Despite success, Singapore casinos face political risks (Feature)

By Kai Portmann Oct 7, 2010, 4:07 GMT

Singapore - Singapore's two casinos, since starting operations in February and April, respectively, have answered all economic hopes the government pinned on the multi-billion dollar projects.

But while Resorts World Sentosa and Marina Bay Sands boosted the city-state's economy, the casino operators are now facing a political headwind due to growing concerns about the negative social effects of gambling.

Last month, the Casino Regulatory Authority ordered Resorts World developer, Malaysia's Genting Group and US company Las Vegas Sands Corp to stop providing free buses from residential neighbourhoods to the casinos following an investigation by the Ministry of Community Development, Sports and Youth.

'When the government decided to allow casinos (...) we made it clear that the casinos were primarily to attract additional tourists from abroad,' Minister Vivian Balakrishnan told parliament.

'Our aim was to minimise the impact on locals,' he said.

As Resorts World also promoted its rewards programme in Singapore's heartland, thus running afoul of another regulation, the casino operators 'have been reminded that they must comply strictly with our rules,' Balakrishnan said.

'Where parts of the rules need to be tightened, we will tighten,' stressed the minister, noting that it was up to the regulatory authority to contemplate any penalties for the recent breach of rules.

When Singapore in 2005 announced that it would have not only one, but two casinos, in a controversial u-turn from its 40-year-long gambling ban, the government established social safeguards to protect the local population.

These safeguards, including an entrance levy of 100 Singapore dollars (76 US dollars) for a 24-hour visit at the gaming halls, were 'the most comprehensive to be found anywhere,' said local academic and gaming expert Derek da Cunha.

However, they had not prevented the negative social impact of the casinos, he told a conference on gaming this week.

Stories about casino-related crimes have been making headlines in Singapore's media, including cases of gamblers using other people's identity cards to get into the casinos as well as the story of a local businessman losing 26 million Singapore dollars in a three-day gambling spree.

With those sensational stories, and all the other cases of problem gambling that never made it into the newspapers, 'the political risk increases' for the casinos as the authorities might come up with even more safeguards, said da Cunha.

There was also an external dimension to the political risk as 'the hordes of day-trippers coming across the land links from Malaysia will likely see the export of social problems,' he said.

Comments in popular Singapore internet forums highlight the locals' sensitivity to gambling.

'Most Singaporeans are not properly trained to understand finance and they believe in gaming to lift them from their troubles,' said one comment on The Online Citizen website.

'I've just applied for the casino self-exclusion,' said another, adding that 'perhaps the day may come when the majority of Singaporean(s), recognizing the potential evil of casino gambling, will make a similar stand.'

Since the opening of Resorts World Sentosa and Marina Bay Sands, 'there have been more than one million visits by local residents to the two casinos,' Balakrishnan said.

'These numbers fortunately appear to be stabilising as the novelty wears off,' he said.

Da Cunha, however, suggests the downturn in numbers 'may actually be an indication of a significant portion of local gamblers who initially went into the casinos ... starting to bottom out their resources.'

'The full social impact of the sudden entry of casino gaming into Singapore is likely to be felt next year as there is usually a lag of time between gamblers using a substantial part of their money and the consequences that arise from that,' said da Cunha.

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