Casino Control Bill Proposed

December 2005

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Casino Control Bill Proposed When the development of integrated resorts in Singapore was first mooted by the government in March 2004, there was a flurry of responses both for and against. Concerns were raised as to the effect of a casino on the Singaporean work ethic and Singapore’s image as a safe and secure place. Social groups were especially concerned about the casino creating an increase in the incidence of problem gambling.

After considering the feedback, the government decided on 18 April 2005 to proceed with the project. As noted by Mr Wong Kan Seng, Minister for Home Casino Regulatory Authority of Affairs in his parliamentary speech on 14 April 2005, despite the risks Singapore involved, the significant economic and larger national interests necessitated ...... 1 this step. To deal with and minimise the risks, the government would ensure that the integrated resorts would be fully regulated. National Council for Problem Gambling In line with this assurance, a proposed Casino Control Bill (‘Bill’) was recently ...... 1 issued. The objectives of the Bill are to ensure that the casinos remain free from criminal influence or exploitation; gaming in the casinos is conducted Regulation Of The Casinos honestly; and the potential of casinos to cause harm to minors, vulnerable persons and society at large is minimised. It represents the result of the ...... 2 government’s examination of the risks involved and sets out measures that will seek to combat and control them. This Update will examine the measures Protecting The Patrons And proposed. Public-At-Large ...... 3 Council will have 10 to 12 members Casino Regulatory with expertise and experience in Control Of Crime Authority of Singapore public communications, counselling, ...... 3 The Bill proposes to set up a and rehabilitative treatment and Casino Regulatory Authority of services. The members will be Conclusion Singapore (‘CRAS’). This authority appointed by the Ministry of ...... 4 will focus on implementing and Community Development, Youth enforcing the provisions in the Bill and Sports for a two-year term.

as well as additional regulations The Council will provide advice on

pertinent to casinos and their programmes to promote public

operations. The key functions of awareness of problem gambling; CRAS are rule-making; licensing decide on funding applications for and investigation; inspection and preventive and rehabilitative enforcement; adjudication of programmes; and assess and disputes between the casinos and advise on the overall effectiveness patrons; and evaluation and audit of of the treatment, counselling and the casinos’ internal controls. rehabilitative programmes. From a Please feel free also to contact the regulatory perspective, the Council Knowledge & Risk Management National Council for will decide on applications for Group at [email protected] Problem Gambling exclusion of persons from casinos (discussed further under ‘Protecting A second body that will fall under The Patrons And Public-At-Large’ the regulatory purview of the Bill is below). the National Council for Problem Gambling (‘Council’). Already established by the Ministry of Community Development, Youth and Sports, it is envisaged that the

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Regulation Of The • gaming machines in the casino. Casinos Shareholders The regulation of the casinos will The casino operator will be subject take a multi-faceted approach, to a set of shareholder controls. where all interested parties will be These will require interested subject to regulation. Hence, in shareholders (both direct and addition to regulating the casino indirect) to apply to the Ministry of operator itself, CRAS will also Home Affairs to own shares in the monitor its employees, partners and casino operator above thresholds of various parties that are intimately 5%, 12% and 20%. involved in the operations or that Lau Kok Keng may hold leverage over the casinos. Employees The proposed measures for each Partner are set out below. The Bill will put in place a regulatory Casino Operators regime to ensure that only suitable Contact Details persons are allowed to work in casinos in Singapore. The proposed Direct: 6232 0765 Casino operators will be required to regime is similar to other Facsimile: 6533 1183 apply for and obtain a casino jurisdictions that have successfully E-mail: kok.keng.lau@ license from CRAS before they can contained the downsides of casinos. rajahtann.com run a casino in Singapore. Any such It will ensure that casino operations licence will be for a period of 10 remain transparent to the regulator. years. Only two such licenses will be granted and the largest Under this regulatory regime, shareholder of a casino operator important employees, such as those must not have interests in the other in managerial positions, and those casino. involved in the conduct of the games or counting of money, must Casino operators will be subjected apply to CRAS for a license before to a strict investigation process to they can work in a casino. Before assess their suitability to run issuing the license, CRAS will casinos in Singapore. CRAS will investigate the employee’s closely monitor the casino suitability. The employee will also operations and gaming equipment be required to report any changes in to ensure that gaming is conducted his situation that may affect his honestly and fairly in the casino. suitability to work in the casino. On Accordingly, it will review and audit its part, the casino operator must the operator’s internal controls report to CRAS the dates when the regularly to ensure proper operating licensed employee starts or stops procedures such as accounting, working in the casino. cash / chip movements and documentation. Finally, forgery of an employee’s licence or a special employee’s Various aspects of the casino form of identification, and operations will come under the impersonation of a special regulatory overview of CRAS. employee will be a criminal offence. These are: Casino’s Vendors, Supplier • the layout of the casino; And Agents • the games and number of games that may be played in CRAS will also monitor the casino’s the casino; relationship with its vendors, • gaming equipment for use in suppliers and agents. To do this, it the casino; and will implement a controlled contract system. A casino operator will need

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to seek CRAS’s approval for was comparable to Hong Kong – either the Minister for Home contracts of a prescribed type and 1.9% – and Macau – 1.8%). The Affairs or CRAS. The persons value before it can enter into them Bill proposes various methods to who may be affected by such (these will be prescribed in deal with this. orders are not limited to any regulations yet to be issued). This particular sector of the public. will cover not only the contracts Casino Entry Levy • The Council may issue an relating to the casino but the entire exclusion order against a integrated resort. Singapore citizens and permanent residents will be required to pay a person who has a gambling CRAS will have the right to require casino entry levy to enter the addiction if he requests for it or that the casino does not enter into casino. The levy will be S$100 per if an application is submitted by contracts with vendors and day or S$2,000 for annual a family member. It may also suppliers which are deemed membership. The operator will be issue an exclusion order unsuitable due to suspicious required to collect the entry levy and against a person if he is on backgrounds or known involvement forward it to the Singapore social assistance programmes, in criminal activities. It will also have Totalisator Board for public, social has a petition of bankruptcy, or the right to terminate any such or charitable causes. has a poor credit record. Such contracts if this is found to be orders will be for a duration to necessary to maintain the integrity Restricted Access To Money be specified in the order. of the casino’s operations. And Credit The casino operator may issue exclusion orders if requested by Junket Operators Casinos and their junket operators patron, or if the patron is not will only be allowed to extend credit welcomed in the casino. Such Junket operators who bring in to Singapore citizens or permanent orders will be for a duration to be premium players from overseas will residents who maintain with the specified in the order. be required to apply to CRAS for a casino operator a deposit account license to operate junkets. CRAS of at least S$100,000. Patrons will In addition, persons below the age will investigate the junket operator’s also be legally bound to repay the of 21 will not be allowed to enter the suitability and ensure it is of good lender the credit extended. casino. repute before issuing the license. In addition, the casino operator will be In addition, automatic teller Civil Remedies required to ensure that junket machines will be prohibited from operators comply with applicable casinos. This will help to deter Gaming contracts made in the laws and regulations. CRAS will be gamblers from drawing down on casino will be made enforceable in entitled to direct the casino operator their savings in the heat of the courts. Accordingly, gamblers will to terminate its relations with moment to pay for their gambling be legally bound to pay the winning unsuitable junket operators. habit. party in accordance with the Restrictions On Entry outcome of the game that they Protecting The participate in. Patrons And Public- The Bill provides powers to the In addition, where disputes arise At-Large following parties to issue exclusion between the casino operators and orders that will prohibit certain patrons, CRAS will be empowered A key focus of debate on the patrons from entering the casino: to investigate and arbitrate. This integrated resort was its propensity ensures that disputes can be • The Commissioner of Police to encourage gambling, particularly resolved expeditiously. This will also may issue exclusion orders among gambling addicts. Dr Vivian help provide assurance to foreign against criminals or suspects. Balakrishnan, Minister for patrons who may not stay in This will be a written order of Community Development, Youth Singapore long enough to bring unlimited duration, and will be and Sports, noted in his speech to their disputes to the courts. revocable only by the Minister Parliament on 18 April 2005 that for Home Affairs or the almost 58% of Singaporeans Commissioner of Police. Control Of Crime gamble at least once a year, and around 40% gamble regularly at • CRAS may issue oral exclusion Controlling Organised Crime least once a week. 2.1% of orders of 14 days’ duration or Singaporeans are vulnerable to written exclusion orders of An important aspect of ensuring that addiction to gambling (a figure that unlimited duration revocable by casino operations in Singapore

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remain crime free will be ensuring ensure security within the casino transactions will be adopted. To this that criminal elements and money premises. end, CRAS will require the casino to laundering syndicates do not record transactions of S$5,000 and Over and above such measures, infiltrate the casino operations. As above. Transactions of S$10,000 the Ministry of Home Affairs has noted above, CRAS will therefore and above and all other suspicious asserted that the police will screen the principal shareholders, transactions will have to be reported implement measures to ensure that directors, key managers and to CRAS. The casino will also be the overall law and order situation employees involved in gaming, not required keep all relevant records remains under control. Accordingly, just on a once-off basis but over for a minimum period of seven a dedicated Casino Investigation regular intervals. years. Branch within the Criminal In addition, the Ministry of Home Investigation Department will be Additional Criminal Offences Affairs has reassured Singaporeans established to detect and Under The Bill that strong action will be taken investigate crimes that take place in against any criminal syndicate the casino. Finally, the Bill establishes the leaders, whether local or foreign, There will be a regular police following as criminal offences under who try to exploit the presence of presence on the periphery of the the Bill: casino operations, including casino to deter robbery and snatch detaining such persons under the • possession of things which may theft cases, as well as to prevent Criminal Law (Temporary be used to cheat; the proliferation of vice and illegal Provisions) Act and confiscating money lending activities. Where • tampering with gaming their ill-gotten gains under the necessary, CCTV systems will be equipment; Corruption, Drug Trafficking and installed in the surrounding areas to other Serious Crimes (Confiscation • forgery or counterfeiting of enhance security. The police will of Benefits) Act. chips, chip purchase vouchers; also build up its intelligence and Control Of Ancillary Criminal capabilities and strengthen And Illegal Activities cooperation with other police forces • possession of chips exceeding to exchange information and a certain value outside the casino premises. In addition, to minimise the intelligence on gaming syndicates proliferation of criminal and illegal and other related criminal activity. activities that may spring up around The police will also take sustained Conclusion casino activities, the casino enforcement actions against Despite the downside risks inherent operator must take all appropriate prostitution, adopting a zero- in the integrated resorts, as noted steps to prevent conduct such as tolerance approach towards women by Prime Minister Lee Hsien Loong, soliciting for the purposes of soliciting in the areas around the the decision on the integrated resort prostitution, unlicensed casino. concerns the interests of Singapore moneylending and drunken, Control Of Money over the next 10 to 20 years. Its disorderly or riotous behaviour in a impact will be both economic and casino. In addition, it will be Laundering social. The Bill effectively seeks to required to set up a dedicated address the social ills that may security team and a comprehensive To combat money laundering arise. CCTV surveillance system to activities, international best practices in tracking suspicious

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The information contained in this Update is correct to the best of our knowledge and belief at the time of writing. The contents of the above are intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice for any particular course of action as the information above may not necessarily suit your specific business and operational requirements. It is to your advantage to seek legal advice for your specific situation. In this regard, you may call the lawyer you normally deal with in Rajah & Tann or e-mail the Knowledge & Risk Management Group at [email protected].

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