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The
Straits Times, 24 Apr 04
High-stake gamble over casinos
If casinos start mushrooming across Asia, regional tourism could win
big. But as Singapore and other nations consider tapping into the
billion-dollar gambling industry,
LING CHANG HONG of the Foreign Desk discovers there is more at stake
than a pile of cash
THE chips are piling up fast across Asia as countries in the region
race to snare their share of casino dollars. Gambling industry spokesmen
and analysts argue compellingly that casinos are a sure bet for padding
government coffers for the greater good, but sceptics say the social
cost and inevitable crime outweigh the benefits.
Meanwhile, the numbers in the Asian industry, comprising a few major
commercial casino resorts and tens of thousands of shady, hole-in-the-wall
gambling dens, are big and growing more attractive. Manila-based investment
firm Sinorex Holding estimates that the region's illegal gambling
industry is worth at least US$13 billion (S$22 billion) a year. And
Malaysia-based gaming consultancy Jayport Holdings says Asia's legitimate
casino industry is worth US$4.1 billion and will grow by an estimated
6 per cent a year for the next 20 years.
Singaporeans will know at the end of the year if the Government will
allow a casino on the Southern Islands, but the Thai Parliament has
already endorsed legalising casinos in the kingdom. Taiwan and Japan
are also keen to allow casinos to cash in on a market now dominated
by Macau, South Korea, the Philippines and Malaysia. And considering
China, where a robust economy is fuelling a burgeoning middle class
of big spenders, it is not surprising that governments are being lured
to place their bets on this new venture.
A Far Eastern Economic Review report said that by 2010, Asians are
expected to spend US$23 billion in casinos worldwide, up from US$8
billion in 2000. 'Consumers are getting more disposable income, they
want to spend it,' said Mr Sean Monaghan, director of gaming and wagering
research at ABN Amro, Australia. 'But apart from high-quality casinos
like those in Genting Highlands in Malaysia and on board Star Cruise
ships, there is generally not enough supply across the region,' he
told The Straits Times.
Analysts say expanding Asia's gaming market will boost tourism, as
casinos provide an additional form of entertainment for tourists.
'Asia is already a popular tourist destination - friendly people,
beautiful beaches, low prices. So an Asian Las Vegas would only serve
to attract more tourists,' said Mr Ted Loh, managing director of online
gaming consultancy Orientgaming.com.
In fact, developing the casino scene will help keep Asian tourists
within the region, industry players say. 'Asians no longer have to
fly great distances to Las Vegas and Australia,' Mr Monaghan said.
Keeping the tourist dollar at home 'obviously benefits the Asian countries',
he added.
The tourist dollar was what the Singapore Government had in mind when
it announced last month that it was looking into building a casino
resort. Analysts believe Singapore is on the right track. 'If Singapore
decides not to legalise casinos and other countries do, then tourism
will flow to the other markets and Singapore will lose out,' said
Mr Monaghan.
New casinos also mean new jobs and extra government revenue. According
to Mr Ross Ferrar, executive officer of Australian Gaming Machine
Manufacturers' Association (AGMMA), casinos in Australia pay more
than A$500 million (S$621 million) annually to the government in gaming
taxes. The annual casino gaming revenue of more than A$2.5 billion
creates an estimated 50,000 jobs in the country, Mr Ferrar said.
Insiders estimate that Macau's gaming industry, which is undergoing
a Las Vegas-style makeover, will see at least five new casinos create
about 22,000 jobs over the next few years. By legalising the gaming
industry, advocates say, the government can put new tax revenues -
money which would have gone to crime syndicates - to good use. Charity
funds could be set up, education provided for the poor, and even assistance
given to those with gambling problems.
It all sounds very appealing, so what's the downside? While casinos
are no doubt cash cows, there are social ills associated with gambling.
In Britain, where an intense debate continues about plans to ease
gambling regulations, the government has been warned that the number
of gambling addicts could double to 750,000 if plans to allow Las
Vegas-style casinos proceed. 'There are major mental health problems
and poverty problems associated with the expansion of gambling,' warned
Mr Geoff Rayner of the Public Health Association. 'If you are putting
a proportion of your very meagre income into gambling, you are not
actually providing other things like fresh fruit and vegetables to
your children,' he told BBC Radio.
His views were echoed by Dr Jacky Chambers, director of public health
for the Heart of Birmingham Primary Care Trust. 'It makes sense that
more gambling means more people are going to lose money and get into
debt which is a major cause of stress, anxiety, depression and family
conflict,' she said.
The same worries have been voiced in Singapore over the moral and
social consequences of a casino, despite government assurances that
controls would limit access to Singaporeans and prevent organised
crime.
But some say it would be difficult to totally shield Singaporeans
from gambling's social fallout. 'I find it hard to be persuaded that
we could insulate Singaporeans if you have a casino for foreigners
only. 'Singaporeans would have to go to the casino to work... There
will be social implications,' said MP Irene Ng this week.
Others argue that the plan to impose income thresholds for casino
patrons smacks of elitism and discrimination, nudging Singapore towards
a wealth-conscious, class-based society.
But National University of Singapore sociologist Tan Ern Ser dispelled
such concerns, saying that 'the private club concept is not alien
to Singaporeans'.
Minister of State for Trade and Industry Vivian Balakrishnan told
Parliament this week that the casino consideration was targeted at
the rich and famous, as part of a strategy to broaden Singapore's
tourism offerings.
But Mr Monaghan questioned the feasibility of such a plan. 'How do
you define a high roller?' asked the Sydney-based analyst. He pointed
out that some clubs in Britain had required patrons to register 48
hours in advance before they were allowed into a casino, but that
did not work. 'It was just too cumbersome, especially for tourists,'
he said.
The safest bet, experts say, is to have a regulated market in which
government-licensed casino operators are subject to constant comprehensive
probity and integrity checks. 'Legislative and regulatory requirements
demand continuous compliance and are regularly audited,' AGMMA's Mr
Ferrar told The Straits Times.
In Britain, casino clubs must adhere to the UK Gambling Act, which
specifies stringent credit guidelines to ensure patrons gamble within
their means. Mr Monaghan said that under a regulated system, any adult
aged 18 and above is allowed to visit a casino.
But the society will provide assistance for people with gambling problems.
'It's important to have a solid infrastructure,' he said. In Nevada,
where Las Vegas is located, the government regulates the activities
and associations of American casino operators everywhere in the world.
This means that giant casino operators like Wynn, Galaxy and Adelson
- which are investing in Macau - not only have to abide by the rules
set by the Macau government, but also those by the Nevada government.
'The Nevada regulations tell the US licensees that they must associate
only with 'suitable' partners when they do business overseas,' the
Review reported this month.
It is also illegal for anyone other than banks and credit-card issuers
to grant credit in Macau, the report added. In Las Vegas, those with
criminal records are banned from working in casinos and engaging in
any casino-related businesses. Such stringent regulations serve to
ensure that organised crime syndicates linked to gambling are weeded
out, said Orientgaming.com's Mr Loh.
Industry pundits will meet in Singapore next month for a conference
on Asia's gaming industry and to offer advice to potential new entrants
such as Singapore. |
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