As reported by: Knight Ridder Newspapers
At the Beijing Jockey Club, you can wager a good sum on a horse race. Just don't call it betting. China's Communist government forbids gambling, believing it smacks of bourgeois sin and decadence.

Government officials, however, allow fans to "guess" on the outcome of horse races.

Fans who "guess" which horses will win weekend races are engaged in a game of skill, the official logic goes. When they put money on their guesses, they're allowed to pocket their winnings.

For all practical purposes, it's similar to the wagering that's made horse racing big business around the world, and the owners of the Beijing Jockey Club are betting that China may soon permit racing - and off-track betting - on a grand scale. Indeed, development of the track may be a bellwether for the future of legalized betting in China, where citizens have long had a passion for Lady Luck.

"For a short time, they won't use the word 'gambling,'" said Li Jingguang, an advertising executive who stood at the edge of the greensward for a recent race. "Instead, we will put it in a way which is understood by the Chinese."

One of those betting big on horse racing in China is Y.P. Cheng, a Hong Kong toy tycoon who's spent more than $50 million to make the Beijing Jockey Club a state-of-the-art track.

"Basically, the idea was to set up a whole racing industry in China, starting from scratch," said Kevin Connolly, an Irishman who's the chief trainer at the club.

The facility, in eastern Beijing's outlying Tongzhou District, sprawls over 1,000 acres and includes two turf tracks, a sand track, five huge stables, a stallion complex, paddocks and private viewing rooms with closed-circuit television.

Work may begin this summer on a 40,000-seat grandstand. Local television covers weekend races live, and crowds have grown steadily since the club opened in 2001.

Connolly oversees an ambitious breeding program, and the club will soon begin selling and leasing horses to private owners.

"We've taken 13 charters from Australia full of horses," said Connolly.

The club now has 950 thoroughbreds and 700 mares, he said. It's brought in jockeys and trainers from Australia, South Africa, Italy, France and Hong Kong.

The dream is to turn the Beijing Jockey Club into a premier racecourse that may rival tracks in Hong Kong and Macao, which returned to Chinese rule in 1997 and 1999 respectively. Promoters foresee a major racing circuit in China.

But hurdles remain. When Beijing opened the door to games of chance, problems emerged. Police said last week that a private contractor had confessed to manipulating a $2 million sports lottery in the city of Xian.

Gambling and lotteries have a long history in China. Historians say a form of lottery may have been used under the Tang Dynasty (A.D. 618-907) to help finance the construction of the Great Wall.

The 1949 Communist revolution banned all forms of gambling and saw the end of horse racing in China.

Over the past two decades, though, free-market reforms have raised living standards of millions of Chinese, and small-scale gambling has crept back. Authorities usually turn a blind eye.

"We never play mah-jongg without betting money," said Li, referring to the four-person game played with tiles that's popular throughout China.

Wu Hua, a retired sports journalist, said he isn't surprised at the growing popularity of the track, given the growth of China's economy over the past two decades.

"Twenty years ago, people were just interested in getting enough to eat. Now, they have time. They have money," said Wu, whose company publishes a sports magazine.

Today, experts estimate underground sports bookmaking in China at $1 billion a day, and authorities view with interest the possible tax windfall of some legalized betting. In Hong Kong, the Jockey Club is the former British colony's biggest taxpayer.

For horse racing to become financially successful, promoters said, the government would need to permit off-track betting parlors around China. While the government has given no public indication that such a move is in the offing, some investors appear to consider it inevitable.

Racetracks are being developed in the southern Chinese cities of Wuhan, Guangzhou and Nanjing.

At Beijing's track, an average of 2,000 fans come each weekend day to view as many as eight race cards. Purses frequently hit $24,000, but several times a year they rise 10 times higher.

For the time being, the Beijing Jockey Club operates under peculiar rules that permit the authorities to deny that there's gambling going on there.

To buy a race card, you must be a Jockey Club member. Membership is free.

"Just go to the window, show an ID, sign up," Connolly said.

To guess on a race, a member must buy a voucher for of $12 to $120. Members can buy as many vouchers as they want. Horses carry odds, depending on the total amount wagered.

"These are the same betting vouchers they use in Hong Kong and Macao," Connolly said. "If you win, it credits a number of points to your voucher. At the end of the day, you go and cash it in."

Connolly said the club's backers know the authorities are watching them.

"We're legal. We're a licensed race track," he said. "We're being used as a test case."