By Lucy Mullens, Executive Manager, Financial Crime Risk & Investigations, The Hong Kong Jockey Club
Background
The Hong Kong Jockey Club is a world-class sports, entertainment, and not-for-profit organisation. Founded in 1884, the Club's fundamental purpose is the betterment of society which sees the Club channelling the proceeds of a well-regulated betting operation into some of the most impactful community investment seen anywhere in the world. That purpose guides everything the Club does, and it is the lens through which its approach to anti-money laundering and betting integrity should be understood.
The Club’s regulatory environment is both clear and deliberately constructed. Under the Gambling Ordinance (Cap. 148),1 all gambling activity in Hong Kong is illegal unless expressly authorised by the government. The Club holds those authorisations for horse racing, football betting, and the Mark Six lottery, and is regulated by the Home and Youth Affairs Bureau (HYAB) on the advice of Betting and Lotteries Commission (BLC).
Adherence to robust anti-money laundering and responsible gambling standards forms a core part of the Club's licence. While the HKJC is not classified as a financial institution regulated by Hong Kong's Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), it chooses to proactively work directly with the Hong Kong Police Force and the Independent Commission Against Corruption (ICAC) to uphold the integrity of its betting as well as horse racing, a collaborative law enforcement model well-suited to its status as a designated public body.
Two pieces of legislation are particularly consequential to the Club: Section 25 of the Organised and Serious Crimes Ordinance (OSCO) makes it a serious criminal offence to deal with property knowing it represents the proceeds of an indictable offence. For the Club, this means that suspicious betting activity cannot be viewed simply as a customer conduct issue; where funds may represent criminal proceeds, the Club has a clear obligation to detect, assess, report, and disrupt that activity through its AML controls and law enforcement partnerships.
The second of these, the Prevention of Bribery Ordinance, which designates the Club as a "public body," means all HKJC employees are treated as public servants, and thus are expected to adhere to the integrity and accountability requirements which the position entails. In practical terms, this raises the standard expected of the Club: conflicts of interest, gifts, advantages, misuse of confidential information, and any facilitation of betting or racing corruption must be actively prevented, detected, and escalated through strong internal controls and close engagement with the ICAC.
The Club’s betting model and the shift to account-based wagering
The Club offers betting on three products: (i) horse racing, locally at Happy Valley Racecourse and Sha Tin Racecourse; or via commingling betting, through which HKJC pari-mutuel pools connect with international racing markets, including World Pool, for which the Club sits at the centre of the global liquidity model; (ii) football wagering on recognised overseas matches; and (iii) the Mark Six lottery. The Club also operates Conghua Racecourse in Chinese Mainland, though no betting takes place there.
What is particularly notable is the significant shift in recent years toward account-based digital wagering. Most betting activity now takes place through betting accounts, which are linked to a local nominated bank account in the customer's own name, through the Club's online and mobile platforms. A smaller proportion of activity takes place through over 80 Off-Course Betting Branches across the city, alongside a commingling arrangement through which HKJC pools connect with international racing markets. Cash betting and cash vouchers remain available at branches, though they represent a modest share of overall activity and therefore require targeted controls to manage residual anonymity and transferability risks.
This structural shift matters considerably for financial crime purposes. Every account bet creates a traceable, attributable audit trail. The dominance of account-based betting provides a comprehensive view of customer behaviour – a foundation upon which the Club’s AML framework is built.
AML challenges facing the Club
The illicit market: context and scale
Understanding the illegal betting environment is essential context for the Club's AML work. Globally, the United Nations Office on Drugs and Crime has estimated that up to USD 1.7 trillion is wagered on illegal betting markets each year. Approximately 65% of worldwide betting activity is concentrated in Asia, and the illegal component of that regional market is substantial, often exceeding the legal market in jurisdictions where licensed alternatives are absent or ineffective. Hong Kong is not immune to those pressures, and the Club's horse racing and football products have long attracted the attention of illegal betting operators.2 3 4
The link between illegal betting and financial crime runs deep. Illegal betting operators offer high payout rates, anonymous transactions, and minimal oversight, making them natural vehicles for placing, layering, and integrating illicit proceeds from drug trafficking, human trafficking, tax evasion, and corruption. The 2023 Singapore money laundering case, the largest in the city-state's history, illustrated this connection clearly, with illegal betting syndicates spanning multiple jurisdictions generating and concealing vast sums through networks stretching from Southeast Asia to Europe.5 6
A simple local example shows why this matters to the Club. In September 2022, Hong Kong Customs detected a case involving about 16,000 Mark Six tickets which had allegedly been purchased in Hong Kong for onward resale outside of Hong Kong and outside authorised channels. Customs later arrested two people suspected of money laundering and smuggling, seized about HK$280,000 in cash, and froze more than HK$1 million in assets.7
The case illustrates the illegal betting threat clearly: in this case, Club betting products can be targeted by organised actors seeking to move value, profit from resale, or exploit demand outside Hong Kong’s regulated system. For the Club, the risk is not only lost revenue, but loss of visibility as once betting activity moves outside legal channels, it becomes much harder to identify the customer, understand the source of funds, detect suspicious patterns, and protect the public value returned through tax and charitable contributions.
Beyond illegal betting: other financial crime threats
Illegal betting is the most prominent risk vector, but the threat landscape facing the Club is broader. Several other financial crime typologies present ongoing challenges.
- Loan-sharking and account aggregation. A recurring concern is the use of HKJC betting accounts as mechanisms for loan sharks to collect debt repayments, or for multiple individuals to deposit cash into a single account. Unusual cash deposit patterns such as high-frequency deposits from multiple branches into the same account, or amounts just below recording thresholds, can be indicative of this activity. Network analytics and deposit records are used to identify these group behaviours and distinguish legitimate activity from potential structuring or account-based debt collection.
- Match-fixing and race manipulation. Sports wagering carries an inherent vulnerability: the outcome that makes a bet valuable is the same outcome that a corrupt actor may seek to influence. Match-fixing and race manipulation sit at the intersection of integrity and financial crime especially when insider knowledge of a fixed outcome can be monetised through large, well-timed wagers, with the proceeds themselves representing criminal property under Hong Kong’s OSCO. The Club's close collaboration with racing stewards and law enforcement, combined with its betting analysis capabilities, is central to detecting unusual wagering patterns that may indicate manipulation.8
- Insider threat and corruption. As a public body under the Prevention of Bribery Ordinance, the Club faces a heightened responsibility to guard against internal corruption. Employees in possession of sensitive betting or operational information represent a potential vector for corruption, either through the exploitation of that information for personal gain, or through facilitation of external criminal actors. Staff integrity controls, supported by ICAC oversight, are a standing part of the compliance framework.
- Account fraud, identity farming, and mule accounts. Globally, an emerging threat to licensed betting operators is the organised use of fraudulent identity documents to open accounts for use in money laundering or fraud. In Hong Kong's context, strict customer due diligence requirements at account opening and the nominated bank account policy provide meaningful protection, but the risk of stolen or synthetic identities being used to establish seemingly legitimate account profiles requires ongoing vigilance.9
- Structuring and threshold avoidance at branches. Cash bet limits and ID recording thresholds at Off-Course Betting Branches create a control environment, but they also create an incentive for bad actors to structure activity below those thresholds. Repeated cash deposits made in small amounts, or customers visiting multiple branches in proximity, are well-established red flags that front-line staff and monitoring systems are trained to identify and escalate.10
How the Club responds: the three lines of defence
The Club's AML framework operates through three interlocking lines of defence. The first is built into daily operations, where front-line controls govern how customers enter and use the betting system. Account opening is subject to Customer Due Diligence, each customer may hold only one account, and cash deposits and withdrawals above specified thresholds trigger identification recording. Betting accounts linked to a nominated bank account must be in the same name: third-party bank transfers, account-to-account transfers, and credit betting are not permitted.
The second line of defence brings investigative and analytical depth to that operational foundation. Transaction monitoring covers betting activity on a continuous basis, while teams use network analytics to look beyond isolated transactions and identify broader patterns of structuring and layering. That work may involve analysing linked deposits across branches, clusters of accounts connected by location or behaviour, or accounts where the relationship between deposits, betting activity, and withdrawals appears inconsistent with normal customer use. It is further supported by enhanced due diligence via negative news monitoring, sanctions screening, source of wealth checks, and close engagement with law enforcement, all of which help build a fuller picture of whether apparently ordinary betting activity may in fact be connected to financial crime.
The third line of defence provides independent assurance over the effectiveness of risk management and internal controls across both operational lines. Through internal audit reviews, the Club tests whether policies are being applied consistently, whether monitoring and escalation processes are working as intended, and whether control weaknesses are being identified and remediated. This independent scrutiny is important because AML effectiveness depends not only on having strong controls on paper, but on demonstrating that those controls operate reliably in practice and continue to evolve as the threat environment changes.
The Club's structural position provides some genuine advantages in this work. The absence of third-party agents means a direct relationship with every customer. The ability to exit and bar suspicious actors swiftly is a meaningful deterrent. And the single, integrated view of all customer betting across platforms creates a behavioural baseline; essential for identifying anomalies at scale.
Looking ahead
The future of the Club's AML work will be shaped by emerging technology and an evolving risk environment. Transaction monitoring is set to develop further through the application of machine learning and generative AI, enhancing the ability to identify suspicious patterns within large and complex customer populations.
Cryptocurrency remains a monitored but deliberately excluded technology. HKJC has made clear that it will not currently adopt cryptocurrency as a method of payment, reflecting the money laundering, anonymity, and illegal-betting risks that crypto payment integration could introduce into a betting environment. This stance is consistent with the views of the Club who believe that cryptocurrency is an accelerant for illegal betting, particularly because it makes payment easier to illegal betting websites.11
Prediction markets are another AML threat because they can enable high-volume, real-money wagering on event outcomes through platforms that may sit outside established gambling controls. Globally, they remain contentious because most jurisdictions outside the United States tend to view real-money event contracts as betting products, bringing them within the scrutiny of gambling regulators rather than treating them simply as financial instruments. Hong Kong has not yet made a formal statutory classification of prediction markets, but the policy direction is already clear: the Home and Youth Affairs Bureau has warned that sports betting through prediction market platforms would constitute illegal betting.
More broadly, the evolution of betting systems will see faster payments, mobile-first account access, multiple stored-value channels, and increasingly seamless cross-platform movement of funds, all of which can reduce friction for legitimate customers, but also compress the time available to detect suspicious activity and create more points at which value may enter, move through, or leave the betting ecosystem. For the Club, the challenge will be to preserve the benefits of digital innovation while ensuring that speed and convenience do not weaken customer visibility, source-of-funds understanding, or the ability to intervene before suspicious value is withdrawn.
Geopolitics will also continue to shape the Club’s AML obligations in practical ways. Sanctions regimes are becoming more complex and more responsive to political change, while illicit finance networks increasingly exploit cross-border payment routes, offshore betting operators, and nominee or proxy arrangements to disguise ownership and control. Although the Club does not operate like a bank, it sits within a high-value, international betting environment and must therefore remain alert to customers, counterparties, or betting patterns that may create sanctions, corruption, or money laundering exposure. Hong Kong's multiple regulatory bodies already work in coordination, and strengthening public-private information sharing will remain central to ensuring that the Club can respond quickly as these risks evolve.
For those who work in financial crime in a betting context, the purpose runs deeper than regulatory compliance. It is about protecting a model that genuinely serves society – and ensuring that the Club's ability to do so is never compromised.
Lucy Mullens is Executive Manager, Financial Crime Risk & Investigations at The Hong Kong Jockey Club. The views expressed draw on material presented at the joint European Lotteries and World Lottery Association event in May 2026.
1 https://www.elegislation.gov.hk/hk/cap148
7 https://www.info.gov.hk/gia/general/202209/29/P2022092900458.htm
