Straightening the Straits Times (11)

By | March 29, 2005

Sometimes I wonder. Should our government weed out all the middle management civil servants and listen directly to the people? But then another thought struck me. Something even more cynical and scary. What if, the government has already heard but does not care? Such seems to be the case in the casino “debate”. Will the casino proposal get the nod on April 18? You bet!

Money talks
Let me state categorically that I’m in favour of a casino. It’s a quick and dirty way to get rich. Did I say dirty? Oh well. I’m not going to take a moral high ground here. After all, what does God think of money? Just look at the people he gave it to!

Much of the current debate centred on the economic benefit that a casino would bring. However, US investment bank Morgan Stanley has suggested in a report that a mega-resort could still hit the jackpot in Singapore even if it does not have a casino. (“Fiscal argument for casino here overplayed” – ST, Mar 8)

The Morgan Stanley report questioned the assumption that a casino would attract large numbers of foreign punters and provide funds to cross-subsidise other attractions in the resort. Even in Las Vegas in the year ended June 2003, only 9% of casino visitors were foreigners, the report highlighted. With Macau enjoying first-mover advantage, having opened up its gaming industry to foreign operators in 2002, “Singapore’s proposed casino would by itself struggle to attract a critical mass of foreign clientele, thus undermining the economic logic of this project”.

Furthermore, the report called the cross-subsidisation argument “somewhat shaky”. Referring to The Atlantis in Bahamas, a model the Singapore government has cited, the report argued that if the resort’s non-gaming components command a price premium and generate profits, “it detracts from the need for cross-subsidisation to attract tourists”. In the case of The Atlantis, the report pointed out, non-gaming revenue accounts for over 70% of total revenue and there does not appear to be any cross-subsidisation for accommodation and food, both of which had sizeable profit margins of 84.2% and 33% respectively in 2003.

Damage control
As if to contain the damage done by the Morgan Stanley report, our “venerable” national daily put out another spin by a friendlier party a week later. The article, “Casino resort will bring in $3.4b a year” (ST, Mar 16), quoted another US investment bank Merrill Lynch as saying that a mega-resort in Singapore will bring in $3.4 billion a year in revenue, add $1.4 billion to the government’s coffers in taxes annually, and provide an immediate stimulus for the construction and tourism sectors.

Merrill Lynch’s upbeat report, however, assumes that the resort is enjoying a 50-50 revenue share from gaming and non-gaming activities. Unfortunately, this revenue model goes against the integrated resort vision touted by the Singapore government.

In defending its optimism, Merrill Lynch’s analysts could only vaguely say that the proposed project will be a huge draw because it is “iconic”. How “iconic” fits into the whole equation is anybody’s guess.

The report also said that Singapore is a more convenient location for Malaysians, Thais and Indonesians than Macau and Australia. I wonder how Malaysians and Thais feel about Genting Highlands. As for Indonesians, despite the ban on gambling establishments, there are at least three casinos on the tiny island of Batam. In fact, Singaporeans account for 80% of the revenues at Batam’s illegal casinos. With the Singapore government planning to impose a fee of S$100 a day or S$2,000 a year for locals wanting to try their luck in the proposed casino, it is unlikely to stem the estimated S$1.19 billion leaked overseas by Singaporeans gambling in Indonesia, Genting Highlands and on cruise ships outside Singapore. On the other hand, if it does manage to stem the tide, then we will have to worry about locals having such convenient access to gambling facilities.

Nevertheless, Merrill Lynch’s report went on to say that the additional $1.4 billion in taxes generated by the resort could deal with the social consequences of gambling, an area that “has not been addressed”.

As if on cue, Singapore’s prime minister Lee Hsien Loong addressed the issue three days later during an hour-long dialogue session at the 50th anniversary of the National University of Singapore Society. In the news report, “If casino gets nod, social costs will be managed” (ST, Mar 20), PM Lee conceded that more social support and services would be in order should the government decide to go for a casino. For instance, it could build a centre “where we can deal with these gambling cases, counsel them, treat them, research it, and find ways to keep it to a minimum”.

What Merrill Lynch and PM Lee fail to realise is that a government counting on taxes from this ill-gotten revenue is necessarily at odds with the very people whose wellbeing it is supposed to protect. Furthermore, according to Robert Goodman, author of “The Luck Business”, in most cases problem gamblers are actually costing communities more money in other economic sectors than they are contributing to communities on the casino end. These gamblers spend money in casinos that should be going to pay bills or buy groceries for their families; they write bad cheques; they may steal or embezzle money to pay off gambling debts or to fuel their habit.

And it is not so easy to manage the social costs, as PM Lee seems to suggest. At least not just by building a rehabilitation centre, or something to that effect. It will cost the state money to prosecute and correct those gamblers who do break the law. All of these actions, Goodman explains, add up to financial loss for somebody else.

The new face of gambling
According to the Catechism, “Games of chance (card games, etc.) or wagers are not in themselves contrary to justice. They become morally unacceptable when they deprive someone of what is necessary to provide for his needs and those of others.”

Of course, some would argue that a casino is really just another form of entertainment. It’s not gambling. It’s gaming.

Even Steve Wynn, Mirage Resorts Inc’s chairman, who instigated the gambling industry’s makeover, is reported to have had a face-lift and liposuction. But the fact remains that while the gambling industry may have a new face and a new name, it doesn’t have a new game. For as long as we know it, the game has always been about people losing their money.

Interestingly, a 1996 report on gambling by E. L. Grinols and J. D. Omorov, called “Development or Dreamfield Delusions? Assessing casino gambling’s costs and benefits”, highlighted that problem gamblers (i.e. people who are mentally and emotionally troubled) provide an outrageously disproportionate amount of casino revenues.

According to the study, between 30-50% of the money collected by casinos every year comes from just 4% of the population. Therefore, even though the gambling industry may market itself as just another form of entertainment, it is doubtful whether casino operators can be trusted to earnestly seek or provide help for their troubled patrons, who account for the bulk of their business. Any call for casino operators to regulate themselves will definitely fall on deaf ears.

So how should we deal with the casino issue? PM Lee has ruled out a referendum or a full debate in parliament, a clear indication of how much the ruling party is willing to listen. However, there is no harm in establishing an independent commission to investigate the social and economic impact of casino gambling so that, when faced with the issue, the government will be able to make informed decisions. After all, we are responsible for getting our country on track, if not for ourselves, then for our children and grandchildren.

Need more cloud storage for your files? Keep everything in sync with MEGA.
Get started with 20GB free!

Leave a Reply

Your email address will not be published. Required fields are marked *