Inside Hong Kong's Weirdo Mecca of Horse Racing, Happy Valley

Amidst the beer, drugs, and bizarre entertainment options, Hong Kong's Happy Valley Racecourse has emerged as one of the most profitable tracks around.

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Feb 11 2015, 1:45pm

The Michael Jackson impersonator needs a shave. His makeup-encrusted mustache is a little too thick, a hair beyond the wispiness of the late King of Pop's. As for the Madonna look-a-like, well... points for the "Express Yourself" vintage cone-bra, but her face is more Lady Gaga. Not close, but also close enough. Nobody goes to the track expecting celebrity impersonator perfection, anyway.

Focus, instead, on the DJ chopping up Nena's "99 Luftballoons," piggybacking it with the theme from Xanadu and, in a deft in-the-moment pander to the sizable Aussie expat contingent, "Summer Nights." Focus on the assembled drunks flapping their wings for "YMCA." It's ostensibly 80s night, but the dance floor cares no more about top-40 verisimilitude than they do about Not Michael Jackson's mustache. It's Wednesday night in Hong Kong, and seemingly everyone in the ample beer garden is moving beyond tipsy.

Welcome to Happy Valley Racecourse. Eight runs. Refillable jugs of Tsingtao, served in plastic lidded pitchers, cost the equivalent of $19. Post time is 7:15. Don't be late. Or do. Cheapest admission is for standing room on the rail, $1.30, but it's waived after the fourth race. That's when things really get jumping.

"Happy Valley, that's where everybody goes, locals, diehard gamblers, expats, tourists, everyone," says Lenny Tjoe, a 30-year-old Australian (and former world-class badminton player) who lives near the track. "If you want to get drunk on a Wednesday, this is the place to be."

Horse racing is to Hong Kong as college basketball is to Kentucky, cricket is to India, and table tennis is to mainland China. It's the national pastime, but for real, not like baseball in the United States. Let Matt Hegarty, industry reporter for the Daily Racing Form, explain through the lens of American myopia:

"The average handle for one race card in Hong Kong typically exceeds the handle for every other race card in the U.S. other than the Kentucky Derby. The handle for the 2014 13-race Derby card at Churchill was $180.5 million; the handle for the 13-race card at Belmont for the 2014 Belmont Stakes last year, in which a Triple Crown was on the line, was $150.3 million, a record that was nearly $40 million higher than any other Belmont card in history."

On January 14, the night I visited Happy Valley, the "turnover" (local parlance for the handle) was $148.7 million. Joseph Yip, assistant public affairs manager for the Hong Kong Jockey Club, described this random winter Wednesday, which felt like the Belmont Stakes on Triple Crown Saturday, as "average."

On July 6, at Hong Kong's other track, Sha Tin, the turnover was $229 million, biggest take of the year, even it wasn't the largest in-house audience. The biggest 2014 gate came on Chinese New Year, when 92,000 packed Sha Tin, a bigger crowd than the one that witnessed this year's Super Bowl in person.

Even a semi-devout American horseracing fan will be gobsmacked by these numbers. I don't go religiously, myself, but I make it out to the local New York City tracks a couple of times per year. Stakes-day notwithstanding, Belmont is fine, if bland; it does have a jungle gym, face-painting, clowns, and games for kids on weekends, something not on offer at Hong Kong's exclusively 18-and-over tracks. The Meadowlands, its past status as a Hong Kongese gambling hotspot aside, offers exactly as much excitement as one would expect from a venue located in a New Jersey parking lot. Aqueduct is, at this point, the world's largest outdoor methadone clinic. Saratoga really is special, but it's only a six-week season, and the take rarely exceeds $20 million.

This isn't yet another elegy for the sport of kings, I am not anywhere near aficionado enough to make that claim, and besides, I think it might be at least somewhat horseshit. What I do know is that in three decades of visiting tracks around the country, I never experienced anything like Happy Valley. The Belmont Stakes and the Breeders' Cup bring in the crowds, but they also exist in the branded shadow of that American IMPORTANT BIG EVENT thing, which invariably takes away from a simple good time. Hong Kong is different. That was all I knew about it, and why I wanted to know more.

"My Americans know all about horse racing in Hong Kong," says Happy Valley executive director Bill Nader, who spent years working for the New York Racing Association. "But I guess my Americans are all horse people."

I put this basic question to a number people at the track: What is it about Hong Kong and horse racing? Like everything in life outside of win, place, and show, there is no definitive answer. There are many non-definitive ones, though. They run eight a pop at Happy Valley, so in clip-cloppity synchronicity: Sound the trumpet. Load the chute. And we're off.

1.) Games of Chance, Current Nature of: "Chinese people love to gamble, plain and simple," Yip told me as we sat down to curry, dim sum, a bottle of San Miguel, the (anachronistically-named) Hong Kongese beer, and the fifth race. From our perch high above the track, watching the animated railbirds among the 16-20,000 in attendance—they don't keep track of late-arriving freeloaders—it was easy to believe him. The numbers back it up. A 2013 Global Gaming report shows the annual per capita gambling amount at $500 in Hong Kong, crushing the $396 in the United States.

2.) Games of Chance, Historical Nature of: The role of numbers, fortune, and luck is deeply ingrained in Chinese culture. As Rickesh Kishnani, CEO of Platinum-Wines.com, explained it when I asked if it was worth visiting the Macau casinos, "Not if you want to have a good time. It's not like Las Vegas. Nobody's drinking or talking shit, it's just unsmiling men playing baccarat to change their lives. It's not for fun."

It's a stereotype that can be taken too far, but gambling isn't simply a form of (somewhat) illicit entertainment in this part of the world. "Like westerners, Asian horse players believe that through research, strategy, insight, and mental sharpness, you will get the desired result," says Professor Chung-Ying Cheng of the University of Hawaii at Manoa, one of the leading Chinese philosophy scholars in the United States. "Where there is a difference is the belief that the skills have come from providence. That you're blessed, and that although you're not in charge of the outcome, fortune combines with your character to present opportunities. Luck is something you encounter with equal chance of success and failure. It's an ancient idea, so why not try your luck?"

So, pro tip: if you're planning on throwing down some cash at Happy Valley, know that the number four is unlucky. It's an old superstition, as the word for four sounds like the word for death. Tradition, however, only goes so far. "If Chinese people think four horse going to win, they bet on it," says Yip.

3.) Hong Kong Jockey Club, Today: Imagine if the NFL itself owned the teams, stadiums, players, broadcast rights, all of the television networks, food and beverage, and every legal wager placed on every game. It isn't horse-apples-to-apples, but that generally describes the Hong Kong Jockey Club. If you will please, Mr. Hegarty:

"The entire racing industry is controlled top-to-bottom by the non-profit HKJC, which owns and operates the two racetracks and the province's betting distribution system (account wagering, OTBs, video production). It limits the number of horses that are allowed into the province, and is responsible for all regulation of racing, including the enforcement of its rules and its drug-testing program. It's highly structured, resulting in a company that can operate in an environment where it sets all the rules and prices. It helps that all those revenues in Hong Kong allow the Jockey Club to reinvest in its product and consistently adopt cutting-edge technologies."

In the United States, numerous companies compete for market share, with different regulations run by various state racing commissions. Money flows every which way, but it doesn't benefit the sport so much as it does the powerful figures within it.

In the case of HKJC, nonprofit-ism blows capitalism out of the water. In 2014, the Hong Kong Jockey Club's total turnover was $13.4 billion, of which $2.5 billion went to taxes and duties, an amount that is eight percent of all tax collected by the Inland Revenue Department. Charitable donations were $464 million, which makes the HKJC the 15h largest charity in the world. They fund all kinds of things in Hong Kong: parks, medical centers, equestrian teams, elder care, hospice care, bereavement care, a museum of climate change, an arts festival for the disabled, the restoration of a historic police station, and a drama project called "FAMILY: A Jockey Club Initiative for a Harmonious Society." A healthy 168 charitable projects in all. It's a massive organization, but one that seems beloved in a way corporations and governments can never be.

"We give so much back to Hong Kong, we've never had problems," says Pako Ip, the Happy Valley track manager. To which Yip chimes in, "When people lose, they say it's fine because it's for charity." And then he laughs at a joke he's told a thousand times.

4.) Happy Valley Jockey Club, Yesterday: 2015 marks the 130th anniversary of the Hong Kong Jockey Club. There's even a tepid rock song, "Progressing Together," to mark the occasion. The history runs deep.

"Wherever the British go, racing follows," says Ip, but the sport's colonialist roots are long forgotten. It's been nearly two decades since the handover from Great Britain to China, and while the ponies remain steeped in English tradition, 21st-century racing is as mixed-up as the beats at Bo's Music Zone in Happy Valley.

"It feels more like England than Hong Kong," says Gemma Bone, an arts student who grew up in the region but returned to the UK, and who was at the track for the first time. "Although it's way more fun and casual here than back home at Ascot." To Bone's point, it's hard picturing the Brits hosting "Magic in the Valley" night with a roving band of illusionists, card sharps, and a four-star "disappearing girl" act.

5.) Happy Valley Jockey Club, Tomorrow: Horse racing has long been emperor in Hong Kong, and the sport doesn't run the risk of becoming trapped in a claustrophobic niche as it has in the United States. Still, things fluctuate. As of late, the Hong Kong Jockey Club is on a roll. 2013-14 turnover was up 11 percent over the previous year, and Nader projects another increase this year. "It was down when I got here in 2007, but now every year is record-breaking," he says. "I had a lot of good years working for the NYRA, but here, it's heaven. If I could trade it for another life, I wouldn't."

To increase revenue going forward, the HKJC has recently made two key moves. Last year, Nader introduced commingling, which is basically a way to pool global bets in the pari-mutuel system regardless of varying taxes, deductions, currencies, etc. More succinctly, there's more cash in the kitty if rubes can wager from Churchill Downs. Also, a little more than a decade ago, the HKJC opened up authorized soccer betting. The footie handle has grown right alongside the world's interest. Last year's turnover was up 23 percent to $8 billion. This is an important increasing revenue stream that wouldn't have been possible during actual '80s nights.

"For a long time, horse racing had little competition. It's only recently people in Hong Kong can even watch soccer from around the world," says Larry Yeung, the HKJC media communications manager. To which Ip added gravely, "We never underestimate the threats from other forms of entertainment."

6.) Supply, Demand. Demand, Supply: The Hong Kong Jockey Club holds 83 race cards a year. Eight go off at Happy Valley, 10 at Sha Tin. Happy Valley gets the Oktoberfest soirees and Chinese hip-hop. Sha Tin gets the Group 1 horses, the best of the breed, none of which—naturally or ironically or both—are bred in Hong Kong.

That's 740 Hong Kong races. In the U.S., the slate runs to more than 45,000 a year. But the majority of which will see fewer patrons than the Happy Valley McDonald's—the only thing the HKJC doesn't control, incidentally—on race night. Once again, Hegarty:

"In the U.S., supply easily outstrips demand. This is in large part because many tracks that would have closed years, if not decades ago, continue operating because in many states, legislators tied casino licenses to racing licenses. As a result, these tracks use statutorily mandated subsidies from their casinos for their racing operations, even if these subsidies flow entirely to horses owners, trainers, and breeders in the form of purse payments and breeding incentives, and not to things that might help the handle, like a reduction in the takeout or capital expenditures into the racing facilities. At some tracks, handle on the races provides less than one-tenth of the money for the purse account. As a result of this oversupply of races, field size—the average number of horses in a race—continues to drop, leading to unattractive betting races."

The unfree market has decided. Twice a week: gangbusters. 865 a week: something less than gangbusters, definitely. It isn't just the number of cards either. At Happy Valley, each race caps out at 12 horses (with a max of 14 at Sha Tin) which from this layman's perspective, offered cleaner sightlines and made it easier to follow the on-turf action.

The result is riveting. The ponies call some of those who are primarily there to get loose to the betting windows. "It seems like a lot of locals come for the gambling, but we mostly came for the atmosphere," says Tamsin Croot, on her first trip to Hong Kong with Gemma Bone and Lydia Gunning before heading off to be a Bollywood dancer. "I'm placing bets, even though I have no idea what I'm doing."

7.) It's the Yuan, Stupid: Hong Kong is a world financial capital, currently third in the Global Financial Centres Index. And as a stand-alone sovereignty, its per capita GDP is in the top 15, roughly equal to the United States. However, Hong Kong is beholden to China in what is becoming an increasingly fraught relationship. The central government tightens its authority, while Occupy Central protests the very same. There is the sense of things long-bottled coming to a head.

Yet, the money keeps on flowing. "You can easily pick out the Mainlanders," says Tjoe. "They fly over with huge empty suitcases and fill them with luxury crap. They want stuff from Hong Kong because the goods are considered legit." (This has led to much handwringing over travel manners, to the point where I was assured in multiple Asian countries that Americans are no longer considered the worst.)

The Chinese economy has cooled off somewhat from its annual 10 percent growth of recent years—the economy's 7.4% growth in 2014 was the slowest in 24 years—but the country still created 40,000 new millionaires in 2013 and is home to 358 billionaires, second only to America. Those piles of Yuan have to be parked, and bet, somewhere.

Coincidentally, or not, the Hong Kong Jockey Club opened its fourth clubhouse—the first outside of Hong Kong—in the well-heeled Wangfujing neighborhood of Beijing, back in 2008. It's a smart play considering that a "Type A" corporate membership requires not only two sponsors, but also $140,000 down for the admission fee, and $720 a month in dues. Type A types do get great seats at the tracks, and the HKJC has 300 chefs available to serve anything anyone might want: a fried oyster omelette; Cantonese staples; roasted suckling pig; a steak dinner. The last bit seems totally worth it, diplomatic and cultural tensions be damned.

8.) Party All the Time: Hong Kong is one of the world's playgrounds for the young, upwardly mobile, rich-to-filthy-rich, and with them come the late-night spoils. "I lived in New York City for years and it's not even close to here," says Kishnani. "This is the place that never sleeps. I can take you to the best noodle joint and it doesn't even open until 3am."

Luckily for those in 24 Hour Party People mode, performance-enhancers are easy to find. As an anonymous Australian woman put it to me, "Hong Kong is swimming in cocaine." It came up more than once in my time there, even with a square middle-age mope like myself.

If the wakey-wakey narcotics help explain some of the late night buzz, Happy Valley's status as a place to be for both locals and tourists on any given hump day is ultimately about what it is, and where it is.

"People here go out every day of the week, and this is what you do on Wednesday nights," says Lydia Gunning, an English-born English teacher living in Hong Kong. "It's more than that though. Happy Valley is something you have to do now, isn't it? You check it off the list just like the tram up to Victoria Peak."

There are any number of ways to get to Happy Valley: taxi, subway, local bus, tour bus, Star Ferry. You can also get there as I did, via the 110-year old double-decker trams known as the "ding ding" by locals. The ding ding moves slow, but sitting up top as it putters down Des Voeux Road West offers a glimpse into the Hong Kong of times gone by, even while passing the various station stops of our current gilded age: Rolex, Dolce and Gabbana, Hermes, the Bank of China.

The tram moves beyond the money, nodding to Wan Chai, the most popular red light district. It's really more cheesy than seedy, a "dangerous" place for hopped-up hedge fund types and bloated farty Aussies to get rubbed-and-tugged. The tram chugs along past an unending number of tiny local stores and restaurants, small-time shopkeeps trying to keep pace in Hong Kong's go-go economy flush with Go-Go bars.

In time, though, you get to Happy Valley. The tram took longer than expected, which meant I failed in my fatherly duty. In true pre-K fashion, my daughter instructed me to bet the first horse in the first race to come in first—that would have been Namjong Turbo being ridden by KC Leung—but I didn't make the 7:15 post. I bet the kid's birthday trifecta in the fifth—China Delight, Strathtay, and Endorsing, in order—but only the last horse came in.

I threw a bit of scratch on another race, but I don't even remember which one, or what horse won. I was too intoxicated by the experience—also: by Tsingtao—to do the thing where I pretend to read the racing form in some official manner. Or to try my luck. To test my providence. To lay some wood on a winner, blissfully unaware that 2015 is considered a fortunate one for those of us born in a Year of the Pig. Had I only known to trifecta my lucky oinking numbers, 2-5-8. I didn't know. I was far from home. I don't believe in fate.

I found my way all the same, albeit in a more equine fashion. Hong Kong is a vertical city, the skyline of Manhattan planted on the hills of San Francisco. Everything is up; There are few human-scale blocks. Happy Valley itself is surrounded by residential skyscrapers. The oval is both oasis and mirage. The Bermuda grass grows lushly in the tropical climate. It's a deluxe carnival with a science fiction aspect.

Before the bell rings, the music is turned down, the strobe lights are shuttered, and the festivities put on pause as fans move to the rails in unison. This is the moment when it all clicks and everyone is there for the same reason. There are numerous factors that make Hong Kong racing unique and successful, but none greater than the majestic creatures that run the races.

For the seventh race, I found an empty corner of the stands, closed my eyes and listened to the thundering of thoroughbreds coming down the backstretch. I opened my eyes as the roar went up for the eye-popping light-blue-and-yellow silks of Supreme Falcon as he took the chip. I exhaled.

Then, the DJ dropped "Thriller," the taps resumed flowing, and the overly-mustachioed MJ and the Material Gwen Stefani posed for pictures. I was back in Hong Kong on a Wednesday night. I was back in Happy Valley.