Play Your Cards Right: Singapore’s Approach to Gambling Regulation

Gan Xin Chen and Kevin Chew
5 days ago
10 min read

Credits to Unsplash (Unsplash: Aidan Howe) https://unsplash.com/photos/playing-cards-on-brown-wooden-table-xrR-Kr2zppo

In this Explainer, find out...

Why did the Government decide to legalise licensed casinos in a change of policy?
What steps did the Government take to safeguard against problem gambling?
What lessons can be learnt from the approaches towards gambling in other countries?

Introduction

Who will be the next Pope? Which football team will win the next World Cup? What will drop from this next loot box? Today, one can encounter the practice of gambling in virtually any corner of life — be it in gacha games, sports tournaments or even the papal conclave. Likewise, Singapore has not been exempt from the prevalence of gambling.

In a bid to simultaneously mitigate the social ills of gambling and reap the economic fruits of casinos, Singapore has adopted a unique approach to gambling regulation. This Policy Explainer will examine how Singapore’s gambling policies have changed over time, and compare its approach to neighbouring countries.

From Colonial Cards To Contemporary Casinos

Gambling in Singapore’s History

Singapore has been no stranger to gambling. In the 19th century, unregulated gambling proliferated amidst the British colonial government’s fluctuating stance on gambling legalisation. Following Singapore’s independence, the newly formed Government adopted a stricter approach to gambling. Regulations were tightened so that gambling activities were largely limited to only a few government-run services. In order to curb illegal gambling, the Government established Singapore Pools as the sole legal lottery operator in 1968. Singapore Turf Club served a similar function of providing a legal avenue for horse racing betting. For the rest of the 20th century, the Government maintained its policy of banning casinos and criminalising most forms of gambling.

An End to the Casino Ban

However, at the turn of the millennium, the Government began reconsidering the blanket ban on casinos. In 2004, the Ministry for Trade and Industry (MTI) proposed the development of Integrated Resorts (IRs) which would comprise casinos, hotels, recreational establishments and business facilities.

This proposal emerged amidst growing concerns over Singapore’s standing as a tourism hub. While neighbouring countries had natural landmarks and heritage sites, the Little Red Dot lacked such appeal to tourists. Singapore’s share of tourism in the Asia–Pacific region had shrunk from 8 per cent in 1998 to 6 per cent in 2002. Hence, in a bid to enhance Singapore’s regional competitiveness, MTI mooted the idea of building casinos within IRs. The hope was that this would boost the tourism industry and create more jobs in adjacent sectors of the economy (e.g., the hospitality and aviation sectors).

After much debate, the Government proceeded with its plan to legalise casinos. In 2005, former Prime Minister Lee Hsien Loong announced the decision to develop two IRs in Marina Bayfront and Sentosa. He explained that a casino would be a “small but essential part” of an IR — the revenue generated from the casino would make the infrastructure project financially viable. Though it was likely that casinos would grant Singapore substantial economic advantages, members of the public had some concerns.

Objections to Casino Legalisation

There was significant public opposition to the decision to legalise casinos. Objections were raised on three main premises:

Social implications of gambling;
Singapore’s brand name; and
Values and religious principles.

First, there was concern that the casinos could bring about great social harm. Designed to keep gamblers inside as long as possible, casinos are unique in the way they can encourage gambling addiction. When people engage in excessive gambling, they can cost their communities in the form of bankruptcy, lost productivity, dependence on welfare, crime and the suffering of their families.

The second worry was that the casinos could tarnish Singapore’s brand name. Internationally, Singapore has a reputation for its safe streets and rule of law. The development of casinos could jeopardise this status, should it be accompanied by problems like organised crime, loan sharks and money laundering.

Third, opponents asserted that the casinos could undermine cultural values of thrift and hard work. To them, the legalisation of casinos could encourage Singaporeans to believe that the way to financial success is to be lucky at the gaming tables. Various religious groups also voiced their objections, considering gambling contrary to their teachings.

Doubling Down On Responsible Gambling

In response to the concerns raised, the Government tightened gambling regulations and strengthened safeguards. The goal was to minimise the social costs of casinos and gambling addiction.

Mitigating the Social Impacts of Casinos

First, to address the social implications, the Government introduced measures to deter Singaporeans from gambling at local casinos. Crucially, Parliament passed the Casino Control Act in 2006. The law established the Casino Regulation Authority (CRA), which oversaw the licensing and regulation of casino operations. High entrance fees of S$100 per day and S$2,000 per year were charged for Singapore citizens and permanent residents. Since 2019, these fees have been raised to S$150 daily and S$3,000 annually. Additionally, casinos are not allowed to loan money to locals, to make it harder to engage in excessive gambling.

The National Council on Problem Gambling (NCPG) was also created to raise awareness about problem gambling and provide treatment services to compulsive gamblers and their families. The Casino Control Act empowers the NCPG to issue casino exclusion orders. Through these orders, individuals in financial distress, or receiving social assistance, are prohibited from entering casinos. Singaporeans can also apply to exclude themselves and close family members from casinos.

Second, to avoid tarnishing Singapore’s brand name, the Government assured that the IRs would be designed to have “decent and wholesome” appearances. In other words, the casinos are not allowed to display bright, eye-catching advertisements (like those found in Las Vegas). Instead, the casino can only occupy a maximum of three to five per cent of the total resort space. Visitors would thus have to make a conscious effort to go to the casino, instead of succumbing to temptation in a moment of weakness.

Regulating Online Gambling

While the Government was tackling the negative impacts of casino gambling, new forms of gambling emerged online. Online casino and sports betting websites are easily accessible and provide users with anonymity. This incentivises gamblers, particularly gambling addicts who are barred from physical casinos, to turn to these unlicensed websites.

To curb the rise of unregulated online gambling, Parliament passed the Remote Gambling Act in 2014. The Act made all forms of remote gambling illegal unless the remote gambling service was provided by an exempt operator (e.g., Singapore Pools). The Government clarified that the law was not intended to cover video games where players do not play for a chance at winning money. In addition, advertising of online gambling services was prohibited.

Under this Act, the authorities were empowered to require internet service providers to block access to unauthorised gambling websites, as well as to require banks to block monetary transfers to and from these websites. In particular, additional protection was afforded to youths (below 21 years old) who are more susceptible to engaging in online gambling. The Act made it an offence to invite youths to gamble remotely, or to employ youths in remote gambling.

Consolidating the Regulatory Regime

At the time, various forms of gambling were regulated by different government agencies. To consolidate Singapore’s gambling regulatory resources within a single entity, Parliament passed the Gambling Regulatory Authority of Singapore Act in 2022. This Act established the Gambling Regulatory Authority (GRA) as the sole regulator for all forms of gambling, by reconstituting it from the previous CRA. This helped ensure consistency in gambling regulation and allowed the Government to adopt a more holistic and coherent approach to gambling policies.

Furthermore, the Government was concerned that existing gambling policies were not equipped to address the evolving gambling landscape. Online gambling was continuing to grow in popularity with technological advancements. Businesses adapted to this by introducing gambling elements into products that were traditionally not seen as gambling (e.g., loot boxes). To keep pace with these emerging trends, Parliament passed the Gambling Control Act (GC Act) in 2022. Crucially, the GC Act amended gambling regulations in four key areas:

Offering clearer legal definitions of gambling;
Introducing more comprehensive licensing regimes for various gambling products;
Updating gambling penalties; and
Enhancing social safeguards.

Offering Clearer Legal Definitions of Gambling

To begin, the GC Act changed the definition of gambling to cover both existing and emerging gambling products. The new definition was specifically made to be technology-neutral. Under the Act, gambling refers to engaging in:

Betting: wagering money on the outcome of an event, the likelihood of something happening, or whether something is or is not true;
Gaming activity: playing a game of chance for prize, or playing a game machine; or
Lottery: entering into an arrangement where prizes are awarded based on chance.

Additionally, the GC Act legalises social gambling when carried out among family and friends at homes (e.g., playing mahjong). While not previously illegal, social gambling was not clearly defined in existing laws. This amendment provides more clarity on the issue, stating that social gambling activities must not be conducted in the course of any business. That said, online social gambling is prohibited due to the practical difficulties of determining if the participants are socially acquainted online.

Introducing Broader Licensing Regimes

Second, the GC Act implements a broader licensing regime to cover the various gambling products. For key gambling products, the GRA will be allowed to issue individual licences to gambling operators. Key gambling products include slot machines, Singapore Pools’ products and gambling at private establishments. This approach enables the GRA to screen and monitor operators to ensure that they are suitable to offer gambling products.

On the other hand, the GRA will implement class licensing regimes for gambling products deemed to be of lower risk. Such products include mystery boxes, online games with gambling elements and business promotion lucky draws. Unlike the aforementioned licensing regime, a class licensing regime does not require an operator to apply for a licence. The class-licensed operator can operate as long as it satisfies the conditions set out in the law. For example, under the class licence for business promotion lucky draws, one condition is that businesses are not permitted to collect entry fees from participants.

Updating Gambling Penalties

Third, in addition to consolidating the penalties for unlawful gambling, the GC Act introduces a three-tier penalty structure for physical and online gambling offences. The highest penalties will be imposed on operators since their culpability is highest, followed by agents and then punters (i.e., gamblers).

Enhancing Social Safeguards

Lastly, the GC Act strengthens social safeguards for youths and individuals excluded from gambling areas. Under the Act, it is an offence for underage individuals to gamble with legal or unlawful operators. Underage individuals are also prohibited from entering gambling areas, except where entry checks are not required (e.g., Singapore Pools). Similarly, it is an offence for excluded individuals to gamble and enter gambling areas, where the exclusion orders are applicable.

Strategies Across The Table

How Is Gambling Being Regulated in the Region?

Malaysia

Prior to the legalisation of casinos in Singapore, the next closest alternative would be in Malaysia. Gambling is regulated under three major legal frameworks: the Betting Act 1953, the Common Gaming Houses Act 1953, and Shariah Law. Each of these laws regulate a different sector of society, and work together to form a comprehensive regulatory framework to regulate betting. The Betting Act and Common Gaming Houses Act work together in the secular legal system to regulate gambling activities for non-Muslims. Under the Betting Act, only licensed companies would be able to operate a betting house. On the other hand, in the religious sphere, Sharia Laws against all types of gambling are also applicable for Muslims in court, in light of the Muslim-majority demographic of the country.

In fact, one of the biggest concerns when exploring the launching of another casino in Forest City is the growing attentiveness to Islamic practices in Malaysia. According to observers, both the King, Sultan Ibrahim Sultan Iskandar, and Prime Minister Anwar, are unlikely to support the opening. With the Sultan being constitutionally recognised as the “defender of Islam and the custodian of Malay heritage”, and Mr Anwar facing stiffer political competition for the Muslim vote, the potential economic benefits of the casino’s opening are weighed down by religious concerns given the country’s Muslim-majority demographic.

Hong Kong

Gambling in Hong Kong is regulated under the Gambling Ordinance, where only the following gambling activities are allowed: Horse Racing, Mark Six Lottery, Football Betting and private Mahjong games. Most notably, three of the four public forms of gambling (horse racing, Mark Six lottery and football betting) can only be legally operated by the Hong Kong Jockey Club (HKJC). As a non-profit organisation, the HKJC donates most of its operating surplus to charity and community projects, with 93 per cent of its profits being donated through the Hong Kong Jockey Club Charities Trust in the 2023/24 financial year.

However, in light of a growing black market for basketball betting, Hong Kong is also considering expanding the list of legal gambling activities to include basketball betting as well. The HKJC and the Betting and Lotteries Commission (BLC) believe that it would be more beneficial to regulate the US$10 billion market through the legalisation of basketball betting. This way, it gives the government more control over the growing demand for basketball betting whilst being able to tax and regulate the burgeoning market.

What Can We Learn from Our Neighbours?

Shifting Sentiments and a Slippery Slope

Despite already having casinos prior to the proposal to open another one in Forest City, the hesitation due to potential backlash from its Muslim majority signals the shifting sentiments of Malaysia’s population. While the ethnic-religious demographic in Singapore differs from that of Malaysia, the possibility of shifting sentiments when considering the opening of another casino down the road is plausible as well.

On the other hand, expanding its list of legalised gambling activities can also potentially be a slippery slope for Hong Kong. Given the inherent difficulty in establishing a clear line between legal and illegal gambling activities, the allure of capturing the black market treads a fine line between greater regulation of gambling activities and the normalisation of such activities.

Conclusion

Singapore’s approach to gambling regulations have evolved through time. With policies in place to mitigate the social costs of gambling, Singapore has since reaped the significant economic benefits that comes with the legalisation of casinos. However, as seen in Malaysia and Hong Kong, public sentiment towards the continuous expansion of gambling might shift, and policymakers also risk going down a slippery slope when determining the realm of gambling activities that are deemed legal.

This Policy Explainer was written by members of MAJU. MAJU is a ground-up, fully youth-led organisation dedicated to empowering Singaporean youths in policy discourse and co-creation.

By promoting constructive dialogue and serving as a bridge between youths and the Government, we hope to drive the keMAJUan (progress!) of Singapore.

The citations to our Policy Explainers can be found in the PDF appended to this webpage.