‘All risks must be controlled,’ John Lee says as he defends basketball betting U-turn

Hong Kong's government has executed a significant policy reversal, putting the legalization of basketball betting on indefinite hold. Chief Executive John Lee Ka-chiu defended the decision, stating the policy was never intended to encourage gambling and that "all risks must be controlled" before moving forward. The primary catalyst for the U-turn is the explosive, unexpected growth of cryptocurrency-based prediction markets, which allow users to trade on future events. Lee revealed these markets have grown by 130% over just two years, a pace that continues to accelerate, creating a new and complex regulatory challenge.

Lee highlighted that a substantial 40% of activity on these prediction market platforms is tied to sports events, a trend he described as "worrying." The convergence of speculative virtual assets, gambling-like mechanics, and sports presents a novel risk to the city's social and financial landscape. The government now plans to conduct a thorough study on the impact of these platforms before considering any further steps on traditional sports betting legalization. This cautious approach underscores Hong Kong's attempt to balance innovation in fintech and virtual assets with stringent risk control, especially in areas adjacent to gambling.