#DoingWellByDoingGood: Winfried Engelbrecht-Bresges, CEO of The Hong Kong Jockey Club, on operating a betting business worth billions as a charity
This year I was fortunate enough to speak at a conference in Hong Kong- Philanthropy for Better Cities- and even more fortunate to become acquainted with an extraordinary man, Winfried Engelbrecht-Bresges. Winfried introduced me to his organization- Hong Kong Jockey Club (HKJC). I had heard a lot about HKJC before my visit, but Winfried’s further introduction left me in awe of their accomplishments. As the CEO of the Club, Winfried has transformed the outlook on a typically taboo industry into a philanthropic powerhouse.
Each year, HKJC supports the community of Hong Kong through generous donations. In 2015 alone, they gave $500 million dollars towards social innovation, charitable projects and contributions to the arts, education and culture of the city among other ventures. If that’s not enough, HKJC is also the largest taxpayer in Hong Kong ! It’s impressive to see such amazing leadership behind these efforts. Thank you, Winfried, for being such a great role model for the business world !
Winfried, you have been the CEO of The Hong Kong Jockey Club (HKJC), widely regarded as a world leader in horse racing, sporting and betting entertainment, since 2007. How and when did you first become interested in the sport?
I’ve always been very active in sport. I love soccer and when I was young I played in the German youth team. But I had to make a choice between soccer and my studies and I decided it was better to complete university. I graduated with a degree in Economics, Finance and Statistics and took a master’s degree. Everyone expected me to follow my father into the insurance business. But then I got the chance to run one of the biggest stud farms in Germany. It was an amazing experience — breeding, training and racing horses — and I was hooked immediately! That led me to become Vice President of the German Breeders’ and Owners’ Association and eventually CEO of the German Jockey Club, responsible for all 21 racecourses in Germany. Eventually, it brought me to Hong Kong, firstly as Executive Director of Racing and since 2007 as CEO. I have to say that the two sides of my background — my time spent in finance and insurance, plus my sporting life in soccer and racing — have really helped me run one of the world’s biggest sporting and charitable organizations.
The Hong Kong Jockey Club Charities Trust ranked seventh in the World Charity Index in 2016 for its charitable contributions of HK$3.9 billion (US$500 million). That is very impressive! How has the Club increased its social impact under your tenure?
To understand our social impact you need to understand the Club’s business model. We are not a typical company pursuing CSR as part of a corporate strategy focused on shareholder value. Rather the Club is, and always has been, not-for-profit, and the focus of our efforts is the betterment of our community. We achieve this through our world-class racing entertainment and responsible sports wagering and lottery services. By providing these services we help protect our community from illegal gambling operators and the associated criminal and social problems, while also channeling the proceeds via tax and charity contributions to benefit society as a whole. In 2015/16 our customers wagered HK$202 billion (US$26 billion), yielding revenue of HK33 billion (US$4.2 billion) from which the Club paid HK$26 billion (US$3.3 billion) in tax payments and charity donations. So you can appreciate both the scale of our operations and also the huge benefit they bring to Hong Kong.
What has enabled us to increase our social impact is the success of this business model. Over the last ten years Hong Kong has become a center of world-class racing and the Club has become a highly customer centric organization. This has enabled us to generate increasing levels of support for our community, almost quadrupling our charity donations and doubling our tax return since I became CEO in 2007. In fact we are the single largest tax payer in Hong Kong.
The Club supported 215 charitable and community projects last year. Can you share with us one project that you’re passionate about?
If I had to choose just one it would be a heritage and arts project. Ten years ago we pledged our support to restore and revitalize Central Police Station, a collection of 16 historic buildings in downtown Hong Kong, some of them dating back to the earliest days of the city. As such they are an incredibly important part of Hong Kong’s history, carrying a lot of memories for Hong Kong people. Our aim is not just to preserve the site but to create a living community and arts space, including a contemporary art gallery and performance area. It has been a very complex project and we have faced engineering challenges. But I think it demonstrates a lot about the Club’s capabilities, which are about much more than simply providing project finance. We’ve worked closely with the community to develop the arts and heritage concept. We’ve brought in award-winning designers and we’ve now set up a company to manage the future heritage and art programs. When the project is finally complete, I think everyone will appreciate that we’ve created a heritage jewel right in the heart of Hong Kong.
The Hong Kong Jockey Club delivers a significantly higher return to the community than any other racing and/or sports betting organization in the world, with about 78% of its revenue given back to society through donations and tax contributions. What advice do you have for corporations and businesses looking to do more?
Perhaps the key point is that it is possible to run a very successful business in a highly competitive environment, and yet also deliver a very substantial social and community return. In fact, it is the Club’s commitment to keep delivering — and growing — its return to the community, which is the main driver behind our business growth. By building the world-class quality of our sport and increasing our connectivity with customers we are ultimately investing in the sustainability of our community.
So I would hope other businesses would look more seriously at the type of not-for-profit business model that the Club operates in Hong Kong. It may not be suitable for all, but as we have shown it is a valid, workable and highly successful way of doing business and delivering social value to the community.
In late September 2016, HKJC organized an inaugural two-day international philanthropy forum — “Philanthropy for Better Cities” — focusing on metropolitan social issues and how philanthropy can help address them. Why the focus on cities specifically?
Two years ago the UN reported that more than half the world’s population — 3.9 billion people — was now living in urban environments. Roughly half of that number are in Asia, which is also home to many of the world’s megacities with more than 10 million people. This growth has been very rapid and has put real pressure on urban communities in terms of healthcare, education, social welfare, environmental management and so on. So we thought it both timely and necessary to bring together experts from Greater China and across the world to discuss these issues. Specifically we wanted to examine the role of philanthropy, which is a growth area in Asia. Through a Foundations Circle session we established a dialogue for philanthropists to share experience and expertise. Going forward we want to continue this dialogue through more conferences and forums.
What is the greatest lesson you’ve learned as a businessman?
Three lessons come to mind. Have a clear vision of what you want. Be decisive about what you do. And last but not least, people are the most important; therefore build a strong team who will translate strategies into actions.
Finally, do you think that by doing good, you’re more successful?
Absolutely, and the Hong Kong Jockey Club is proof of this. Having one simple objective — to work for the betterment of our community — means we have a very clear focus for our planning. It also means we have a lot of support from the community for our business goals. For example, in 2003 the Hong Kong Government introduced a soccer betting service. Many other companies wanted the license, but the Government decided to award it to the Club. They knew that we would be a responsible operator and that we would use any proceeds to benefit Hong Kong. As a result, soccer, together with our world-class racing, has enabled us to more than double wagering turnover to HK$203 billion (US$26 billion). And our total community return in terms of tax and charity support has doubled from HK$12 billion (US$1.6 billion) in 2003 to HK$26 billion (US$3.3 billion) last year.