When casinos came to Singapore

On a visit to Singapore in April this year, I learned that this prosperous citystate, known for its ethic of hard work and clean living, has finally opened its doors to casinos.  “They’re really meant for visitors than for the locals,” the taxi driver told me, sounding almost defensive.  Locals and permanent residents, he said, have to pay a levy of S$100 per day (or S$2000 a year) to enter the gaming rooms. Tourists only have to show their passports.

It had taken more than twenty years for the Singaporean leadership to reconsider its longstanding aversion to casinos.  Singapore isn’t exactly known for liberal and free-wheeling debate. But on this question, people were encouraged to speak up.  And many did, sensing that the top leadership itself was of two minds about the wisdom of this policy shift.  After carefully weighing the expected economic benefits against the social costs, Prime Minister Lee Hsien Loong faced Parliament on April 18, 2005 to recommend legislation permitting “integrated resorts” with a gaming facility to operate in Singapore.

We have much to learn from the way Singaporetackled the issue of casinos.  First of all, the issue was never just about casinos, but about what the country needed to do to become competitive in a fast-changing global environment.  The government did not need the casinos to raise money.  That much was clear from the start.  What the government needed to do was to inject a new vitality into the economy — specifically tourism, and, with it, all the associated businesses on which Singapore heavily relies – airlines, hotels and restaurants, shopping malls, entertainment centers, banks, transportation, etc.

Casinos as such were not essential to this strategy. The government did not favor stand-alone gaming halls that offered nothing but gambling.  What drewSingapore’s interest was the concept of the “integrated resort,” in which the casino formed but a small, albeit central, component.  The IR is a complex that could include a theme park, a cluster of hotels and restaurants, convention amenities, recreational facilities, shopping malls, museums, theaters and movie houses, and so on.

Not having had previous experience in this area, the government requested interested parties to submit a concept of what they could build in two designated places – the Marina Bayfront and Sentosa. Nineteen different concepts were submitted, and from these, the government chose the most attractive and invited their proponents to submit firm proposals. Again, from the beginning, the government had no plan to operate these facilities. Neither did it want the casino component to define the character of these projects.  It acknowledged the apprehensions and objections of religious and civic groups, instead of dismissing these out of hand. When it was time to decide, the Prime Minister took full responsibility, explaining in the clearest language possible what made him change his own initial position on the matter.

“(T)he Government has to balance the economic pluses against the social fallout and the intangible impact on values, and make an overall judgment whether to proceed.  For the Government, the key consideration is what serves our national interest in the long term.”

First, he explained what Singapore stood to gain from these integrated resorts-cum-casinos. Essentially, they would be a magnet for expanded economic activity.  They would create jobs and enhance the image of the city as an exciting tourist destination and cosmopolitan hub.  The actual share of government revenue from these operations seemed peripheral; it was not even mentioned by Mr. Lee in his speech.  The rest of his statement to Parliament engaged all the objections and reservations about hosting casinos, as if he was trying to allay his own apprehensions.

“(T)here is no doubt that the IRs will be a major plus for Singapore.

However, our considerations cannot just be economic.  We must also address the non-economic issues – tangible minuses like an increase in problem gambling and broken families, and intangible losses like the impact on Singapore’s brand name and social values.”  He answered all these objections point-by-point and in great detail, making no attempt to reduce the immense complexity of the decision he had made by rhetorical means.

He said that his Cabinet came close to banning all Singaporeans from gambling in the casinos, but eventually opted to allow entry to locals who were willing to pay a high entrance fee.   If excluded, they might just go somewhere else to gamble, he noted. If they can afford to gamble, then they can afford to pay the levy. But the casinos will not be allowed to extend credit to locals.  This is to discourage impulsive and compulsive gambling.  More important, a system of exclusions will bar those with financial problems, and those on financial assistance.  Close kin may also ask the authorities to ban close family members who have a gambling problem.  The basic principle guiding these policies is that gambling is an expense, and not a way to make a living.

Unlike the Philippine government, the Singaporean government, which runs a broad range of state corporations, has no interest in operating casinos as revenue-generating enterprises.  Yet it accepts their growing importance as magnets of global tourism and business.  On this basis, it has carved a middle ground that assigns a limited place to casinos in its city, even as it continues to espouse the values of thrift and hard work among its people.