17. Dr Lam Pin Min, Mr Zainal Sapari, Ms Denise Phua, Dr Intan Azura Mokhtar and Mr Desmond Lee expressed their concerns about the safeguards for other forms of gambling beyond the casinos, such as jackpot rooms, and the emerging trend of online gambling. The existing framework which MSF and NCPG have in place to address problem gambling also covers these non-casino gambling platforms and operators.  NCPG runs a public education programme that focuses on raising public awareness of the dangers of problem gambling, not just casino gambling, via both mass media campaigns and targeted community outreach efforts.

18. My Ministry, together with other Government agencies including MSF and MOF, has commenced a review of our regulatory framework and social safeguards for non-casino gambling, including gambling via online channels. 

19.           Online gambling, including gambling on social media platforms and mobile devices, is growing in many countries. Many of the emerging online gambling products are also potentially more addictive. Minors may also fall prey easily given the convenient access to mobile devices. Some overseas gaming jurisdictions have started to draw up laws to regulate online gambling. The US, until recently, had adopted mostly a prohibitive approach. Nevada has just begun issuing licences for operators to offer online poker to persons in Nevada. In the UK there are fewer restrictions imposed on the provision of gambling products, including those online, by licensed operators. On the other hand, the regimes in Australia and Norway tend to impose greater restriction on gambling products offered online. We will study developments in these countries carefully, as well as our own context, as we draw up our framework to address online gambling. Our objective remains the same, which is to preserve our values of thrift and hard work, and protect society, especially the vulnerable, from the potential harms of gambling. 

20. Mr Hri Kumar, Mr Dhinakaran, Mr Zainal Sapari, A/P Eugene Tan, Mr Desmond Lee, Mr Gerald Giam and Mr Seah Kian Peng have all spoken about our gaming regulatory regime.  

21. First, I must emphasise that the Casino Regulatory Authority (CRA) has put in place rigorous regulatory systems and processes to support the enforcement of the Casino Control Act. I would like to assure members that we continue to benchmark our regime against the best practices of referenced gaming jurisdictions such as Nevada, Victoria, New South Wales and Queensland. We have strict probity requirements, and demand high standards of compliance and integrity in gaming. 

22. Our strong and robust gaming regulatory regime has served us well, and in response the casino operators have put in place systems and processes in compliance within our laws. These range from the prevention of money laundering to those rules pertaining to casino games and gaming machines. To bring into effect our unique social safeguard provisions for locals, they have also implemented a comprehensive visitor entry system.

23. Where the casinos did not comply with our requirements, especially in cases where social safeguards have been breached, CRA has taken firm and decisive action. CRA must be able to impose disciplinary actions that are proportionate to the severity of breaches committed. The costs to the casinos for non-compliance must outweigh the potential benefits of such acts. This is why the Bill seeks to increase the maximum financial penalty that can be imposed for serious breaches, from $1 million to 10% of the casino’s annual gross gaming revenue. 

24. Mr Seah Kian Peng spoke about regulatory innovation and the offering of “some incentives” to operators for meeting the larger public interest, for example if the casino registers a lower percentage of local visitors or if it makes fewer errors in admitting excluded persons. CRA’s strict regulatory approach has been made clear to operators from the start. As a principle, we expect casino operators to comply fully with our regulatory requirements. If they fall short, they will be subject to disciplinary action. The relationship is an arm’s length one between regulator and operator. This is the right approach and is also the approach taken by overseas gaming regulators. The incentive for the casino operators is the avoidance of disciplinary action and penalties.

25. I would like to assure Mr Dhinakaran that CRA is also sensitive to business realities, and adopts a practical regulatory approach. Where it is possible to reduce the administrative burden on the casino operators without compromising gaming integrity and law and order, we will do so.  For example, the Bill includes amendments that streamline certain notification and approval processes required of the operators, for greater business flexibility and efficiency. The casino contracts regime will be streamlined to reduce the casino operators’ regulatory workload for lower-risk contracts without compromising CRA’s scrutiny of higher risk contracts. 

26. Let me now move on to address concerns relating to the crime situation in casinos raised by Er Lee Bee Wah, Mr Zainal Sapari, Ms Denise Phua and A/P Eugene Tan.

27. We recognise that the casinos are vulnerable to criminal influence and activities. We have, therefore from the very outset put in place a strict regime to mitigate these risks.

28. CRA aims to prevent criminal elements from entering the industry, whether as operators, employees, suppliers or contractors. To deal effectively with casino crimes, Police set up a specialised Casino Crime Investigation Branch in CID prior to the opening of the casinos. Officers in the Casino Crime Investigation Branch are well-trained and equipped to deal with the myriad of casino crimes, ranging from cheating scams to past-posting of bets. They work closely with their counterparts in other jurisdictions, like Nevada and Macau. This is especially critical, given the increasingly transnational nature of crime and organised criminal groups. The casino operators also have a major part to play to keep our casinos safe and secure. Section 129 of the CCA requires casino operators to ensure that criminal activities such as vice and unlicensed money lending do not take place within the casinos. The casino operators are liable to disciplinary actions should they contravene this requirement. The amendments proposed in the Bill will require casino operators to also ensure that other criminal activities such as illegal betting or gaming activities, or unlicensed casino marketing activities do not take place in the casinos.

29. Er Lee Bee Wah was concerned that loansharks could use the casinos to perpetuate their illegal activities and target the vulnerable. The loansharking situation is an area that MHA and Police work on very closely. There has been good progress in Police’s efforts – the number of loansharking cases has come down since 2010. In 2011, there were 13,342 cases of unlicensed money lending and related harassment cases. This is a 20% drop compared to the cases in 2010. The numbers have continued to decline this year. For the first nine months of this year, the total number of cases reported fell by 21% to 8,204 compared to the same period last year. The improvement in the loanshark situation is due to several factors; a step up in Police enforcement actions, increased preventive education efforts and stronger Police-community partnership.

30.           Er Lee suggested excluding loansharks and loanshark harassers from the casinos. I would like to assure her that this is already provided for in the CCA. These persons fall under the ambit of the Commissioner of Police Exclusion Orders under section 122 of the Casino Control Act. Currently, the Police issues Exclusion Orders to ban undesirable characters from infiltrating the casinos and using the casinos to perpetuate criminal activities. These include loansharks, secret society members and drug traffickers.

31. Mr Hri Kumar and Mr Gerald Giam expressed concerns about the risk of organised crime associated with IMA activities. I would like to assure them that CRA conducts extensive probity checks on IMA applicants to ensure that they are not linked to known criminal elements. Indeed, this year, CRA rejected 12 applicants and approved only two IMAs to operate in our casinos. If CRA finds a particular IMA or their representatives potentially linked to criminal groups, this could form the basis for CRA to then suspend or cancel their licence in the public interest.

32. In response to Mr Giam's query on whether we will have more IMAs in our casinos, CRA will continue to take a cautious approach in granting IMA licenses. While the Act allows us to grant licenses to the IMAs for a period of up to 3 years, CRA has given a shorter one-year licence to the two IMAs that were granted licenses. I should clarify that our IMA regime is materially different and of a higher level of probity from the junket models in other countries.

33. The crime situation in the casinos remains under control. Crimes in the casinos comprise less than 1% of overall crimes in Singapore. Crimes occurring within the casinos have typically been of a petty nature, such as theft of casino chips at the game tables or personal valuables, and cheating by past-posting of bets. Syndicated crimes such as cheating scams and counterfeit chips scams remain few and far between in the casinos.

34. Let me now address Members’ comments on the economic contributions of the IRs. I have grouped my response into three areas: (1) the economic benefits brought by the IRs; (2) how we would ensure that the IRs continue to bring economic benefits; and (3) the IRs’ place in our tourism and economic strategy going forward.

35. First, on economic benefits. As Mr Seah Kian Peng, Mr Dhinakaran and Dr Lam Pin Min have pointed out, the economic benefits brought about by the IRs so far have been substantial. Ms Jessica Tan and Mr Seah Kian Peng have also highlighted that the IRs’ economic contributions has to benefit Singaporeans and local companies.

36. Ms Jessica Tan asked how many jobs the IRs have created for locals, and whether these are good jobs. Mr Png Eng Huat has also expressed some confusion over the IR employment, so I would like take this chance to clarify the figures. 

37. When this House debated whether to proceed with the Integrated Resorts in April 2005, the Prime Minister and Minister for Trade and Industry had told this House that we had learnt from the Request for Concept (RFC) exercise that the IRs would generate direct employment of more than 10,000 jobs and total incremental employment of about 35,000 throughout the economy.

38. In 2006, the Ministry of Trade and Industry revised its estimates upwards after more specific information was obtained during the Request for Proposals (RFP) stage. It was estimated that the IRs would generate about 20,000 direct jobs and between 50,000 and 60,000 jobs economy-wide by 2015.

39.           Today, the two IRs directly employ more than 22,000 employees, of whom about 70% are locals. Based on the figures released by the IRs, they hire more than 15,000 locals, not an insignificant number.

40. The Ministry of Manpower is unable to provide firm-level statistics due to the need to protect business confidentiality. However, we should expect that the IRs’ employment profile to be similar to the rest of the economy, where majority of local employees are Singapore Citizens. To further give the assurance to the House, we have approached the two IRs for their figures and they have agreed to share them with this House. I want to inform the House that Singaporean Citizens comprise about 80% of the IRs’ local employees (SCs and PRs).

41. Singaporeans hold jobs in all areas of the IRs’ operations. Some of these jobs are in new areas, which only came about when the IRs were established. These range from positions in theme park operations in Universal Studios Singapore, to marine specialists at the RWS Marine Life Park, to education programme managers at MBS’ ArtScience Museum and RWS’ Maritime Experiential Museum (MEM). The celebrity chef restaurants at the two IRs have also opened up new opportunities for Singaporeans with high levels of culinary skills and aspirations. The IRs offer jobs not just for fresh school leavers but also mature Singaporeans who want a switch.

42. Ms Jessica Tan and Mr Png Eng Huat have asked about the benefits to our local SMEs. I would like to reassure the members that the IRs have created business opportunities for our local SMEs. About 80% of the IRs’ contracts have been awarded to local companies in a variety of sectors such as food and beverage, laundry, cleaning, transportation and security. In 2011 alone, the IRs awarded contracts worth about $500 million to local companies. The new demand created by the IRs has allowed our SMEs to grow their business and expand their headcount. More importantly, these new business opportunities have enabled local companies to adopt new technologies and move up the value chain.

43. We need to ensure that the IRs continue to enhance Singapore’s tourism appeal and boost our tourism industry. Only then can we ensure that Singaporeans and Singapore businesses continue to enjoy benefits and opportunities. This has been the government’s intent from the start.

44. We should not take for granted that the success of our IRs is a given. We should bear in mind that the business challenges for the IR operators will increase as the novelty factor wears off, as the competition in the region increases. Many countries in the region are developing new projects to enhance their own tourism appeal with some also looking at replicating the IR model. Vietnam has announced that it would open its first IR in 2013. South Korea has planned four IRs, with possibly more to come. In Australia, Sydney recently announced that they are considering an IR overlooking the Darling Harbour. Macau has also announced plans by major operators like Las Vegas Sands, MGM Resorts International and Wynn Resorts for new IRs on the Cotai Strip.

45. As Ms Jessica Tan, Dr Lam Pin Min and Mr Ang Wei Neng have correctly pointed out, the IR operators will need to continually reinvest and upgrade all areas of their IR, their MICE offerings, hotels, food and beverage facilities, theme park attractions - to ensure they are internationally competitive as tourist destinations. 

46. Therefore, I am heartened that Ms Jessica Tan, Dr Lam Pin Min, and Mr Ang Wei Neng had spoken in support of the Evaluation Panel (EP) proposal. The government’s intention to develop Integrated Resorts, not just casinos. The casinos have always been intended as a small part within the larger IR developments, with the gaming revenues cross subsidising the development of non-gaming amenities. The proposed amendment will refine our regulatory framework to give effect to the economic policy intent of the IRs.

47. The performance of the IR operators in their non-gaming facilities and attractions will be made explicit as a factor to be considered by CRA in the renewal of a casino license. The EP will provide an independent opinion to CRA on the ability of the IR operators to fulfil their economic obligations.

48. Ms Jessica Tan asked about the performance indicators that the EP will use to assess the IRs’ performance. The IRs’ ability to develop, maintain and promote themselves as compelling tourist destinations will be assessed across a broad range of indicators. These will include visitor appeal; namely, how the IRs have fared in terms of overall appeal to tourists including their MICE facilities, attractions, theme parks and other non-gaming amenities. The IRs will also be assessed on other indicators such as visitorship trends, benchmarks with respect to similar international attractions, industry standards, and tourism contributions. CRA will take the EP’s opinion into account when it considers the renewal of casino licences.

49. Mr Ang Wei Neng has asked about setting a target ratio of gaming revenue to total IR revenues. I would like to emphasise that the IRs are only in their third year of operations. Their revenues in the first two years may not be representative of their long-term financials in the steady state. In fact, the two IRs’ recent quarterly reports on earnings have indicated that gaming revenues over the last two quarters have been significantly lower due to the global economic uncertainty. The gaming industry is volatile, and in other jurisdictions, gaming revenues tend to fluctuate from year to year.

50. On the other hand, the IRs’ non-gaming revenues have been increasing as they progressively opened more of their non-gaming amenities. The IRs are still at a nascent stage of development. We should therefore not be hasty in drawing conclusions based on the IRs’ revenue figures thus far. I would also be cautious about setting target requirements and intervening directly in the business operations of the operators as there may be unintended consequences.  Rather than look at revenue ratios, we should instead look at the outcomes achieved, in terms of jobs created and business opportunities generated. 

51. Our aim is to keep the IRs as an important piece of Singapore’s tourism offering in the coming years. But I would also like to reassure members that the IRs are by no means our only plan to grow our tourism sector or our economy.

52. The Singapore Tourism Board has developed a strong pipeline of tourism concepts in areas such as the Jurong Lake and Mandai districts, and works with industry stakeholders to refresh existing tourism offerings. For example, we saw the opening of the Gardens by the Bay in June, and the International Cruise Terminal in October. We are also looking forward to the opening of the River Safari in early 2013.

53. Mr Speaker Sir, Ms Jessica Tan, Ms Denise Phua and Mr Zainal Sapari have highlighted the need to ensure that our economy does not become overly reliant on gaming. I would like to assure the Members that the Government pursues a broad-based growth strategy and there is no risk of the economy becoming dependent on gaming. We have a well-diversified economy, with manufacturing and services as our twin engines of growth. Singapore is an attractive and competitive location for high value and complex manufacturing in clusters such as electronics, biomedical sciences, chemicals, transport engineering and precision engineering. We are also a services hub, and are continually upgrading and developing our services industries such as trading, logistics, information, communication and media (ICM), business services and tourism.

54. The two IRs (including their non-gaming components) contribute only about 1.5 to 2% of our Gross Domestic Product. The 22,400 employees employed by the IRs comprise about 0.7% of the total labour force, or about 2% if you include the other 40,000 jobs created elsewhere in the economy.

55. Similarly, the gaming taxes comprise a small fraction of Government revenues. In FY 2011, the net increase in tax revenues due to the IR casinos was $1.1 billion, 2.2% of total Government operating revenue.

56. Mr Speaker Sir, several speakers have made comparisons between Singapore and Macau. I would like to put these comparisons in perspective. In 2011, Macau’s gaming revenue was US$33.5 billion, or about 92.7% of their GDP (US$36.5 billion). As a gaming market, Macau is more than seven times bigger than Singapore. We are at no risk of being overly dependent on the casinos or IRs – they are part of a diversified economy we seek to build for Singapore.

57. But beyond thesenumbers, the real question is why have undertaken this venture called the IRs. It is to create real opportunities for Singaporeans and Singapore companies. Allow me to illustrate this point with some specific examples. Mr Speaker Sir, with your permission I would like to share some slides with members of the House.

58. 31-year-old Mr Gwern Khoo is a Chef de Partie in Waku Ghin, one of the celebrity chef restaurants at Marina Bay Sands (MBS). Before joining MBS, Gwern helped out at his father’s food court stalls selling duck rice and wanton noodles since the age of 14. He also worked part-time as a casual banquet staff in a hotel. After discovering his interest in cooking, he went on to Shatec to take a diploma in culinary skills before joining MBS. Today, Gwern has come a long way and has been identified by celebrity chef Tetsuya as a promising local culinary talent. 

59. Another example of an IR employee is Mr James Tan Chee Meng, a 69-year old who is enjoying his second career as a full-time crew at Universal Studios Singapore (USS), where he is responsible for ensuring the premises and equipment are in order at Pantages Theatre. James is a former engineer who got bored after retiring for less than three months and wanted to return to the workforce. He decided to apply to USS. Described as a dedicated and fatherly figure to the team, James has displayed leadership qualities and is being recommended for career advancement in the USS team.

60. Let me now share an example of a local SME which has benefited from the IRs’ business – Laundry Network. This picture shows Mr Chan Tai Pang, who is the 66-year-old owner of Laundry Network. His company designed a unique uniform management system that is being used by both IRs. This system allows IR employees to swipe their staff passes at the uniform kiosks and collect their uniforms via a special conveyor belt. The business from the IRs has allowed the company to move up the value chain and implement new technology. The company made a combined S$9 million when it implemented a uniform management system that utilises radio frequency identification to track laundry for both IRs. Maintenance contracts with both IRs for this system are worth a total of S$500,000 per annum. Laundry Network has since increased its staff count by over 50 percent to more than 300 workers today.

61.           Mr Speaker, Sir, the Integrated Resorts have operated for more than two years now.   With the benefit of practical experience regulating the casinos, this review of the Casino Control Act is timely.  It allows us to refine our system and processes, taking into account new developments in the gaming sector and overseas jurisdictions, and ensure that our casino regulatory regime remains effective.

62.           The value proposition of the IRs is the economic benefits that they bring and their role in making Singapore a vibrant and dynamic economy.  We want the IRs to continue to reinvest and upgrade their attractions and facilities, stay ahead of regional competitors, and remain compelling world-class tourist destinations.  This way, they will create jobs for Singaporeans, attract more tourists and increase business opportunities for local SMEs.  Members have spoken passionately about the need to contain the social impact.  This is something Government is fully committed to do.  We already have one of the world’s most extensive social safeguards regime.  We will stay vigilant on the social impact and ensure that vulnerable segments of society continue to be protected from the harms of gambling. Police and other law enforcement agencies will also continue their tough enforcement stance so that the casinos remain free from criminal influence. 

63. Ultimately, we want to create more opportunities for the Gwern Khoos, James Tans and Laundry Networks amongst us. The Integrated Resorts are one means of doing so.

64. I therefore urge Members of the House to give your support to the Casino Control (Amendment) Bill.