Second Reading Speech by Second Minister S Iswaran on the Casino Control (Amendment) Bill

​SECOND READING SPEECH BY MR S ISWARAN, MINISTER IN THE PRIME MINISTER’S OFFICE AND SECOND MINISTER FOR HOME AFFAIRS AND TRADE & INDUSTRY, ON THE CASINO CONTROL (AMENDMENT) BILL, IN PARLIAMENT, ON THURDAY, 15 NOVEMBER 2012

Mr Speaker, Sir, I beg to move, ‘That the Bill be now read a second time’.

Introduction

The Casino Control Act (or CCA) was enacted in 2006. It is the primary piece of legislation to manage and regulate casinos in Singapore.  It also helps to ensure that the Integrated Resorts (IRs) make a positive contribution to our economy, while minimising any potential adverse social impact and maintaining law and order.  

It is timely, at this juncture, to review our casino regulatory regime and the Casino Control Act. Over the past two years, our agencies have gained from the practical experience of regulating the casinos.  Moreover, this is a complex and dynamic industry. It is, therefore, imperative that we continually monitor developments, anticipate trends and challenges, and ensure that our regulatory regime stays effective and relevant.  

Hence, the Ministry of Home Affairs and the Casino Regulatory Authority (CRA) have worked with the Ministry of Trade and Industry (MTI), the Ministry of Social and Family Development (MSF) and the Ministry of Finance (MOF) to review the regime and identify areas for refinement.  In this process, we have also sought to learn from the latest developments and best practices in jurisdictions such as Australia and the US.  

Approach to Casino Regulation

Mr Speaker Sir, let me first emphasise that fundamentally, our approach to regulating the casinos remains unchanged. The Integrated Resorts (IRs) were introduced to enhance our tourism appeal through world class attractions and facilities, and to generate economic benefits for Singapore. Though the casino is a small component of the entire IR development, we recognise the impact it can have on law and order and problem gambling. Hence, from the outset, we have sought to establish a stringent casino regulatory regime, with strong enforcement measures, and strict social safeguards to address the potential adverse effects.  The Government is determined to keep Singapore safe and secure, and to ensure that our society’s strong work ethic and values are not compromised. 

Objectives of Amendment Bill

This Casino Control (Amendment) Bill aims to strengthen our legislative framework for the regulation of casinos in Singapore. The Bill has five main objectives.  First, it enhances the provisions for effective gaming regulation, and streamlines regulatory processes.  Second, it strengthens law enforcement levers to deal with casino-related crime.  Third, it broadens our framework of social safeguards.  Fourth, it refines the regulatory framework to give effect to the economic policy intent of introducing the IRs in Singapore.  Finally, it improves tax administration, for consistency with other Tax Acts.

Stakeholders’ Views

In reviewing the legislation and drafting this Amendment Bill, the different Ministries engaged a wide range of stakeholders on the key proposals.  In particular, the National Council on Problem Gambling (NCPG) sought views from the community, grassroots and religious sectors, as well as social service professionals on the social safeguards provisions.  The two IR operators, as well as regulators and experts, were consulted for an industry perspective on the proposed amendments. The Ministry of Home Affairs also conducted a wider public consultation exercise over a 4-week period from 9 July to 6 August this year. I would like to thank all who contributed for their general support of our policy intent behind these amendments, and for their valuable suggestions which have helped my Ministry and the various government agencies develop and refine the Bill. 

Gaming

Let me now highlight the key amendments proposed in the Bill, beginning with the gaming-related amendments.

Emphasise policy intent for IMA and credit issuance regimes

The Bill amends provisions regarding two important aspects of casino regulation – the International Market Agent regime and the credit issuance regime. 

Clause 2 amends section 2 to redefine “junket promoter” as “international market agent”. The term “international market agent” (IMA) more accurately describes the role of these middlemen who bring international high-rollers to the casinos.  Clause 45 repeals and re-enacts section 110 and inserts new sections 110A, 110B and 110C, to provide for a more comprehensive articulation of our stringent IMA regime. Casino marketing arrangements aimed at Singapore Citizens and Permanent Residents will be expressly prohibited. CRA will be empowered to set a cap, where necessary, on the commission payable by the casino operators to the IMA. CRA will also have the powers to suspend or cancel an IMA licence when it is in the public interest to do so.  As a stronger deterrent to illegal IMA activity, the maximum penalty will be raised from $300,000 to $500,000.

With regard to credit issuance, it is our policy that casino operators cannot extend credit to Singapore Citizens and Permanent Residents, with the exception of premium players. 

In line with this policy intent, the definition of “premium player” in section 2 and the provisions on credit are amended to provide for procedural requirements to be prescribed in Regulations. For example, one of the additional procedures we will prescribe in the Regulations is that the minimum deposit of $100,000, which is required for one to be deemed a premium player, must first be drawn down for gaming purposes, before the Singapore Citizen or PR may be granted additional credit by the casino operator.

Raise financial penalties for serious breaches

Currently, section 54 of the Act empowers CRA to take disciplinary action against casino operators for regulatory breaches. Such disciplinary action can include letters of censure, financial penalty of up to $1 million, or the variation, suspension or termination of the casino licence. 

To ensure that CRA has sufficient levers to deal with serious breaches, Clause 15 amends section 54 to raise the maximum financial penalty which may be imposed in the event of serious breaches, from the current maximum of $1 million to 10% of the casino’s annual gross gaming revenue.  Serious breaches are those which severely affect the integrity of casino operations or gaming, or which severely undermine social safeguards.  They include situations where a significant gain or loss of property had been wrongfully caused; where the breach occurred as a result of wilful intent or reckless disregard for regulatory compliance; where the breach arose from systemic failure or multiple failures in the management or operation of the casino; or where the breach is injurious to the public interest.  

This enhanced financial penalty will complement CRA’s existing powers to take disciplinary action including the authority to vary, suspend or terminate the casino licence.

Other amendments for greater regulatory effectiveness target both the casino operator and other licensees like the casino special employees. A casino operator’s failure to provide information to the Regulator when required, or the provision of false or misleading information, will explicitly be made grounds for disciplinary action. 

Today, CRA may suspend a special employee’s licence if he has been convicted in court. Clause 33 inserts a new section 93A to empower CRA to immediately suspend a special employee’s licence, pending the conclusion of any inquiry or disciplinary proceedings against the licence holder.

Refine, clarify and streamline gaming regulation

The Bill also includes other gaming-related amendments that serve to refine, clarify and streamline gaming regulatory processes for greater effectiveness and business flexibility, without compromising gaming integrity.  

Law and Order

Let me now turn to amendments relating to law and order.

Today, casino operators are required to take steps to ensure that criminal activities such as vice, illegal moneylending and disorderly behaviour do not occur within the casinos. Clause 57 amends section 129 to add that the casino operator must also ensure that illegal betting activities and unlicensed casino marketing activities do not occur in the casinos. 

While the crime situation in the casinos has been under control, we are mindful of the vulnerability of casinos to criminal infiltration.  Therefore, the Home Team agencies continue to be vigilant and proactive in seeking to enhance our levers to prevent, detect and deal with casino-related crime. Clauses 94 to 98 amend sections 171 to 174 to create specific casino-related offences, such as those relating to counterfeit chips, cheating at play, collusion and unlawful interference with gaming equipment. These amendments will make the CCA a more comprehensive piece of legislation to deal with the range of crimes that commonly occur within casinos.

Social

Next, let me address the amendments pertaining to social safeguards. 

Today, we have a robust social safeguards regime to minimise the potential harm of casino gambling. This regime has several components. We require locals to pay an entry levy to discourage casual and impulse gambling in the casinos.  We prohibit minors from entry and have a system of casino exclusions targeted at vulnerable persons, including those on Government social assistance programmes and undischarged bankrupts. We disallow the extension of credit to locals unless they are premium players.  

While the existing set of social safeguards has worked well for most Singaporeans, there is a need for a complementary set of targeted measures to address the more vulnerable groups. 

Earlier this year, NCPG released the findings of its 2011 Gambling Participation survey. The survey showed that the problem gambling rate in Singapore has remained stable relative to the previous survey conducted in 2008, that is, after the casinos have opened. The latest survey, however, highlights a few emerging areas of concern. The proportion of low-income gamblers who bet large amounts has increased. Also, problem gamblers have the propensity to gamble more frequently and have poorer self-control. Hence, one key objective of this Bill is to further protect financially vulnerable Singapore Citizens and Permanent Residents who visit the casinos frequently.

Visit limits

Clauses 79 to 81, 84, 86, and 88 introduce a new casino visit limit regime. This new visit limit regime will complement the current casino exclusion regime. It broadens the suite of measures to protect an individual from the harm of problem gambling. In addition to issuing exclusion orders, the NCPG may now also impose visit limits on financially vulnerable locals who visit the casinos frequently.  The visit limit will set a cap on the number of times an individual may visit the casino each month.

Analogous to the casino exclusion regime, there will be three forms of visit limits.  Individuals and families can apply to the NCPG for voluntary self-imposed visit limits and family visit limits respectively.  In addition, the NCPG will be empowered to appoint a Committee of Assessors to determine whether a third party visit limit should be imposed on a financially vulnerable person. The Committee of Assessors, chaired by a member of the Council, will comprise two other members drawn from a pool of experienced community and grassroots leaders, as well as social service professionals. The Committee will be deliberate in its evaluation of an individual’s financial vulnerability, taking into consideration factors such as the frequency and extent of casino visits in relation to his credit record and financial circumstances, as well as information provided by family members. 

The actual visit limit imposed may differ from person to person, depending on each individual’s circumstances. Individuals will have the right to be heard and the right of appeal. MSF estimates that some 4,000 to 6,000 locals could fall within this category of persons requiring more targeted intervention through the imposition of visit limits. MSF and NCPG are working towards rolling out the visit limit regime by the middle of next year.

Enhancements to NCPG Exclusion Regime

The existing NCPG casino exclusion regime will also be enhanced to improve its responsiveness and efficacy. Clause 85 repeals and re-enacts section 164, Clause 88 inserts new sections 165B, 165C and 165D, and Clause 89 amends section 166, to enhance the powers of NCPG’s Committee of Assessors to issue and revoke casino exclusion orders and visit limits. Provisional family exclusion orders can be made if there is a need to act urgently to protect the family from further harm. 

The Committee will also be empowered to issue a family exclusion order in the event that the family member with a gambling problem cannot be located or is uncooperative.   The revocation process for exclusions and visit limits will be tightened by requiring excluded persons to undergo counselling or harm assessment, as necessary, as a condition for revocation of self and family exclusions and visit limits.

Deterrence against Contravention of Social Safeguards

Clauses 49, 54 and 99 amend or add sections, namely 116, 125 and 175A, to penalise deliberate breaches of the social safeguards regime.  The proposed amendments will make it an offence for one to remain in the casino beyond the validity period without paying the entry levy for the period of over-stay before leaving the casino.  Attempted entry into the casino without payment of the entry levy will also be made an offence.  Both of these offences will be punishable with a fine of up to $1,000.  

A breach of an NCPG third-party exclusion or third party visit limit will also be an offence punishable with a fine of up to $10,000 or imprisonment not exceeding 12 months, or both.  It will also be an offence for a person to enter the casino under false pretences.  This offence carries a penalty of a fine up to $10,000 or imprisonment not exceeding 3 years or both.

Responsible Gambling

The casino operators will be required to commit to Responsible Gambling (RG) and to improve the efficacy and visibility of RG at the casinos.  Clause 93 inserts a new Part XA, comprising new sections 170A to 170C, to establish a more robust regulatory and approval framework for Responsible Gambling and also for Casino advertising and promotion. 

The casino operators must have an approved Responsible Gambling programme that meets prescribed requirements. These include regular reviews and comparisons with good practices in other jurisdictions, and greater specificity on operationalising Responsible Gambling practices in the casinos. The new section 170C enables the Authority to require a special audit to be conducted on the casino operator’s advertising and promotional activities or Responsible Gambling practices.

Economic

Mr Speaker Sir, let me now move on to the amendments with respect to the economic policy intent of the IRs.  

The casinos were always envisaged as one relatively small component of a large and diversified Integrated Resort development that would contribute significantly to our tourism industry and our economy. 

In this regard, the IRs have met our expectations today.  Together, the two IRs have committed a total development investment of more than $13 billion.  They have brought in non-gaming elements, such as Meetings, Incentives, Conferencing, and Exhibitions (MICE) facilities, theme parks, celebrity chef restaurants, museums and theatres, which have broadened our leisure offerings. The IRs have received prominent international coverage and added vibrancy and buzz to Singapore.

The IRs directly employ more than 22,000 employees and have created a further 40,000 jobs minimally throughout the economy.  The IRs have broadened the range of job and career opportunities for Singaporeans, with the bulk of the jobs in areas such as theme park operations, retail and food and beverage.

Local businesses have also benefitted from the IRs’ presence.  The IRs have indicated that in 2011, they awarded around $500 million in contracts to local companies across various sectors, including retail, food and beverage and transportation.

While Singapore’s tourism industry has grown, the tourism landscape in the region is also becoming increasingly competitive.  Developments that are similar in concept to our Singapore IRs are emerging in countries like the Philippines and Vietnam. We must expect the competition to increase, especially as the novelty factor wears off with our own IRs. Our IR operators will need to continually reinvest and enhance their attractions to remain competitive and appeal to international visitors, as indeed they have committed to do contractually.  

Evaluation Panel

The proposed amendments provide for a clear and systematic engagement process for government agencies and the IR operators to ensure that the broader tourism and economic objectives are consistently attained.

Clause 9 amends section 45 to allow CRA to take into account the IR operators’ ability to maintain, promote and develop the IRs as compelling tourist destinations when assessing applications to grant or renew casino licences.  This will be considered alongside the casino operator’s track record of compliance with other legal and regulatory requirements, including social safeguards.

Clause 10 will introduce a new section 45A for the Minister responsible for tourism development and promotion to appoint an Evaluation Panel (EP).  This panel will provide an independent opinion to CRA on the ability of the IR operators to fulfil their economic obligations.  The IRs’ ability to do so will be considered on the basis of a broad range of indicators such as visitor appeal and visitorship trends, benchmarks with respect to similar international attractions, industry standards, and tourism contributions.

In convening the EP, MTI will seek to appoint members who understand both the economic policy intent of Government and the business needs of the IRs to ensure the sustainability of the IRs’ economic contributions.  To allow for adequate lead time to develop and work through the EP assessment framework, these amendments will apply in respect of any application for the grant or renewal of any casino licence commencing only on or after 1 January 2015.

Tax and Others

Finally, let me touch on the tax-related amendments and other matters. Clauses 68 to 74 of the Bill amend Part IX of the CCA to empower the Minister for Finance to prescribe obligations of the casino operator for tracking revenue attributed to premium players.  The time bar period for the claim of refund of casino tax, and the data sharing provisions, are also aligned with similar provisions in other Tax Acts.

The Bill will also expand the ability of CRA and other agencies to make Regulations, including the adoption and approval of codes, standards, and the issuance of guidelines for casino operations.  These provisions are at Clauses 115 and 116.  In addition, Clauses 110, 114 and 117 will broaden the existing data provisions, primarily section 190, so that government ministries like MSF and MTI may obtain relevant data from CRA for the purposes of policy formulation.

Conclusion

Mr Speaker Sir, let me conclude.  Over the past two years, the IRs have generated significant economic benefits for Singapore. At the same time, government ministries and agencies have been vigilant, and endeavoured to minimise any adverse social impact, and to maintain law and order. This Amendment Bill will put us on an even more robust legislative footing to effectively regulate the industry for the long term.  This piece of legislation, together with our plans to deepen CRA’s capabilities and expertise, will help us stay ahead of potential challenges posed by the casino industry, and to achieve an outcome that benefits Singapore and Singaporeans.

Mr Speaker Sir, I beg to move.