually have a shopping centre and apartment complex too.
Wuhan, the capital of Hubei province and the centre of Chinese horseracing in the 19th century, is seen as a trial run for the lottery: spectators were allowed to “guess” which horse would win each race – and got a bit more than the cost of a cab fare if they were right.
The event had a decidedly amateur feel: the first day began with a parade of beauty queens on horseback (two of whom fell off); it ended when one of the horses vaulted the starting gate and landed on his head.
Mr Constable says he is betting that 2014 will be the year of the horse, in more ways than one.
Amy Feng, whose rich industrialist father owns 40 racehorses in Hebei province, hopes the horse lottery will start by then. “We want the government to allow us to bet, because that would bring more people into the industry,” she says. Beijing will have to find a way to reconcile communism with gambling if racing in China is to thrive