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The
Business Times, 24 Aug 04
Taking the gamble... and keeping social ills
out
Restricting entry will reduce casino's viability, say experts. Instead,
look at options like limiting bet sizes
By Glenys Sim
WANTED: commercial proposals to build a casino in Singapore which
will bring in the dollars and yet put the lid on social problems that
may surface.
Prime Minister Lee Hsien Loong made the call on Sunday when he spoke
of how the Government came round to considering the idea of a casino.
But his suggestion that there should be entry barriers to keep out
the lower-income group is likely to dampen commercial operators' aspirations.
Such a casino will reduce the attractiveness of the destination, said
experts in the industry. Gaming consultant Jonathan Galaviz said:
'Singapore is not one of the world leaders in tourism and so it needs
the support of locals first to ensure the viability of a casino.
'Casino operators need this basic economic foundation to work with
and if it's not there, there is no doubt that investments will be
reduced.' Casinos typically make most of their money off the mass
market - those who come in and gamble away $50 - not the high rollers,
said University of Massachusetts professor Chris Roberts, who teaches
and does research on casino and resort management.
The world's two largest gaming companies, MGM-Mirage and Harrah's
Entertainment, have shown interest in investing in a Singapore casino.
Both have also said that restrictive entry rules are not conducive
to large investments.
Even with PM Lee's announcement, interest is still there, said a spokesman
for Harrah's Entertainment contacted yesterday, 'but it's too early
in the process to determine what the size and scope of a potential
project might be'. 'We'd need further information on the proposed
regulatory and tax structures, the potential customer demographics
and other details before being able to draft a proposal.'
MGM-Mirage was unable to comment because it is in the process of seeking
an initial public offering.
Global gaming consultant Andy Nazarechuk feels that it is much easier
to track and limit gaming by keeping people here because 'they will
go elsewhere to gamble anyway'. 'Legalising and controlling gaming
makes much more sense than to let it run illegally and then spend
money trying to stop the illegal activity,' he added. Singaporeans
spend US$400 million (S$688 million) on cruise ships and US$140 million
in Batam casinos, according to figures by United States-based gaming
and leisure consulting company, The Innovation Group.
This is one reason the Government is now considering the idea of a
casino here. The Ministry of Trade and Industry has put up a proposal
for an integrated entertainment centre, complete with hotels, convention
facilities, theme attractions, retail shops, food and beverage outlets
and possibly a casino.
A decision is expected in January.
While hoping to secure more tourists this way, there is concern that
having a casino would fuel crime and undermine moral values. Gaming
experts suggest that instead of denying access to lower-income Singaporeans,
Singapore should think about policing them in other ways.
One suggestion: use a smartcard system in which a person's income
level, betting limits and playing time are coded on a chip. A person
can be denied access once a certain level is reached.
Another suggestion is to work with only companies which have licences
in other jurisdictions. This is because regulations covering the gaming
industry in, say, Nevada, the US, are very stringent and gaming licences
are interdependent. If a company violates regulations in, for example,
Singapore, this can jeopardise its licences in Nevada. Reputable companies
will not risk this.
Other suggestions include harm-minimisation regulations such as gambling-addiction
warning signs around the casino, advertising restrictions, stipulated
breaks in play, caps on the number of machines and maximum bet sizes.
Mr Galaviz said that the restrictions must not be so onerous that
operators cannot justify large investments. 'It will beg the question:
Is it worthwhile legalising a casino then? Because the whole point
of it is to generate a mass-market tourism tool to compete with regional
players,' he said. |
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