Fred Gushin and Paul Bromberg of Spectrum Gaming Group take a deep dive into the regulatory model for Singapore’s integrated resorts and examine the key factors behind its undoubted success.
Singapore represents the major Asian gaming jurisdiction operating under a comprehensive regulatory system that also provides some of the highest gross gaming revenues and profits to its IR operators. The gaming law was passed in 2006, and Marina Bay Sands and Resorts World Sentosa, who were awarded their projects through a transparent and competitive RFP process, both opened in 2010. In contrast to most other gaming jurisdictions in Asia, the Singapore government set up a comprehensive and unambiguous regulatory structure under the auspices of the Casino Regulatory Authority (CRA) of Singapore, a law enforcement agency established on 2 April 2008 under the Ministry of Home Affairs (MHA). The CRA was enabled under the Casino Control Act (originally enacted in 2006), which aimed to provide an effective basis to regulate the two Integrated Resort (IR) casinos in Singapore and provide the necessary integrity to maintain public confidence in the regulatory process.
The Singapore Tourism Board (STB) has also been, and continues to be, directly involved in Singapore’s IRs. There is a clear division of authority between the two agencies that has generally worked well over the course of the last 18 years. For example, STB and the Ministry of Trade and Industry, under which STB operates, drafted and implemented the Request for Proposals (RFPs) for the IRs in 2005, and STB was involved in the 2019 decision to expand both IRs. The RFPs served as a model for other jurisdictions because the STB set out clear policy goals (increased visitation and increased spending by visitors to Singapore) and the framework for the development of IRs in Singapore.
Regulation
The Singapore Government has always taken regulation seriously and has been willing to review and update the gaming laws and policies related to the IRs, as reflected in amendments promulgated in 2012 and 2022 to various relevant gaming laws and policies.
On 1 August 2022, the Gambling Regulatory Authority (GRA), also under the MHA, was reconstituted from the CRA as the single regulatory body overseeing all gambling activities in Singapore. Previously, various regulatory bodies had partial control over different aspects of local gambling. The GRA’s stated mandate and mission on its website is “to protect the people of Singapore by keeping gambling honest and free of criminal influence and minimizing the harm from gambling.” Legislation governing the regulation, supervision and control of gambling activities in Singapore was also consolidated at the same time, as follows:
The Gambling Regulatory Authority of Singapore Act 2022 provided for the establishment and powers of the GRA
The Gambling Control Act 2022 consolidated gambling legislation, increased punishment for illegal gambling activities and now regulates all remote gambling in Singapore
The GRA has also been tasked with reviewing and updating the existing regulatory framework to better reflect the modern gambling market. We therefore expect to see further regulatory and legislative changes over the next 12 to 18 months.
It should be noted that the Singapore Police Force continues to investigate and enforce against all criminal offences involving, or relating to, gambling activities, such as illegal public gambling and the operation of illegal remote gambling services, in addition to ancillary offences, such as fraud, loan sharking and money laundering. The Ministry of Social and Family Development and the National Council on Problem Gambling deal with societal issues caused by gambling.
Singapore’s regulatory regime is now often cited as an example of a successful regulatory model, and one to be emulated by other jurisdictions. Japan, for example, has been widely reported as planning to follow the Singapore model, and observers have also recommended the Singapore model to Thailand’s legislators should they decide to legalize casinos.
Singapore was ahead of the curve on junket issues. The initial gaming law in 2006 did not prohibit junkets but, instead, required licensing and a variety of operational and AML controls. To many in government and law enforcement, strict regulation of the junket industry – even if that meant no local junket industry – was in line with the overarching policy of keeping organized crime out of Singapore. History has validated Singapore’s approach to junkets in light of recent changes in Macau and the scandals related to the Crown Resorts and Star Entertainment Group casinos in Australia.
Since the opening of the two IRs in 2010, Singapore has had many detractors claiming that its regulatory system is too strict and rigid to allow its gaming industry to blossom. Yet, the industry is one of the most successful in the world. Thorough investigations of the probity of casino and key employee license applicants and international market agent (junket) license applicants constitute industry best practice and should be applied wherever feasible.
The recent establishment of the GRA as a single agency, with full law enforcement powers responsible for regulating the entire gambling landscape in Singapore, is a model that might be appropriate for other smaller gaming jurisdictions. Establishing one sole regulator focused entirely on gambling prevents cross-agency disputes over “territory” while providing the requisite manpower and resources and the power to liaise with overseas law enforcement counterparts where necessary. The prescriptive approach adopted by the Singapore government seems to fit this jurisdiction’s needs: for more than a decade this methodology has successfully managed to exclude organized crime from the IRs and has generally resulted in the government and regulators avoiding embarrassment or scandal relating to the IRs, in stark contrast to some other jurisdictions that initiated a more relaxed, risk-based regulatory system.
Finally, the Singapore government was keenly aware in 2005 that establishing a gaming industry was deeply unpopular with the majority of its citizens. One of the methods of ameliorating public sentiment was to ensure that Singapore launched appropriate and pioneering Social Safeguards programs, including the first third-party family exclusion programme. Singapore pioneered an entry system that required Singapore citizens and permanent residents to pay a daily or annual entrance fee to enter the casino areas of the IRs. As a result, Singapore is now considered to be a gaming jurisdiction that has led globally with its socially responsible gaming programs and policies that have rivalled many more mature gaming markets. Moreover, exclusion orders and entry bans have proven an effective means of control for entry to the casinos.
Conclusion
As with any well-regulated jurisdiction, the onus now remains on policy makers and regulators to continue to update legislation and regulations, and for the GRA to constantly monitor its licensees to ensure that all the hard work undertaken to date is not undone. The big picture is that Singapore has demonstrated since the inception of legalized gaming that effective regulation and IR profits can be a strong option for public policy makers throughout Asia.