14 Feb 2006

Replies from DPM/Minister for Home Affairs Wong Kan Seng to MPs' queries on the Casino Control Bill, 14 February 2006

Sir, I thank the Members for their questions and comments.

2. Several members commented that the Bill, though comprehensive, did not provide the details on many operational issues such as what is the allowable maximum number of jackpot machines, anti-money laundering measures, advertisement policies, and how the CRA will go about performing its role.

3. It is not practical to state every detail in a piece of legislation, although the important provisions reflecting the policies are incorporated in the Bill. The Bill is already more than 150 pages. If all the operational details are included in the main Act, it will be voluminous or it will look like a Police manual. Even then, there is no certainty that every conceivable measure is reflected in this first attempt on the Bill. The Bill defines a general legislative framework and deals with the broad policy issues like all our other legislations in Singapore. The operational details will be covered separately in the subsidiary legislation which will be promulgated by the CRA in due course. They can also be specified as licensing conditions or as directives from the CRA. This is also the practice in other jurisdictions, and our other laws.

4. Sir, the questions raised by Members broadly cover three areas: social safeguards, casino operations and finally casino taxes and funding for the Casino Regulatory Authority and the National Council on Problem Gambling.

5. Firstly, let me now respond to questions related to social safeguards, as raised by Ms Indranee Rajah, Mr Sin Boon Ann, Mdm Ho Geok Choo, Professor Ong Soh Khim, Mr Ahmad Khalis, Dr Lily Neo, Dr Amy Khor, Mr Ong Kian Min, Mr Low Thia Khiang, and Ms Eunice Olsen.

Social Safeguards

6. Members will recall that last year in this House, we debated at length the issue of social safeguards to minimize the negative impact of casino gaming on locals. While we need to have these social safeguards, the measures must also be practical and not too onerous for the casino operators to implement.

7. For example, Singapore citizens and permanent residents will have to pay the entry levy of $100 for every 24 hours or $2,000 for annual membership. The annual membership is not transferable. We will not allow the casino operators to directly or indirectly reimburse the entry levy to the patrons. This means that the moment a citizen or permanent citizen walks into the casino for a look-see, he has already parted with $100. He will have to think very hard about going in. Some Singaporeans suggested doing away with the entry levy. Others have suggested raising it. There are no right answers. Some MPs also suggested fixing the number of times a member can visit the casino. I think we should not every micromanage every measure. There will be no end to the number of ways to stop people from visiting the IR. What we have done is to put some barriers so that Singaporeans can pause and think whether to cross it. We settled for $100 per entry and $2,000 for the annual membership for ten years, rather than chop and change and cause uncertainty to patrons and investors. Specific details as to what constitutes reimbursement will be worked out later between the CRA and the casino operator.

8. Mr Low Thia Khiang has asked why the entry levy collected is channeled to the Singapore Totalisator Board and not to the National Council on Problem Gambling. A mandate for the Singapore Totalisator Board is to disburse gambling related monies for public, social and charitable cases. They will be best placed to decide how to use the entry levy. Mr Low can be assured that the Government will provide sufficient funding to the National Council on Problem Gambling for its operations.

9. The casino operators will be required to put in place a robust system to ensure that excluded persons and minors are not allowed into the casinos. They are allowed to implement any system so long as it achieves this objective. As part of their submissions for the Integrated Resorts, the investors will be required to propose how they intend to enforce the various social safeguards.

10. Ms Indranee Rajah and Professor Ong Soh Khim have asked about the treatment of minors under the Casino Control Bill. The Bill prohibits persons who are below the age of 21 years old from entering the casino. The patron will be required to provide an acceptable proof of age before he or she is allowed entry. What would constitute an acceptable proof will be covered in the subsidiary legislation

11. Section 133 of the Bill provides a defence for the casino operator to disciplinary action if a minor is above 16 years or older and has produced false evidence that he is not a minor. Minors who are found in a casino or have used the false evidence to gain entry into the casino will be guilty of an offence. These are not seizable offences. The casino operator will be required to inform CRA of any minors found on the casino premises and they are allowed to remove the minor using no more force than is necessary.

12. Mr Sin Boon Ann has suggested lowering the age limit from 21 to 18 years. In Hong Kong and Australia, studies show that the rate of problem gambling among the youths tends to be higher than adults. This shows that youths are more vulnerable to problem gambling. As compared to other forms of legalized gambling like those conducted by Singapore Pools that are currently available in Singapore, casino gaming involves table games and more sophisticated jackpot machines, which are characterized by rapid play, high re-staking rates and instant gratification. This is what some researchers call “hard gambling” as compared to “soft gambling”, like TOTO, where after each draw, a person would have to wait a few days for the next draw, thereby creating a break for the punter. Taking all these into account, it would therefore be prudent to set a higher minimum age of 21 years for casino gambling to protect our young.

13. Prohibiting automated teller machines or ATMs in the casinos aims to create a break for patrons who have run out of cash by making them step out of the casinos. Hopefully this will make them think about whether they should continue gambling. While Mr Ong Kian Min and Professor Ong Soh Khim are correct in pointing out that the ATMs can be placed immediately outside the casinos, it would not be practical to prohibit ATMs outside the casinos since there are other facilities and services within the Integrated Resorts, such as retail shops and restaurants, which are not gaming related. Besides, how far to place the ATM is far enough?

14. Dr Lily Neo has suggested having separate sections within the casinos for locals and foreigners so that we can be stricter on locals by imposing further controls, such as shorter opening hours. In effect, such controls would mean creating 2 casino gaming floors. Ms Eunice Olsen has also suggested mandating a loss limit for patrons and to require the casino operator to provide responsible gambling counseling services. These suggestions will cause operational and enforcement difficulties. All these good intentioned suggestions also hamper the casinos’ ability to manage their businesses effectively and make our casinos different from others. Instead, our approach would be to work with the casino operators to strike a balance between meeting our regulatory objectives and implementability, and at the same time, have regard to some of the social problems which may be created.

15. Professor Ong Soh Khim has suggested that the casino operators provide prominently time displays to ensure that patrons do not lose track of time. She has also suggested that information about the games and responsible gaming should be made available to patrons in 4 languages. These measures to promote responsible gaming may be considered later when CRA works with the casino operators on the details of the casino layout and operations.

16. As with all Government policies, we will monitor and review the various safeguards to ensure that they remain relevant and effective.

National Council on Problem Gambling

17. I agree with Mr Ong Kian Min and Mr Sin Boon Ann that having measures alone are not enough. We also need to educate the general public about the dangers of problem gambling and how to recognize the symptoms. This is what the National Council on Problem Gambling hopes to do.

18. Mr Ahmad Khalis, Mr Sin Boon Ann, Professor Ong Soh Khim, and Dr Lily Neo have asked about the role of the Council and its programmes. The Council will serve to:

  1. provide independent advice and feedback to the Government on education programmes to promote public awareness on problem gambling;
  2. decide on funding applications for preventive and rehabilitate programmes; and
  3. assess and advise the Government on the effectiveness of treatment, counseling and rehabilitative programmes.

19. The Government will fund the initiatives undertaken by the National Council on Problem Gambling, which deals with problem gambling holistically, and not just in relation to the casinos.

20. The Council has started working on initiatives to help problem gamblers. For instance, it has set up a website containing information on problem gambling as well as help services available to problem gamblers and their families. To raise public awareness, the Council has funded television programmes featuring real life cases of problem gambling. It has also made funding available to voluntary welfare organizations to organize public education initiatives in the community. The Council will continue to evaluate the response to its current programmes and determine what more needs to be done.

21. The Council will be empowered to issue exclusion orders against problem gamblers. Families of problem gamblers can apply to the Council for such exclusion orders. In response to Mr Ong Kian Min’s question, parents of foreign students studying in Singapore can also apply to the Council for exclusion orders to prohibit their children from entering the casinos. Mr Ahmad Khalis and Dr Lily Neo have suggested allowing our Courts, co-workers, healthcare workers to apply directly to the Council to exclude their clients who are problem gamblers. As exclusion orders curb a person’s freedom of movements, such orders should not be made lightly. This is why we have limited the parties who can apply directly to the Council for exclusion orders and the Council has to give the respondents a fair hearing. As for the suggestion to exclude bankrupts, Section 165 of the Bill has empowered the NCPG to exclude them from the casinos.

22. MCYS has set up a database to capture all social assistance beneficiaries supported by government funding. This database can be tapped on to check who should be excluded from the casinos, as suggested by Ms Eunice Olsen.

23. We have also considered the possibility that the family exclusion order could create domestic disputes. As such, the Council intends to work with social workers to help counsel families that apply for exclusion orders. This would allow social workers to intervene and provide assistance to families should there be a need. In addition, the Council will work with the Courts and social workers on a system of referral protocols for family members to obtain Personal Protection Orders if there is a need to do so.

24. The Council will consult families, social service, religious and communities sectors to ensure that the processes for applying for family exclusion orders are simple and effective. With regard to Professor Ong’s point about the voluntary exclusion orders, the patrons can also apply to the National Council on Problem Gambling for voluntary exclusion orders.

25. It is not possible at this early stage to define more clearly what the Council will do or how it intends to conduct its proceedings. There is also no need to enshrine the functions of the Council in the Bill. Unlike the exclusion orders that the Council can issue, the initiatives and programmes of the Council do not do not impact on personal freedom. Since the Council is set up under MCYS specifically for the purposes of tackling problem gambling, Members can be assured that the Council members will perform their role pooling their collective wisdom and experience.

26. But we must also be realistic about the extent to which we can prevent a person from gambling and become a problem gambler. If a person is bent on gambling, no measure will deter him. If he cannot gamble in Singapore, all he needs to do is to take a ferry to Batam, or go to Genting or go on a cruise. No government, NGO or social do-gooder can stop him. Ultimately, the responsibility is his, and the consequence is for him to bear. The unfortunate part is that his irresponsible behaviour will affect his family.

Advertising

27. Mr Ong Kian Min and Dr Lily Neo have asked about casino related TV programmes and promotional flyers. The Media Development Authority’s TV and Radio codes do not allow programmes promoting or offering instruction on gambling to be aired our TV and radio networks. On the issue of promotional flyers, the casino operators will be allowed to conduct direct marketing only to non-Singapore residents and registered casino patrons who have paid the $2,000 annual casino levy. We will work with the casino operators to see how excluded persons do not receive such promotional flyers.

Casino Operations

28. Let me now address questions raised by Ms Indranee Rajah, Mr Ahmad Khalis, Mr Sin Boon Ann, Professor Ong Soh Khim, Ms Ho Geok Choo, Dr Lily Neo and Mr Ong Kian Min about our policies on the casino operations.

29. Members have cited the figure of 5 % of the total IR area as the total gross floor area for the casino and raised questions on who will decide whether to allow further expansion and how this will be determined. The answers to these questions are found in the official Request For Proposal (RFP) document for the Marina Bayfront Integrated Resorts that was launched on 15 Nov last year. However, as Members are not likely to be potential bidders for the Integrated Resorts, I can understand why they may not have read the RFP.

30. The RFP document set out clearly the maximum gaming area of 15,000 sqm within each Integrated Resort. If we compare this to the maximum permissible gross floor area of 570,000 at the Marina Bayfront site, it is a very small component, barely 3%, of the entire development. This is consistent with our intention to develop Integrated Resorts, albeit with a small component of casino gambling, to support our tourism and economic objectives. The size of casino is also similar to that of many well known casinos overseas. We decided to fix the maximum gaming area in square meters instead of a percentage of the gross floor area to provide clarity and certainty on what is allowable maximum gaming area. We will work with the casino operators to ensure that visitors will be able to move freely within the non-gaming facilities in the Integrated Resorts without having to go through the casinos.

31. The casino operator may also need to adjust the location of the gaming areas within the Integrated Resort for business reasons. We can allow the casinos to do so, as long as they keep within the 15,000 sqm limit for the gaming area, subject to other planning considerations. This is the intent behind Section 51 of Casino Control Bill. I would like to assure Mr Sin Boon Ann that MHA has no intention of allowing the CRA to administratively increase the 15,000 sqm allowed for each of the casinos. These are not decisions to be taken lightly by the CRA, but by the Executive (ie the Government).

32. With regard to Dr Lily Neo’s suggestion on operating hours, we do not intend stipulate opening hours for the casinos as this will interfere with the casino operators’ ability to run their businesses effectively. During the consultation exercise for the Bill, the investors have also provided feedback that controlling the hours of operation will affect them adversely. The casinos in Las Vegas and Macau which I visited operate 24 hours and 7 days a week. If ours are to be of a comparable international standard, we should not specify fixed opening hours. We will be short-changing ourselves when our nearest competitors do not.

33. For that matter, when we first drafted our Bill, we noted that the Victoria Casino Control Act empowers the regulator to stipulate a number of operational controls on the casino operator, such as the maximum and minimum number of games, detailed control over the casino layout, and restrictions on the operating hours. We included some of these restrictions because we adapted them from the Victorian Casino Control Act. However, after visiting the jurisdictions elsewhere and learning from the experience of others, we found that these are not universal practices and therefore, may not be necessary. In the final draft which is now before the House, we removed them.

34. This is the background to the context of my statement yesterday that we decided “to relax a number of operational controls on the casino operator". We believe that our supervision and regulation of the casinos will not be compromised by these changes.

35. To deal with problem gamblers within the casino, the casino operators will be required to train their staff to detect and deal with patrons whose behaviour clearly suggests that they are at risk of problem gambling.

36. I agree with Dr Lily Neo that the honesty of the casino staff and patrons would be critical in protecting the integrity of gaming in our casinos. As such, the casino operators shall be required to submit a set of internal controls for CRA’s approval to ensure that our casinos have the necessary controls and measures to guard against scams and fraud. This will include thorough checks on gaming equipment before they are allowed on the casino floor. In addition, the Casino Control Bill will impose heavy fines and imprisonment terms on those who are caught cheating at our casinos. The details, such as the frequency of the equipment checks, will be worked out later.

37. We shall also conduct comprehensive checks to ensure that the key casino employees are suitable to work in the casinos. To Professor Ong Soh Khim’s suggestion to include supporting staff such as cleaners and waiters as special employees to be licensed, we have decided that in the initial stages, only key management staff and those directly related to the gaming operations will be licenced. It will also not be practical nor is it necessary to check and licensed every single employee who is not directly or indirectly involved in the gaming component of the casino. We will monitor this and review whether other types of employees should be included.

38. Ms Indranee has asked about our measures to combat money laundering. As mentioned earlier, we shall put in place a comprehensive set of measures based on the recommendations by the Financial Action Taskforce and the best practices in other gaming jurisdictions. We take this seriously because Singapore is an international financial centre.

39. Ms Indranee Rajah, Ms Ho Geok Choo, Mr Sin Boon Ann, and Mr Ong Kian Min have noted that undesirable activities such as solicitation for prostitution and loan sharking are often associated with overseas casinos and asked what we will do to ensure that our Integrated Resorts are wholesome places to visit. As I mentioned earlier, Section 129 of the Bill will require the casino operators to take all appropriate steps to ensure that undesirable activities, such as prostitution and illegal money lending, do not take place within their premises. We need not define “appropriate steps” upfront because we cannot envisage all the situations. If necessary, these will be made known in subsidiary legislations and CRA directives. The Police and the CRA will work closely with the casino operators to keep the casinos free from such undesirable activities. Police has since last year begun to implement a series of enforcement measures against loan sharks.

40. In addition, Members should not see Section 129 of the Bill in isolation. It should be viewed holistically with our existing laws, such as the Penal Code, Criminal Law (Temporary Provisions) Act, Misuse of Drugs Act, etc that deal with solicitation and loan sharks and other criminal activities. Police is also studying various strategies to help ensure that the overall law and order situation in the vicinity of the Integrated Resorts remains under control. Police is also setting up a Casino Investigation Branch to deal with the potential law and order challenges arising from the casinos. Let me assure Members that the Police will take the necessary enforcement actions to ensure that the Integrated Resorts, including the immediate vicinity of the Resorts, remain wholesome places to visit.

41. Ms Ho Geok Choo has asked about video surveillance in the casinos, the casino operators’ powers to detain suspected offenders and the type of games we will allow in the casinos. We shall require the casino operator to provide comprehensive video surveillance for the gaming area and key locations such as the count room. The Police and CRA will also work out procedures to guide the casino operator in handling and detaining suspected offenders to ensure that there are no excesses.

42. The casinos will not be allowed to offer sports betting. This is already reflected in the Marina Bayfront Request For Proposal document which was launched on 15 Nov 05. The casino operator will also not be allowed to offer remote gambling services that extend beyond the casino boundary. However, the casino operator will have the flexibility to decide on the number of jackpot machines subject to a maximum of 2,500, the number of blackjack tables, or baccarat tables, etc, as these are business decisions best made by operator and not the regulator.

43. Mr Low Thia Khiang has suggested that we should not appoint Board members to the CRA or the National Council on Problem Gambling who have direct or indirect interests in our casinos. This is not practical. What matters is that we put in place good corporate governance standards and we make sure that only persons of integrity with the necessary expertise are appointed to serve. This is also the practice in many other jurisdictions. Mr Low knows full well that no system can prevent a person from taking advantage of his position if he does not have integrity.

44. Perhaps, Mr Low Thia Khiang may wish to serve on the National Council on Problem Gambling. If he is interested, I will ask the Minister for Community Development, Youth and Sports to consider appointing him to the Council.

45. With regard to Inspectors, Mr Low may wish to know that these are CRA employees and they will be given the necessary training including attachments to foreign casino regulators, to ensure that they are up to the task. They will be given the necessary powers to carry out their duties.

Casino Tax and Funding

46. I will now turn to the queries by Mr Ahmad Khalis and Dr Geh Min about the casino taxes and funding for the Casino Regulatory Authority and the National Council on Problem Gambling. As I mentioned earlier, the casino operator will have to pay the casino tax and corporate taxes. This is a standard practice in most casino jurisdictions.

47. We will levy a 15% casino tax on the gross gaming revenue. Gross gaming revenue generated from the premium players will be levied a 5% casino tax. The premium player market is highly selective and the casino operators need to find ways to attract them. Hence, the lower tax rate for premium players is to incentivise the casino operator to bring in more high rollers.

48. This is also practiced elsewhere in many other jurisdictions. Common sense tells us that 5% of a large sum of money from a select pool of high rollers is more in absolute terms compared to 15% of the money put in by small time players. One operator in Las Vegas told me that premium players can possibly account for 75% of the gaming revenue. To Dr Geh Min’s suggestion to have different tax rates for locals or foreigners, the casino operator may find it onerous to keep track their revenues based on nationality. Dr Geh Min will know that there are at most 4 million sitting ducks in Singapore, if we include the underage residents. This surely cannot sustain the business. The casino operators will find it more worthwhile to go for moving ducks from other parts of the world.

49. The additional tax revenue from the casinos will go into the Government’s Consolidated Fund. As they will more than cover the funding of initiatives undertaken by the National Council on Problem Gambling, there is no need to earmark a portion of it for social programmes as suggested by Dr Geh Min. This should be up to the discretion of the social ministries and agencies. Besides, it is not the Government’s policy to earmark revenue for specific purposes.

50. Sir, in conclusion, we have studied and adapted the best practices in other jurisdictions to our unique circumstances to deal with the potential social and law and order impact of casinos on Singapore. As we move ahead, we will continue to review and fine tune our policies to ensure they remain relevant and effective. We are confident that the Casino Control Bill will help provide an environment where the Integrated Resorts can succeed and thrive, while enabling us to keep social and law and order problems under control.

Last Updated on 26 Feb 2015
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