For casinos, strict rules to live by (Singapore)

Today Online October 17, 2005

For casinos, strict rules to live by
Operations to be reviewed in three years; more casinos could come up in future

Val Chua
val@newstoday.com.sg

SOME eyebrows were raised yesterday as the Ministry of Home Affairs posted a 137-page Casino Control Bill online for public feedback. It contained several proposals that took industry watchers by surprise.
.
One of these called for a review of a casino’s operations no later than three years after it opens its doors. The newly-formed Casino Regulatory Authority (CRA) can then decide whether the casino’s licence can continue to be in force.
.
This proposal may not find much favour with the 12 bidders eyeing the Marina Bay and Sentosa integrated resort (IR) sites, said analysts.
.
“This rule will be very unpopular,” said an industry source who declined to be named. “The casino operator will be sinking in $2.5 billion to $3 billion in the site, and you’re telling them the licence can be taken away after you’ve built up the business.
.
“It will put some fear in the bidders.
.
“But I can understand why the Government is putting the rule in. It’s like insurance: It gives the Government the legal right to revoke  not that it necessarily will.”
.
The Government left open the possibility that more casinos could open in Singapore in the future.
.
The draft Bill said that the CRA will ensure there are not more than two licenced casinos during the initial 10-year period.
.
It stops short of saying how for long a licence would last, although market talk is that it could span 30 years. The authority may, from time to time, redefine the boundaries of a casino, added the Bill.
.
“Opening up the market to more competition after 10 years is fair. If the casino market booms in Asia, and we are tied to only the two casino operators, then Singapore will lose out,” said the industry source.
.
As expected, locals and Permanent Residents will have to pay a levy of $100 a day to enter a casino. They will be extended credit only if they maintain a deposit account of at least $100,000 with the casino operator.
.
The Government has made it clear that it wants crime-free casinos.
.
The CRA will also monitor the casino operations and gaming equipment closely. It will also take a hard look at the operators, employees and even suppliers.
.
It can weed out any naughty business, as it can end any relationship that is deemed to affect the “suitability” of the operator.
.
“Special” employees, such as those counting money, must apply to the CRA for a licence before they can work in a casino. The same applies to junket operators, who earn commissions from bringing in the high-rollers.
.
The law may also require casino operators to give CRA “advance notice” of any junkets, including detailed information, such as the itinerary of the trip.
.
Said an observer: “The casino operator may not like this. They may argue that high-rollers just fly in overnight  how can one give advance notice?
.
“But, of course, junket operations are also where the dirty money comes in.”
.
According to Merrill Lynch, some 36 per cent of the projected revenue from VIP players in Macau  amounting to US$1.4 billion ($2.4 million)  is believed to come from “corrupt government officials” in China.
.
The draft bill comes a month before the final guidelines  the Request for Proposals (RFP)  for the Marina Bay site are issued to bidders.
.
Twice delayed, the launch of the RFP will not be postponed any further, assured Second Minister for Trade and Industry Dr Vivian Balakrishnan in Parliament yesterday.
.
Other significant rules: Losers are legally bound to pay winners, and where disputes arise between casino operators and their customers, the CRA has the powers to investigate and arbitrate.
.
Disciplinary action launched against a casino operator who, for example, obtains a licence improperly, could also attract fines of up to $1 million.
.
Also, nobody can be an indirect shareholder or accumulate large stakes in a casino without Government approval.
.
The draft bill also lists out who can issue exclusion orders to ban certain patrons from entering the casino. Names of criminals and suspects must go through the Police, while problem and vulnerable gamblers will be governed by the National Council on Problem Gambling. Also, those below the age of 21 will not be allowed to enter the casino.
.
Observers say the comprehensive draft bill is a step in the right direction.
.
Casino analyst Jonathan Galaviz, partner of Globalysis, described it as “thoughtful” and “robust”.
.
Said Mr Galaviz: “From a global perspective, Singapore’s draft Casino Control Bill is extremely well thought out and provides an excellent framework for the regulation of this new industry.”
.
The draft bill can be found on http://www.feedback.gov.sg
Operations to be reviewed in three years; more casinos could come up in future

Val Chua
val@newstoday.com.sg

SOME eyebrows were raised yesterday as the Ministry of Home Affairs posted a 137-page Casino Control Bill online for public feedback. It contained several proposals that took industry watchers by surprise.
.
One of these called for a review of a casino’s operations no later than three years after it opens its doors. The newly-formed Casino Regulatory Authority (CRA) can then decide whether the casino’s licence can continue to be in force.
.
This proposal may not find much favour with the 12 bidders eyeing the Marina Bay and Sentosa integrated resort (IR) sites, said analysts.
.
“This rule will be very unpopular,” said an industry source who declined to be named. “The casino operator will be sinking in $2.5 billion to $3 billion in the site, and you’re telling them the licence can be taken away after you’ve built up the business.
.
“It will put some fear in the bidders.
.
“But I can understand why the Government is putting the rule in. It’s like insurance: It gives the Government the legal right to revoke  not that it necessarily will.”
.
The Government left open the possibility that more casinos could open in Singapore in the future.
.
The draft Bill said that the CRA will ensure there are not more than two licenced casinos during the initial 10-year period.
.
It stops short of saying how for long a licence would last, although market talk is that it could span 30 years. The authority may, from time to time, redefine the boundaries of a casino, added the Bill.
.
“Opening up the market to more competition after 10 years is fair. If the casino market booms in Asia, and we are tied to only the two casino operators, then Singapore will lose out,” said the industry source.
.
As expected, locals and Permanent Residents will have to pay a levy of $100 a day to enter a casino. They will be extended credit only if they maintain a deposit account of at least $100,000 with the casino operator.
.
The Government has made it clear that it wants crime-free casinos.
.
The CRA will also monitor the casino operations and gaming equipment closely. It will also take a hard look at the operators, employees and even suppliers.
.
It can weed out any naughty business, as it can end any relationship that is deemed to affect the “suitability” of the operator.
.
“Special” employees, such as those counting money, must apply to the CRA for a licence before they can work in a casino. The same applies to junket operators, who earn commissions from bringing in the high-rollers.
.
The law may also require casino operators to give CRA “advance notice” of any junkets, including detailed information, such as the itinerary of the trip.
.
Said an observer: “The casino operator may not like this. They may argue that high-rollers just fly in overnight  how can one give advance notice?
.
“But, of course, junket operations are also where the dirty money comes in.”
.
According to Merrill Lynch, some 36 per cent of the projected revenue from VIP players in Macau  amounting to US$1.4 billion ($2.4 million)  is believed to come from “corrupt government officials” in China.
.
The draft bill comes a month before the final guidelines  the Request for Proposals (RFP)  for the Marina Bay site are issued to bidders.
.
Twice delayed, the launch of the RFP will not be postponed any further, assured Second Minister for Trade and Industry Dr Vivian Balakrishnan in Parliament yesterday.
.
Other significant rules: Losers are legally bound to pay winners, and where disputes arise between casino operators and their customers, the CRA has the powers to investigate and arbitrate.
.
Disciplinary action launched against a casino operator who, for example, obtains a licence improperly, could also attract fines of up to $1 million.
.
Also, nobody can be an indirect shareholder or accumulate large stakes in a casino without Government approval.
.
The draft bill also lists out who can issue exclusion orders to ban certain patrons from entering the casino. Names of criminals and suspects must go through the Police, while problem and vulnerable gamblers will be governed by the National Council on Problem Gambling. Also, those below the age of 21 will not be allowed to enter the casino.
.
Observers say the comprehensive draft bill is a step in the right direction.
.
Casino analyst Jonathan Galaviz, partner of Globalysis, described it as “thoughtful” and “robust”.
.
Said Mr Galaviz: “From a global perspective, Singapore’s draft Casino Control Bill is extremely well thought out and provides an excellent framework for the regulation of this new industry.”
.
The draft bill can be found on http://www.feedback.gov.sg