Published in: Latest Intelligence
Singapore sticks to its guns on local access to casinos as one of the barriers the city state has put up to its residents seeing the inside of a casino while operators face stringent regulation with fines coming out of the bottom line. The entry levy innovation system is being studied by other places considering legalization.
In many places, tales of people falling into debt from gambling, clashing with their family and turning to crime or other desperate measures are common news fodder.
Not so much in Singapore. The city-state has been home to two casino-equipped “integrated resorts” since 2010 and to legal slot machines, a lottery, sports betting and horse racing for much longer but the local media, not known for probing the underside of Singapore’s sunny and prosperous facade, has found little to report here. Even local groups that treat gambling addicts are reluctant to discuss what they see.
“Problem gambling issues in Singapore are largely contained,” said Chan Chun Sing, acting minister for community development, youth and sports last year. Official reports say casino-linked crime represents less than 1 percent of reported incidents.
Yet, mindful of continuing concern from religious and social groups, Singapore is not taking a relaxed approach to gambling by its citizens. The two casinos, Las Vegas Sands Corp.’s Marina Bay Sands and Genting Group’s Resorts World Sentosa, are required to collect S$100 ($81) a day from citizens and permanent residents who seek entry unless they have paid S$2,000 for an annual pass.
Many are willing to pay. Locals account for around a quarter of customers at the two casinos and generate 30 percent to 40 percent of their revenues – a much higher share than originally projected according to Jonathan Galaviz, a Las Vegas-based casino analyst and consultant.
“The S$100 entry has been largely effective at deterring frivolous or impulsive gambling and is not likely to be raised soon,” says Christopher Khoo, the managing director of MasterConsult Services who was previously with the Singapore Tourism Board. The government’s takings from the entry levy reached S$134 million in the first nine months of 2012.
Singapore’s intermediate approach of using a financial barrier to limit local access to its casinos is novel in Asia where a few jurisdictions, led by Macau and the Philippines, allow entry to anyone of age but most bar local access to keep casinos focused on extracting money from foreign visitors. South Korea has more than a dozen casinos, for example, with local entry allowed only to the remote Kangwon Land Casino. Goa moved last year to bar state residents from access too. Nepal also bars locals, but recent police raids on casinos in the capital have even netted a high-ranking government official.
The entry levy innovation is being studied by other places considering legalization. Taiwan, which has been drafting a new gaming law following the passage of a referendum to allow casinos on the island of Matsu, considered charging locals NT$2,000 ($67). Samoa, which recently handed out two casino licenses, has barred residents and a chief of the village where one gambling resort is to be built has said they are likely to be fined 20 hogs if they enter.
Underscoring the seriousness of the Singapore levy’s intent, the Casino Regulatory Authority last year fined Resorts World S$600,000, its biggest penalty to date, for providing gifts to 3,400 locals when they purchased or renewed annual entry passes the previous year. The authority said the Universal Studios Singapore and concert tickets and free hotel nights provided constituted improper reimbursements. It also cited the casino for failing to submit details of the marketing program and submitting documents that may have been forged or false. The authority fined the casino S$530,000 a year earlier for four offenses, including reimbursing the entry levy for reporters who came to cover an event at the resort.
The levy is just one of the barriers Singapore has put up to its residents. Another is an exclusion list of people the casinos are required to bar from entry. The list was originally created for residents to list themselves and as of March 31, 10,479 citizens and permanent residents had done so. Another 1,399 people had been added by family members, a process that was introduced three years ago. (Some 92,744 foreigners, many in Singapore on temporary work visas, are on the list too.)
But those categories of residents have been overtaken by the government’s own 43,519 additions. The government first added 28,661 people in 2009, about 25,000 of whom were in bankruptcy with the rest recipients of public assistance. Last year, another 15,000 were added, including 12,000 recipients of short and medium term aid from another government program and some 3,000 public housing residents at least six months behind in their rent.
This year, Singapore introduced an intermediate measure for the “financially vulnerable”. Gamblers can preset a monthly cap on their visits after which the casinos are required to block their entry. Family members can also apply to set a monthly cap. The National Council on Problem Gambling can also set a cap if it concludes that an individual is losing control of his gambling based on betting amounts or frequency in visits.
The introduction of the limits followed a survey by the council which found that low-income players were betting larger sums compared to three years earlier. Chan, the government minister, said late last year, “We are also studying circuit breakers – which put limits on betting machines – to address locals with poor self-control and at risk of financial and other harms due to gambling.”
The government has yet to release any data on use of the limits.
Some legislators want the government to go further. Zainal Sapari of the ruling People’s Action Party said during debate last year that the country should emulate Vietnam in banning locals entirely or at least end credit extension to residents. Another PAP legislator said surveys showed the public felt the process of putting a family member on the exclusion list was too difficult.
In addition to the visit limits, amendments adopted to the country’s casino law last November strengthened prohibitions against casino marketing to locals and raised the maximum fine for offenses such as not collecting the entry levy from S$1 million to 10 percent of annual gross gaming revenue, or close to S$200 million.
The new rules come at a time when the chips are falling for the casino sector in the city state. Market analysts are projecting revenues to be flat or, at the top end, to grow by less than 10 percent in 2013 compared to 8 percent growth in 2012.
Much of the sluggishness comes from the domestic market. “Gaming revenues from locals have essentially leveled off and are not really growing in a notable fashion,” said one overseas analyst. ”Perhaps this is viewed positively by the government.”
One measure will be the full-year figures for 2012 entry levy collections, which are expected to have come in below the take of the previous two years. “This downward trend suggests that the novelty factor is wearing off,” said S. Iswaran, second minister for home affairs and trade and industry, in November.