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Singapore Gambling Authority Means Business

Posted on May 20th, 2011

Gambling was first legalized in Singapore for a brief period in 1823 when it was a British colony. After three years, gambling again became illegal with the exception of Singapore Pools, a government-run lottery. Probably spurred by the development of tourism in neighboring countries like Malaysia, Thailand, Hong Kong and Macau, Singapore began to reconsider its ban on gambling. In 2005, the cabinet of Prime Minister Lee Hsien Loong decided to develop two casino-resorts, euphemistically referred to in Singapore as Integrated Resorts. The integrated resorts were to be constructed on Sentosa and Marina Bay.

Sentosa, whose name means “peace and tranquility” in Malay was once known as Pulau Blakang Mati, translated as “Island of Death from Behind”. An island of 5 square kilometers, half a kilometer from the main island of Singapore, it is the country’s fourth largest island, and boasts of a 3.2 kilometer white sand beach. The island has a long history as a military outpost, and played an important part in the country’s war efforts. In the 1970’s the government started to develop Sentosa as a holiday resort for the local citizenry and foreign tourists. Marina Bay is located in the Central Area in the southern part of Singapore. In the 1970’s, land was reclaimed at the bay to form the Marina Centre and Marina South areas. The Singapore River’s mouth was made to flow into the bay instead of directly out to sea.

The decision to legalize gambling and construct the integrated resorts was heavily and lengthily debated for six months throughout Singapore. Muslims and Christians, along with social workers, openly disapproved of the plan. They cited concerns about the negative social impact of gambling. Activists expressed fears that gambling would bring about criminal activities like money laundering, loan sharking and even usher in organized crime. While accepting the risks associated with integrated resorts, the government pointed out the need to boost the tourism industry of Singapore and make it more competitive with its Asian neighbors. The Prime Minister promised adequate safeguards to control the negative social impact of casino gambling. In spite of widespread opposition, including a petition with tens of thousands of signatures, the government decided to proceed with the plan.

Las Vegas Sands, one of the four companies or consortia that had submitted bids for the Marina Bay integrated resort was awarded the license for the Marina Bay Sands. Intended to be the centerpiece of Marina Bay, the complex, designed by Moshe Safdie, consists of three large shells housing conference halls and other business function rooms, three large hotel towers linked on their top floors by a 60-story high Sands Sky Park, and a centerpiece museum jutting out onto the bay. The hotel has 2,560 rooms and suites. With a total investment of over S$5 billion, it is one of the most expensive casino-resorts in the world and was officially inaugurated on June 23, 2010.

A consortium composed of Genting International/Star Cruises/Universal Studios, among two others, won the bidding for the Resorts World Sentosa. Scheduled for its grand opening on May 28, the integrated resort features attractions that include Universal Studios Singapore, a Marine Life Park, the Maritime Xperiential Museum and the Festive Walk. During the debate leading to the approval of the integrated resorts, among the safeguards imposed by the government were a steep entrace fee and a system of exclusion controls for Singaporeans. The Casino Control Act, passed to formalize the regulations governing gambling, prohibits the reimbursement of entrance fees paid by Singaporean citizens or permanent residents.

To enforce these and other restrictions, the Casino Regulatory Authority recently fined Resorts World Sentosa a total of S$530,000 for reimbursing the of entry fees of media reporters it had invited to cover events at the resort, plus a violations of a few other regulations. The action was a result of the government’s recent investigation of reported junket activities by the two integrated resorts. Resorts World Sentosa was also fined for failing to keep footage of surveillance cameras for the prescribed period, and for not installing a failure-notification system providing details of a failure in the cameras. With Singapore’s booming gambling market estimated at US$6 billion a year, analysts believe that the revenue of these integrated resorts could exceed that of the Las Vegas Strip’s by next year. The fine imposed on the Resorts World Sentosa is, in that context, petty cash for the business.