Hong Kong pauses basketball betting launch due to concerns around impact of prediction markets
The Hong Kong government has put on hold plans to officially allow betting on basketball from September, citing concerns around the rise of prediction markets in the US and their potential spillover effects.
Reports first emerged on Monday evening that the basketball betting policy had been paused and that the government had informed the Hong Kong Jockey Club – which was to become the sole operator allowed to offer basketball betting markets – of the need to first examine the impact of these prediction markets.
This is despite the government having in September 2025 passed the proposal to allow basketball betting, drawing on the successful operating models used for horse racing and football betting – the only other sports that can be bet on in Hong Kong.
It had planned to issue a basketball betting license to the Hong Kong Jockey Club and was planning to launch this September – in time for the 2026/27 NBA season.
A spokesperson for the Home and Youth Affairs Bureau told local media that the rapid development of prediction markets in recent years could introduce significant uncertainty into the gambling market, warning that if basketball betting were introduced right now it could prompt more people to shift to these platforms. The spokesperson stressed that placing bets on sports events via prediction markets in Hong Kong would constitute illegal gambling.
“If basketball betting is launched under the current circumstances, it may lead more members of the public to notice and participate in illegal gambling on prediction markets, indirectly fueling the illegal market,” they said.
The spokesperson added that the government believes it is necessary to conduct a more in-depth study of how these emerging models and platforms operate. Until regulatory conditions and supporting measures are sufficiently developed, the authorities should pause progress on new gambling initiatives, they said.
The decision to pause basketball betting in Hong Kong comes at a time when the legality of prediction markets and how they should be regulated has become a hot topic in the US. While prediction platforms are currently overseen by the Commodity Futures Trading Commission, multiple states – including Nevada, Illinois, Arizona, Connecticut and Massachusetts – are currently involved in legal battles with platforms like Polymarket and Kalshi over claims they constitute unlicensed gambling.
In February, blockchain security auditor CertiK published data showing that, between 2024 and 2025, the volume of trades on prediction markets jumped from US$15.8 billion to US$63.5 billion.
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The Backstory
From green light to sudden pause
Hong Kong’s move to delay the launch of legal basketball betting caps a rapid policy swing from momentum to caution. After advancing a plan modeled on existing football wagering and positioning the Hong Kong Jockey Club as the sole licensee, officials have pressed pause to study whether fast-growing prediction markets could undercut enforcement and feed illegal gambling. The reassessment underscores a tension at the heart of the city’s strategy: channeling a sizable underground market into a regulated system while guarding against new, borderless platforms that blur lines between trading and betting.
The Home and Youth Affairs Bureau signaled that prediction markets’ growth could pull bettors away from licensed channels and complicate oversight. That warning collides with months of groundwork to bring basketball wagering online and through the city’s monopoly operator, a push framed as both a revenue measure and a way to blunt illicit bookmakers’ reach.
Budget math and a legal pathway
The policy drive began as a fiscal and regulatory play. In early 2024, Financial Secretary Paul Chan Mo-po floated legal online basketball betting as a tool to help narrow a roughly HK$100 billion deficit and redirect activity from the black market. The idea quickly took shape through public discussion and industry signaling. The Jockey Club, as Hong Kong’s exclusive sports betting provider, publicly backed the approach and said it would file a proposal to regulate the product, citing social harms tied to illegal wagering and the scale of unlicensed activity. In its statement of support for the government’s 2025–26 budget, the club argued that a legal channel could reduce loan-shark debt and underage betting associated with the underground market while boosting public coffers. That support followed reports that illegal basketball betting generated HK$70 billion to HK$90 billion annually. See: Hong Kong Jockey Club supports bid to legalize online basketball betting.
Officials also began quietly calibrating the tax and licensing structure. A government paper to lawmakers proposed applying the same 50% duty on operators’ net profits used for soccer betting, framing it as a like-for-like extension of an established regime and a path to divert demand from illegal books. The plan envisioned the Secretary for Home and Youth Affairs holding licensing authority and setting conditions intended to limit gambling harm. Authorities cited Jockey Club figures estimating illegal basketball turnover of up to HK$90 billion last year, reinforcing the case for a regulated outlet. Read: Hong Kong proposes 50% betting duty on basketball wagers.
Public sentiment and the revenue debate
Political backing coalesced alongside signs of public support. In a consultation, more than 94% of respondents favored legalization, according to government disclosures summarized in legislative papers. The framing emphasized pragmatism: create a limited, monitored channel rather than yield the field to illegal operators. That stance mirrored arguments from stakeholders who said a legal product could capture demand already evident on unregulated sites.
The expected fiscal lift sharpened the debate over how to deploy proceeds. A prominent policy group proposed earmarking a large share of basketball betting revenue for community sport, arguing that new income should repair facilities, hire international coaches and attract events. The think tank suggested roughly 40% for venue upgrades and 30% for elite training, positioning the policy as a lever to improve public health and athletic performance. That idea gained traction as estimates circulated that legalization could raise more than HK$2 billion in revenue. For details, see: Hong Kong think tank suggests basketball gambling revenue should fund sports development.
Legislative approval and lingering risks
Momentum culminated in a clear legislative endorsement. Lawmakers voted 77 to two, with two abstentions, to legalize basketball betting and adopt a 50% net profit tax, aligning with the soccer framework enacted in 2003. The law empowered the Home and Youth Affairs chief to grant the Jockey Club a basketball license and set responsible gambling conditions. The government pledged continued education and tougher enforcement against illegal operators.
Opponents warned the policy could normalize gambling and fail to dislodge criminal syndicates, pointing to the mixed record since football wagering was legalized. They argued that enforcement, not expansion, should carry the load. Those criticisms highlighted a core risk: an expanded legal market could still coexist with robust illegal channels if product, pricing or access differences leave gaps for offshore sites. The vote details are in: Hong Kong legalizes basketball betting in majority vote.
Why prediction markets changed the calculus
The latest pause stems from a new competitive and regulatory wrinkle. Prediction markets—often decentralized platforms where users trade contracts tied to outcomes—have scaled quickly, drawing regulatory scrutiny in the United States and elsewhere. Hong Kong officials now worry that launching basketball betting amid that surge could inadvertently spotlight these services and direct local bettors to offshore, unlicensed venues that are harder to police.
The concern is twofold. First, prediction markets can replicate the economic appeal of sportsbook wagers on game outcomes, sometimes with lower friction and a veneer of financial trading. Second, their cross-border nature and crypto rails can complicate jurisdictional enforcement. If a local rollout of basketball betting sparks interest that spills into these platforms, authorities fear it would expand the very illegal market the policy aims to shrink.
That scenario collides with earlier forecasts that legalization could meaningfully capture activity and generate public revenue. Backers had argued that demand was already entrenched—Jockey Club leaders estimated a six-figure cohort betting on basketball illegally—and that a regulated product at a familiar operator could win share. See background: Hong Kong considers legalizing online basketball betting.
What a reset means for operators and bettors
The pause pushes the Jockey Club and policymakers back to design questions that now extend beyond tax rates and licensing powers. Officials must decide whether safeguards—such as product limits, tighter know-your-customer rules or public warnings—can blunt any spillover to offshore prediction venues, and whether the legal offer can be positioned to compete on convenience and trust without stoking demand.
For the operator, the delay postpones a potential new revenue stream and complicates technology, risk and marketing timelines geared to a launch aligned with major league calendars. For the government, it defers expected receipts and adds uncertainty to deficit planning, while elevating the need for coordinated enforcement and public education. For bettors accustomed to offshore or informal channels, the message is clear: until the policy restarts, basketball wagering remains illegal outside the approved framework, and activity on prediction markets will be treated as unlawful gambling.
The path forward likely hinges on whether regulators can articulate a guardrail set that addresses the novel risks of prediction markets without surrendering the broader objective: moving entrenched demand into a supervised system. The policy case that carried legalization—a large illegal base, a tested monopoly model, and earmarked social benefits—remains intact. The test is whether it can withstand a new class of digital competitors that do not play by the same rules. Additional policy submissions and public updates are expected as the bureau completes its review. Until then, the city’s most closely watched betting product is on hold.
