Hainan officials block casinos and racetracks

Beijing had previously acceded to the possibility of a lottery industry and real-time sports betting in Hainan, offering an alternative to mainland government-sanctioned lotteries.
Gambling on horses in the mainland was outlawed in 1949.

A modern racecourse in Guangzhou was closed in 2001 after local newspapers exposed the gambling activities taking place there. Another racecourse was opened in Wuhan in 2007 but gaming is restricted to picking two winners from five races. Winners get scratch coupons offering prizes from a few yuan to us$ 585.3.

Hainan Governor Luo Baoming said that while a preferential policy allowed the island more leeway in exploring tourism development, it did not mean that the provincial government could break any laws.

Besides, Hainan's Communist Party chief Wei Liucheng said the process of turning the island into a tropical holiday paradise will begin this year. And he promised that people will be greatly impressed with the changes in just 10 years.

The central government has cited concerns about social problems to account for its prohibition of gambling legalization on the mainland, driving the majority of China's gaming industry underground. Governor Luo Baoming said the island has much to learn from Hong Kong and that he does not think the tax- free shopping will affect the SAR.

He said gambling options, including a sports lottery, will be developed on an experimental basis, adding the island may have legal boundaries that are less strict than the rest of the mainland. However, Luo insists Hainan will not overstep the law.

Provincial leaders treated the issue at a press conference in Beijing this week. There, they said that Hainan is poised to become a top international tourism destination by 2020, complete with gaming options that may include horse racing. That, together with the promise of duty-free shopping for mainlanders, could affect Hong Kong in the long term, they added.

A mainland paper, the Information Times, reported Hainan may be developed as a trial base for gambling options such as casinos and horse racing.

"If entertainment elements are not introduced, something will be missing in Hainan's promoting itself as an international tourist destination," Wang Yongsheng, from the Regional Tourism Development of the Regional Science Association of China told China Securities Journal.

Wang said there are regional precedents for the trial. "Gambling is forbidden in South Korea, but overseas passport holders can gamble at Walker Hill in Seoul; this fits the country's policies and also meets the entertainment needs of overseas visitors," he said.

But Hong Kong may yet have cause for worry. Several travel agencies in Chongqing said they will organize shopping trips to Hainan once the policy, proposed by the State Council, is approved.

"It'll be much more convenient to purchase luxury goods in Hainan than Hong Kong, as the return flight tickets and price of local hotels are cheaper, and tourists don't need to apply for an exit permit in advance or choose international flights," China Travel Service Group general manager Liao Wei told Chongqing Business News.

Peking University urban planning professor Dong Liming said the island is currently underdeveloped and most of the tourists are domestic travelers. "A gambling industry and tax-free service will contribute to the economic growth of the island," he told Global Times.