Channel NewsAsia , 18 Apr 04

Asia poised for casino boom as governments look for safe bet
from AFP

Asia's legal gambling industry is poised to boom with a spate of new casinos as governments around the region seek to haul in the billions of dollars circulating through the unlicensed system, analysts say.

Singapore's announcement last month that it is considering allowing a casino on its popular Sentosa tourist island is the latest in a string of moves by governments around the region to expand legalised gambling, they say.

In Thailand, Prime Minister Thaksin Shinawatra has said private businesses will be allowed to set up casinos if a national referendum on the proposal, due to be held this year, is approved by a simple majority.

Japan and Taiwan are also moving towards legalising casinos, with the first Japanese school for croupiers due to open this month in Tokyo in anticipation of the development. Up for grabs is a share of the incredibly lucrative illegal gambling industry, which gaming consultant Kelvin Tan, from Manila-based investment firm Sinorex Holding, said was worth at least 13 billion US dollars a year. "Look at how illegal gaming has thrived in China, Vietnam and even Singapore. It indicates a lot of room for legalised gaming to grow," Tan told AFP.

Recent surveys on gambling habits in Thailand typify Asians' determination to pursue their love of the punt, regardless of whether it is sanctioned by law. One study by the respected Chulalongkorn University found Thais lost up to 518.6 billion baht (12.2 billion US dollars) in 2001 to underground lotteries, overseas and illegal local casinos, soccer betting and other illicit gambling.

Another survey, conducted by the Thai Farmers Bank in December last year, found Thais from Bangkok alone spent up to eight billion baht each month on gambling. An estimated 500,000 Thais flock every year to casinos across the border in Cambodia, Laos and Myanmar, many of which operate in a grey area of legality and government-linked corruption, according to academics in Thailand.

The director of gaming and wagering research at ABN Amro in Australia, Sean Monaghan, told AFP that, aside from the enormous revenues on offer, governments were keen to legalise casinos to cut down on corruption. "There are a lot of illegal casinos operating across the region... profits from these are going into organised crime. If governments legalise the industry, it will help to remove the crime," Monaghan said.

The Chulalongkorn University study also found that about five percent of all money lost by Thais went into the pockets of corrupt politicians and police officers. However, there is a strong counter-argument centred on the social ills that casinos fuel, and the signal given to society when governments sanction a vice that can lead to serious personal problems.

In Singapore, the government has long opposed the opening of a casino on moral grounds. It has hinted only wealthy locals and foreigners will be allowed into the Sentosa casino if it gets the go-ahead. And highlighting the fact that legal casinos do not necessarily eliminate organised crime, the Singapore government last year rejected a bid by Cambodia's sole registered casino operator, Nagacorp, to list on the stock exchange here partly because of money laundering concerns.

But many analysts believe the easy money on offer will inevitably seduce many governments around the region. Sinorex's Tan said the legal gambling industry could easily double its revenues, which he estimated at 13 billion US dollars a year, over the next decade if governments proceed with their expansion plans.

While Monaghan said it was unclear exactly how much revenue was generated from legal gambling, he said the industry could triple its takings. "If a whole lot of countries are to legalise the industry, the potential to consumer spending is massive -- potentially three times the size at least," he said.

The publisher of Las Vegas-based Global Gaming Business magazine, Paul Dworin, said 85 percent of Asia's legal casino industry was currently divided between the Philippines, Macau, South Korea and Malaysia. Of these, Macau is already undergoing highly publicised expansion plans, with US casino giants moving in after mogul Stanley Ho was forced to give up a long-time gaming monopoly in the former Portuguese enclave two years ago.