This article was published in issue no. 1301 of the Hammer, the Workers' Party's publication, which went on sale during the Punggol East By-Election and is currently being sold by members at selected marketplaces on weekends.
The Casino Control (Amendment) Act was passed by Parliament in November 2012. Among the significant changes is that the government can appoint three or more persons to an evaluation panel to evaluate the integrated resorts on visitor appeal, international value of attractions, meeting market demand, and contribution to tourism. The panel’s opinion will be sought when considering casino license grant or renewal applications, which take place every three years.
In the controversial decision to build the casinos, the government’s key justification was their economic benefit. As the argument goes, the casinos are a necessary evil that we can live with as long as the economic benefits outweigh the social costs. The government boasts that the casinos have contributed some 1.5% to the GDP and some 62,000 direct and spun-off jobs. But this is no independent assessment. The casinos have also brought billions of tax dollars to the government’s coffers. An independent evaluation panel is therefore a welcome move.
However, the move has fallen short in several ways.
First, the panel is not required to make its evaluation public. Needless to say, the panel’s work is of great value and interest to the public. The panel's report should be made public, so that Singaporeans can fully understand the trade-offs the government likes to speak off but has been unable to explain adequately and independently. Better still, the panel’s report should be tabled for debate in Parliament, since the casinos are of national interest. Parliamentary scrutiny would prevent the panel from becoming a third-party endorsement of the casinos.
Transparency and accountability is owed to the public. Unlike its closest competitors, Macau and Las Vegas, Singapore does not publish regular facts and figures on gaming revenue and taxes. This has fed perception among Singaporeans and industry watchers that there is something to hide. It does not help that the Amendment now puts all tax-related information concerning the casinos under the Official Secrets Act. The evaluation panel could fill this gap by researching and publishing important facts and figures in its reports.
The legislated terms of reference for the evaluation panel are too narrowly focused. The terms of reference are too narrowly confined to the tourism industry. The panel should evaluate the general impact of the casinos on the economy, and give concrete evidence on claims such as the percentage contribution to GDP and the number of jobs created. As Mr Png Eng Huat pointed out in his parliamentary speech on the bill, it is crucial that we know how much of the gains are going to Singaporean workers.
One of the terms of reference for the panel is the evaluation of whether the casinos are meeting market demand. It is a scary thought that the evaluation panel’s opinions on this could be used as justification to expand the integrated resorts for a third casino and more. Moreover, gambling does not make for a market in the normal sense of the word. Like tobacco and alcohol consumption, gambling demand is easily stoked by marketing ploys. This means that market demand is very elastic—it could stretch from low when regulation is strong to very high when advertisements are successful—and therefore hard to measure.
It is notable that one of the significant changes introduced by the bill is the renaming of junket promoters as international market agents. Junkets are gambling groups organized by promoters receiving a commission from the casino and extending loans to players. Junkets make up the majority of the business in Macau and have the reputation of being associated with organized crime and loan-sharking. The renaming gives a more professional ring to junkets permitted to operate here. However, the Amendment allows the casinos to now provide credit to the international market agents and agents to provide credit to any foreign player, not just high-worth foreign players. This actually brings the practice closer to the Macau junkets despite the cosmetic renaming.
After dragging its feet over allow junkets to operate here, the government approved two Malaysian junket operators and has rejected twelve other applicants in March 2012. The government has said that junkets would supplement, not dominate, the casino market here. But as Mr Gerald Giam asked in his parliamentary speech, would this opening be a slippery slope down to junkets propping up demand to sustain the casino business here? In relation to the evaluation panel, how are they to assess market demand when junkets are allowed to prop up or even scale up the business?
Perhaps the most important problem with the terms of reference is that the panel will evaluate the casinos on wholly economic grounds. The Amendment tightens regulation of casino advertising and promotion, after several incidents in the past few years demonstrated how the casinos could come up with creative ways to boost local market demand. The Amendment also introduces new requirements for the casinos to implement “responsible gambling” programmes. This is all well and good, but without evaluation of regulatory and programme effectiveness, how do we know that the social costs of casinos have been abated and are well managed?
Currently, the website on responsible gambling for the two casinos refers problem gamblers to the National Council on Problem Gambling, which would in turn redirect gamblers seeking help to third parties, such as Family Service Centres and the Institute of Mental Health’s National Addictions Management Service. With all seriousness, can the casinos be trusted to run the responsible gambling programmes? Would responsible gambling programmes become a cynical exercise in corporate social responsibility publicity?
Albeit limited, the evaluation panel provides an independent assessment of the economic benefits of casinos. Who will provide an independent assessment of the social costs, so that Singaporeans would know that the casinos are worth their price as has been claimed? This is the crux of Mr Chen Show Mao’s parliamentary speech on the bill. It does not make sense for a panel to only evaluate the economic benefits when we do not know the actual social costs. It is only in weighing the two that we can see the actual trade-off and make an informed decision.
It is estimated that Singaporeans make up 20-40 per cent of visitors to the casinos and some 200,000 Singaporeans visited in 2010. Prime Minister Lee recently put the figure at a quarter and hoped that this would stabilize, but said total gambling has not changed, suggesting that gamblers are switching from horse races to the casinos. I am very uncomfortable with this. We are already the second highest in the world in terms of gambling losses per capita, according to a report published in The Economist in 2011. The casinos are supposed to target the tourist dollar, not Singaporeans’ hard-earned money. 25 per cent is too high a figure to hope for stabilization on.
But this is grasping at straws. As long as we don’t have objective evaluation of both economic benefits and social costs to see the balance, the economic benefits are going to be abstract, while the loanshark’s paint job on my neighbour’s door is going to be the visceral reminder of very real social costs.
the persistently political pine stays green in the winter of the patriarch ... while, one by one, the gentlemen fall prey to the corruption of power and patronage
s/pores new directions in singapore studies