Answer ... (a) Betting (fixed odds/pool and spread)/betting on lotteries
There is no statutory definition of either ‘bet’ or ‘betting’, despite both terms being used in various statutory provisions; and the definition of ‘gambling’ in the Gambling Ordinance includes ‘betting’.
A ‘bet’ is generally the act of risking a sum of money or valued item against someone else’s on the basis of the outcome of an unpredictable event such as a race or game; while ‘betting’ simply is the making of bets.
The lawful types of betting allowed under the Gambling Ordinance are:
- betting authorised under the Betting Duty Ordinance; and
- betting between persons who are not engaging or assisting in bookmaking or holding out that they solicit, receive, negotiate or settle bets by way of trade or business.
Two types of betting are authorised under the Betting Duty Ordinance:
- ‘fixed odds betting’ – that is, betting on the terms that any dividend payable on a bet is fixed at the time when the bet is placed; and
- ‘pari-mutuel betting’ – that is, betting on the terms that any dividend payable on a bet depends on the respective shares of all winning bettors in the total amount of dividends available.
(b) Gaming (house and ring games)
‘Gaming’ is defined in the Gambling Ordinance as “the playing of or at any game for winnings in money or other property whether or not any person playing the game is at risk of losing any money or other property”.
A ‘game’ is defined in the Gambling Ordinance to include:
a game of chance, a game of chance and skill combined and a pretended game of chance or chance and skilled combined and any game whatever in which—
- a bank is kept by one or more of the players exclusively of the others; or
- the chances of the game are not equally favourable to all the players, including among the players, the banker or other person by whom the game is managed or against whom the players stake, play or bet.
(c) Lotteries/scratch cards
A ‘lottery’ is defined in the Gambling Ordinance to include the following, whether promoted, conducted or managed in or outside Hong Kong:
- raffles;
- sweepstakes;
- tse fa;
- hung piu;
- po piu;
- any competition for money or other property success in which involves guessing or estimating the results of future events, or of past events whose results are not generally known, or which does not depend to a substantial degree upon the exercise of skill by the participants; and
- any game, method, device or scheme for distributing or allotting prizes by lot of chance.
Lotteries promoted and conducted by the Government Lotteries Management Committee are regulated by the Government Lotteries Ordinance (Cap 334); the Gambling Ordinance does not apply to such government lotteries. Under the Government Lotteries Ordinance, a ‘lottery’ is defined as any scheme for distributing prizes by lot or chance which is promoted and conducted by the Government Lotteries Management Committee.
The requirements for lotteries are set out in the Reference Guide on the Organisation of Lottery Activities issued by the Home Affairs Department. Among other things, they include a requirement that the funds collected from lottery ticket sales be used for charitable purposes or for purposes which would contribute to the development of the representative government in Hong Kong.
(d) The interface with financial products (if relevant)
According to the Gambling Ordinance and the Securities and Futures Ordinance (Cap 571), the Gambling Ordinance does not apply to:
- ‘contracts for difference’ – defined in the Gambling Ordinance as agreements whose purpose or effect is to obtain a profit or avoid a loss by reference to fluctuations in the value or price of property of any description or in an index or other factor designated for that purpose in the agreement – which are listed on any specified stock exchange or traded on any specified futures exchange; and
- any transaction or activity which is regulated by or under, or which is carried out in compliance with, the Securities and Futures Ordinance, unless the Securities and Futures Commission issues rules to prescribe the class of transactions or activities as a class of transactions or activities to which the Gambling Ordinance will apply, whereupon the Gambling Ordinance will apply accordingly.