Oral Reply to Parliament Question on Remote Gambling by Mr Desmond Lee, Senior Minister of State, Ministry of Home Affairs and Ministry National Development

Question:

Mr Edwin Tong Chun Fai: To ask the Minister for Home Affairs (a) what are the considerations in the grant of an exempt operator licence for online gambling; and (b) in the grant of such a licence, what specific measures will be taken to contain and control the potential of remote gambling to cause harm especially to young persons, vulnerable persons and society at large.

Answer:

1. The Remote Gambling Act (RGA) was passed by Parliament in October 2014, and came into force in February 2015.

2. The legislation aims to tackle law-and-order issues associated with remote gambling, and to protect young persons and other vulnerable persons from being harmed by remote gambling. The RGA provides for a general prohibition of remote gambling. It criminalises the entire spectrum of remote gambling activities and puts in place a comprehensive set of website- and payment-blocking measures. It also provides for a tightly controlled Exempt Operator regime. When the act was passed, that was the framework: prohibition with a tightly controlled valve.

3. Globally, remote gambling is a significant and fast-growing sector. Global remote gambling activities was estimated to be around US$40 billion in 2015, and had grown at an annual rate of 6-8% over the past five years. At this rate, the remote gambling market will double in size roughly every ten years. Here in Singapore, we are not immune from these global trends, given our high internet and smartphone penetration rates. Data provided by IDA showed that in 2014, the mobile penetration rate in Singapore was at a whopping 148%, while the global average then was 93%. Similarly, in 2014, the internet penetration rate in Singapore was 73% versus a global average of 35%.

4. Since the RGA came into force, we have effected a general prohibition, with robust enforcement and comprehensive blocking measures to stem the growth of remote gambling within Singapore. Several hundred gambling websites, together with bank accounts and payments linked to remote gambling services, have been blocked. These measures are necessary, but not sufficient, to protect Singaporeans from the harms of illegal remote gambling and problem gambling.

5. The nature of the internet is such that it is not possible to completely block access to illegal gambling websites. We would be mistaken to believe that illegal online gambling does not exist. Determined gamblers can circumvent website-blocking measures by using virtual private networks or through proxy websites. Since February 2015, Police have arrested more than 120 persons for remote gambling activities.

6. Underground gambling poses serious law-and-order concerns, particularly because of its linkages with organised crime. Secret societies are known to offer illegal 4D and other gambling products. Illegal bookies also engage in unlicensed money-lending and money-laundering.

7. Illegal remote gambling does not come with any social safeguards. There is no expenditure limit, no prohibition of use of credit cards, no monitoring of gambling behaviours and no help provided to ensure responsible gambling.

8. Many underground gambling operations are related to international crime syndicates. For example, in the run-up to and during the recent Euro 2016 football championship, Police worked with foreign law enforcement agencies through Operation SOGA VI, an Interpol-led effort, to arrest persons involved in syndicated remote betting operations. In that one operation, 4,000 individuals were arrested across France, Greece, Italy, Malaysia, Thailand, Vietnam, China and Singapore. As part of the operation, SPF apprehended 39 suspects in Singapore, who dealt with S$2.5 million of bets.

9. Taking a realistic and clear minded approach, a complete ban on remote gambling will drive demand underground, and create larger incentives for criminal syndicates to target Singaporeans.  Hence, the RGA, when passed, provided for a tightly-controlled Exempt Operator regime. The exemption regime complements our strategy of general prohibition and blocking measures. It has to be seen in totality, as an entire ecosystem of framework and measures, which working together, tries to reduce law-and-order and problem gambling concerns. It is consistent with our existing approach in the terrestrial gambling space – gambling activities are criminalised and a tightly-controlled valve is allowed as part of the overall system to minimise law-and-order concerns. From our experience with the terrestrial gambling space, this has worked well. A number of other jurisdictions, such as Hong Kong and Norway, adopt a similar approach – allowing regulated operators to complement a general prohibition of remote gambling.

10. However, we are very careful with providing the exemption. We have imposed strict qualifying criteria for the exemption certificate. The exempt operator has to be a not-for-profit entity that distributes monies to public, social or charitable purposes. Directors and key officers of the operator cannot have been convicted of offences that render them unfit. The operator must possess a consistent track record of compliance with legal and regulatory requirements.

11. We have also restricted the betting products that the operators can offer. Betting products are limited to those currently available via terrestrial channels. Casino-style games and poker will not be allowed.

12. The exempt operator is also required to implement strict social safeguards, to minimise potential harm to their customers. Minister Tan Chuan Jin, in his earlier reply to Mr Christopher De Souza, elaborated on the social safeguards.

13. We wish to stress that the exemption regime does not change our stance towards gambling. We do not promote gambling. We do not think gambling should be a way to make a living. We conduct public education on the potential harms of gambling, and we have social safeguards in place. We will continue to enforce strongly against all underground gambling activities.

14. Our approach towards gambling is similar to many countries' approach in managing other vices, such as drinking and smoking. Although we discourage drinking and smoking, we do not have a complete ban. Instead, we manage the potential harm through regulations and public education.

15. Some have compared gambling to drug abuse, saying that if we allow a safety valve for gambling, then why not allow a safety valve for drug taking or drug offences. I believe they are asking a rhetorical question, by conflating these two activities. A direct comparison cannot be made in the way we tackle drugs, and the way we try to manage vice in society. The magnitude of harm resulting from drug abuse is vastly different from and much more severe than that for gambling. Our regimes towards drug abuse and vices, such as gambling, are necessarily different.

16. To conclude, the reality is that illegal gambling exists today. We cannot wish away the presence of underground markets, where criminal activities abound, and signs of problem gambling go about undetected.

17. What the Exempt Operator regime aims to achieve, is to provide a regulated and controlled outlet, to divert activities from illegal operators. It is an integral part of our strategy to deal with the problem of remote gambling. It complements the general prohibition of remote gambling, blocking of access and payments to illegal sites, strict enforcement, promotion of awareness and personal responsibility through public education, and outreach and engagement.