CASINO CONTROL (AMENDMENT) BILL

CASINO CONTROL (AMENDMENT) BILL: Order for Second Reading read.

3.07 pm

The Second Minister for Finance (Mrs Lim Hwee Hua): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Bill proposes two main sets of changes to the Casino Control Act:

First, improving the administrative process of the Inland Revenue Authority of Singapore or IRAS to collect casino taxes; and, s econd, strengthening our social safeguards for problem gamblers.

Sir, let me now explain the first set of amendments.

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Since the passing of the Casino Control Act, the Government has done a thorough review and comparison of the Casino Control Act with other tax legislation. We aim to align the administrative powers granted to IRAS under the Casino Control Act with those granted under the Income Tax Act, the Goods and Services Tax Act and the other gambling tax acts, namely the Private Lotteries Act and the Betting and Sweepstakes Duties Act.

For example, a proposed new section 146B will allow the Comptroller to make an assessment of casino tax if the returns from the casino operators are not furnished, incomplete or incorrect. This is similar to section 45 of the GST Act. Another provision is the proposed new section 150A, which will allow the Comptroller of Income Tax to appoint a person to be an agent of the casino operator liable to pay tax due on behalf of the casino operator. This is similar to section 57 of the Income Tax Act. The inclusion of such clauses will empower the Comptroller to administer the collection of casino taxes more efficiently.

Sir, I will now explain the second set of amendments. As part of the Government’s comprehensive social safeguards on casino gambling, the National Council on Problem Gambling (NCPG) has statutory powers under the Act to exclude Singapore Citizens and Permanent Residents aged 21 and above from entering the casinos.

There are three types of casino exclusions: Family, Self and Third-Party. Family Exclusion is where a family applies to exclude a family member with gambling problems from casinos. Self-Exclusion is where an individual voluntarily decides to exclude himself or herself from casinos. Third-Party Exclusions cover some 29,000 undischarged bankrupts and beneficiaries of the Public Assistance and Special Grant.

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The NCPG has conducted fairly extensive discussions with the public, stakeholders and its partners on the exclusion process. Following these discussions, it has rolled out the Family Exclusion process in April this year. On the other hand, one key feedback it has received is that it should simplify and shorten its Self and Third-Party Exclusion processes so as to more efficiently and effectively protect those who are vulnerable towards problem gambling.

The NCPG has recommended three amendments to the Act, which the Government supports.

Firstly, to remove the need for a Committee of Assessors to convene and decide on exclusion for Self and Third-Party. There is no need for any "judgment" or exercise of discretion for the decision on such exclusions because Self-Exclusion is voluntary and Third-Party is by fiat. For the same reason, the opportunity to object and appeal against an order for Third-Party Exclusion has been removed.

Secondly, to remove the need for hard copy notifications for both Self and Third-Party exclusions. Those who have bankruptcy petitions against them or who are applying for Public Assistance and Special Grant would already be notified of potential casino exclusion as part of the administrative process.

And lastly, to enable the Council to notify the casinos, Casino Regulatory Authority and the Police of exclusions via electronic means, as opposed to informing them using paper documents. This will facilitate the administration process for exclusion orders.

Sir, once approved, the provisions of the Act will come into force by 15th October 2009.

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Mr Speaker, Sir, I beg to move.

Question proposed.

3.12 pm

Mdm Ho Geok Choo (West Coast): Mr Speaker, Sir, thank you for allowing me to speak on the Second Reading of the Casino Control (Amendment) Bill and I am glad that this Bill is being tightened further.

Sir, who could have forgotten the TV advertisement, where a father pleads with his daughter to break into her piggy bank to fuel his gambling addiction. Very touching but, at the same time, extremely disturbing. It shows the abysmal depth to which a gambler might descend, to feed his perverse and insatiable addiction to gambling.

According to a 2007 survey by the National Council on Problem Gambling, nearly all the respondents welcomed the casino exclusion order and said that they would apply for casino expulsion orders to ban family members having gambling problems.

That is the good piece of news. On the flip side, the survey indicates that the number of people who felt that gambling could lead to an unhappy family life, has decreased. There is a new-found acceptance towards gambling. Many more gamblers believed that having the right gambling skills could lead to a large payoff and the number of gamblers, with a dogged determination to recover what they lost, had doubled according to the survey. Therefore the $100 entry levy or $2,000 annual membership might have little impact on gamblers, and you do not even have to be hardcore addicts, to try to " cheong " as much as you can.

Sir, the Ministry of Community Development, Youth and Sports did a survey on Participation in Gambling

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activities among Singapore Residents in the year 2008. The Chinese are well known for their fondness for gambling but what is disturbing is that, over the span of three years, between 2005 and 2008, the number of Malay and Indian gamblers has increased from 12% to 22% and 30% to 36% respectively. The number of low income earners, those earning up to $2,000 monthly, gamble more and the numbers are increasing, according to the survey.

Sir, these are worrisome facts and figures. We decided to go ahead with the casino project to give a fillip to our economy and in particular our tourism sector but what about those poor, weak-willed, easily-led, misguided individuals amongst us who are unable to resist temptation? What are we going to do about them? How are we going to rein them in?

Sir, my views on the Integrated Resorts (IRs) are known but I welcome the further tightening of the screws to filter out the "Exclusives." They might not realise the good "fortune" that we are bringing upon them by restricting their presence at the IRs.

Sir, persons on Public Assistance, undischarged bankrupts and those who make a voluntary application for exclusion are excluded from the casinos,

but now with the doing away of the Committee of Assessors for the issuance of the exclusion order, makes life easier and hassle-free for them.

Singapore has come a long way over the past 50 years. The hard-earned wealth that Singapore painstakingly accumulated over the years helps to pay for several social programmes like Public Assistance. We do not want to have instances where our ComCare and other Public Assistance programme beneficiaries, instead of using the money given

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to alleviate their hardship, blow it on chips, blackjack and the one-armed bandit.

Sir, these amendments allow for automatic exclusion of undischarged bankrupts and persons on Government social assistance. The concept itself is good, since undischarged bankrupts and persons on Government social assistance really should not be gambling at casinos.

These amendments make it administratively easier, as well as send a strong message across that gambling is not for those who cannot afford to do so and this approach is to be commended. However, the question is: how is the casino going to implement this on the ground? Will they be doing ID checks on all patrons? Sir, this is not the normal kind of ID checks that clubs would do, ie, that of checking age, but this would probably require a computer database and an efficient checking process.

Extra effort must be taken by the authorities to ensure that the list of those excluded is regularly and thoroughly maintained to prevent misunderstanding. A person who is no longer a bankrupt or on Public Assistance may wish to explore the casino but if a non-updated list prevents him or her from entering, the negative effects on the casino, our tourism sector and our much-vaunted efficiency would be far greater. Casinos overseas do not have such stringent checks. Would it be a deterrent, albeit a small one, to tourists if the checks are slow and hamper entry into the casino?

Also, how is "poor credit record" under the existing section 165(1)(c) defined? This is the only instance in which the Committee has discretion in making an exclusion order against a person, but it is not clearly defined under the Act. Would the Minister consider clarifying what "poor credit record" means, so as to

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promote transparency in making exclusion orders?

Sir, the amendments on the casino tax provide a more nuanced approach to taxation of gaming profits. Previously, profits were taxed without regard to whether the casino was a party to the wager. The amendments clarified that (i) profits earned from games where casino is a party to the wager are taxable, and (ii) moneys received from games where casino merely conducts the game are taxable. In practice, how will the taxman know how much the casino earns through either method? If false declarations are made, will the taxman be able to find out?

While there is a deterrent found in the current legislation – allowing for the collection of up to four times of the underpaid tax – is this sufficient to prevent deliberate under-declaration of income, especially when it is so easy to do so? At the same time, is it too harsh to impose personal criminal liability on those who make incorrect returns or give any incorrect information in relation to any matter affecting a casino operator’s liability to pay tax?

Sir, first of all, this offence does not require any guilty intent – instead, the moment the person makes an incorrect return or gives any incorrect information, he is guilty, whether he intended to evade tax or not.

Second, is it fair to hold individuals criminally responsible? Would it be better instead to hold the casino operator company criminally responsible? Yes, there is a stronger deterrent effect in holding individuals criminally responsible but we must remember who benefits the most at the end of the day. If there is tax evasion – it is the company rather than the individuals running it.

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The two points coupled together make it especially harsh to hold individuals criminally liable – they do not benefit directly, and yet can be held criminally liable even if they were merely negligent (rather than actively trying to evade tax) in preparing tax returns.

Sir, on this note, I support the Casino Control (Amendment) Bill.

3.20 pm

Mr Christopher de Souza: Mr Speaker, Sir, thank you for allowing me to join in this debate.

One of the main amendments to the Casino Control Act is that those who give incorrect tax returns on gaming revenue will face stiffer penalties. In addition to paying double the underpaid amount, they can be fined up to $25,000 or jailed for up to two years or both.

I support this amendment under section 149A of the Bill. This will send a clear signal to the casino operators to put in place rigorous accounting processes to ensure that their relevant departments and staff adhere to the law.

The other major amendment is to automatically exclude from the casino un-discharged bankrupts, persons on Public Assistance as well as those who voluntarily want to be kept out, thereby removing the need for a Committee of Assessors to make an exclusion order in respect of each such person.

I wish to make three points arising from these amendments, and the family exclusion orders which already exist in the Act:

Firstly, we cannot rely on pathological gamblers or probable problem gamblers to self exclude themselves. Incidentally, these terms "pathological" or "problem gamblers" are phrases used in a 2008

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MCYS Report on Participation in Gambling Activities Amongst Singaporean Residents.

Secondly, family exclusion orders which already exist in the Act under sections 158 to 164, which allow families to apply for exclusion of problem gamblers from casinos, are also unlikely to have much impact as I understand that, to date, only 14 families have gone beyond enquiring about these orders.

According to NCPG, Singapore is the second place in the world to have such family exclusion orders, after the state of South Australia, where only 170 enquiries were received between July 2004 and July 2008. According to a Straits Times report on 2nd April this year, "If South Australia's experience is any guide, however, Singapore will see few applications for family exclusion orders. In the four years up to last June, there were 18 applications for such orders in the Australian state, and only eight were issued. The rest were dismissed or withdrawn."

My third point is that I think it is important to remember the objective of the Casino Regulatory Authority (CRA), which is captured in section 8 of the Act. In particular, section 8(c) reads:

"The objects of the Authority are to maintain and administer systems for the licensing, supervision and control of casinos, for the purpose of containing and controlling the potential of a casino to cause harm to minors, vulnerable persons and [importantly] society at large."

Therefore, it is an object of the CRA to study and stem the negative social implications of casinos beyond the casino, ie, "in society at large".

Therefore, my proposal is to make it explicit in the Bill, or at least in the Minister’s reply in this debate, that the

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CRA is empowered to work with NCPG and MHA to track whether the casinos are creating irreversible damage to our social fabric in the form of:

(a) money-laundering activities;

(b) rise in problem gambling and the effects it has on families;

(c) growing number of people resorting to loans from loan sharks; and

(d) an increase in prostitution syndicates.

It is also proposed that the Bill, or the Minister’s reply, should make it explicit that the CRA is empowered to collect data on these social implications.

The CRA can be empowered to take on this co-ordination and data-collection role through an avenue which already exists in the original Act, namely, section 10(2)(d) which states that the CRA may "carry out research or other educational activities relating to casino gaming, or to support (financially or otherwise) the carrying out by others of such activities or the provision by others of information or advice".

Therefore, I ask, should not the CRA be empowered under section 10(2)(d) read with its object as stated under section 8(c) to become the co-ordinating body between MHA and NCPG so that it will have enough data to accurately calibrate the level of regulation of casinos to ensure a minimal amount of negative social impact on Singaporeans and their families and a reduced amount of casino related offences, like money laundering, soliciting and loansharking?

After all, NCPG is primarily dedicated towards preventing problem gamblers from gambling and MHA is committed to fighting crime. Their roles are separate, distinct. Whereas, to battle the negative

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social implications which the casinos will bring, we need to have synergies between these organisations. This will translate into a clear understanding of what is an effective level of casino regulation. This role should be fulfilled by the CRA.

A further avenue to provide the CRA with such power is section 9(2) of the original Act which states:

"The Authority may undertake such other functions and duties as the Minister may assign to the Authority and in so doing, the Authority shall be deemed to be fulfilling the purposes of this Act …"

My proposal for empowering the CRA to:

(i) possess oversight of the social implications casino gambling has on Singaporeans – these implications being problem gambling, loan sharking, money laundering and heightened vice activities, and (thereby);

(ii) calibrate its regulation of casinos to minimise such negative social implications finds support in the second reading of the original Bill where Deputy Prime Minister Wong Kan Seng stated:

"... having casinos could mean more people gambling and getting themselves – and their families – into trouble. Concerns were expressed that crimes, such as loan sharking, money laundering and prostitution, could increase and tarnish Singapore's reputation as a clean, safe and secure place ..."

Deputy Prime Minister Wong’s candid statement finds support in empirical data. According to the Credit Counselling Singapore (CCS), the number of debt-distressed individuals who cite gambling as a major cause of their financial problem grew from 12.7% in 2006 to 27.5% in 2008. The percentage more than doubled.

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Even more worrying, younger people, age 40 and below, make up a bigger proportion or 60.7% of this group of debtors.

It seems that the major pre-occupation of the Act and this Bill is to empower the CRA to regulate only what happens in the casino. This would be ineffective to battle negative social implications outside of the casino, ie, in the society at large, which is an explicit priority of the CRA under section 8(c). So as to achieve this objective, would the Minister consider the proposal to empower the CRA to (1) carry out the co-ordinating and data collection function between MHA and NCPG in order that (2) it is armed with valuable insight into the social implications casino gambling has on Singaporeans – these implications being problem gambling, loansharking, money laundering and heightened vice activities, which information will (3) allow the CRA to calibrate its regulation of casinos to minimise such negative social implications in society at large.

This proposal is consistent with the object of the CRA under section 8(c) of the original Act and the broad power it can be given under two other sections of the original Act, namely, section 10(2)(d) and section 9(2). This proposal will also allow the CRA to take on a more effective role in minimising the social implications of problem gambling outside of the casino, ie, in Singapore society.

Sir, I support the amendments but seek the Minister’s reply on my proposal which attempts to make the regulatory framework tighter and more effective.

3.29 pm

Ms Sylvia Lim (Non-Constituency Member): Sir, the public was asked to accept the potential social fallout from casinos due to their projected economic benefits, including tax revenue. Thus, it

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is interesting that the Bill introduces clause 7 which allows the Minister to remit the tax on gaming revenue if he considers it just and equitable. I am aware that a similar provision exists in other tax legislation, such as the Income Tax Act and the Property Tax Act, giving the Minister power to remit those taxes if he considers it just and equitable. However, in the context of the Integrated Resorts, under what circumstances would it be just and equitable to forgive the casino tax due from a casino operator? Could the Minister clarify whether there is concern about the viability of the IRs due to the mixed projections put forth by the various analysts?

Another provision which should be clarified is clause 4 concerning the new section 146B. In particular, section 146B, sub-section (5), provides that if a casino operator does not submit tax returns for two consecutive accounting periods, then the Comptroller of Income Tax can take this into account in making his assessment. In particular, it is provided that the Comptroller can take the failure into account and make an assessment of "an amount of casino tax greater than that

which he would otherwise have considered to be appropriate." Does this mean that the amount of tax is going to be over-assessed because the casino operator failed to file returns?

This does not seem to be an appropriate response. By contrast, other tax legislation, such as the Income Tax Act, makes it an offence not to file returns, which attracts certain penalties and fines which, on principle, seems more justifiable.

Clause 8 introduces the offence of making an incorrect return or giving incorrect information. This becomes an offence under new section 149A and it is punishable with the following – a penalty of double the tax underpaid due to the error, and either fine or imprisonment or

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both. This section is worded very generally and does not distinguish between errors which are deliberately or recklessly made, and errors made after due diligence was exercised. By contrast, the corresponding provision under the Income Tax Act, section 95, clearly distinguishes between the two types of errors – those made under due diligence are punishable only by a penalty equivalent to the tax which was underpaid. Under the proposed section 149A, errors made after due diligence will also potentially attract double tax and fine or imprisonment. Why does the provision not distinguish between the two types of errors?

Finally, Sir, regarding Exclusion Orders, I am glad to note that the new section 165A provides for the blanket exclusion of undischarged bankrupts, from entering the casino, rather than a cumbersome case-by-case approach. This blanket exclusion for undischarged bankrupts, in effect, adopts a suggestion made by the Member for Hougang, Mr Low Thia Khiang, in 2006, when the Bill was first debated.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.55 pm.

Sitting accordingly suspended

at 3.35 pm until 3.55 pm.

Sitting resumed at 3 .55 pm

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[Mr Speaker in the Chair]:

CASINO CONTROL (AMENDMENT ) BILL: Debate resumed.

Assoc. Prof. Paulin Tay Straughan: Mr Speaker, Sir, thank you for this opportunity to speak on this Bill.

I followed the discourse on the introduction of Integrated Resorts to the Singapore landscape when the proposal

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was first discussed in April 2005 and, subsequently, in February 2006 when the Casino Control Bill was debated and passed. Personally, I think it is important that after the extensive public consultation with the respective concerned parties, the decision taken by the Government was that individual Singaporeans should be entrusted to make their own decisions on whether they want to participate in the casino activities. Nonetheless, as a community, we are also concerned about the implications of having two IRs in Singapore on the vulnerable segments of our population.

With your permission, Sir, I would like to speak on this aspect of the amendment – the clauses that aim to protect vulnerable segments of our community from the ill-effects of gambling. In the consideration of Exclusion Orders, we have to be cognizant of the delicate balance between seeking preventive measures and the impediment of civil liberties. I am of the view that we should only invoke the law in extreme cases where vulnerable individuals cannot protect themselves, and the gains from invoking the Exclusion Orders outweigh the social costs.

Clause 14 seeks to insert a new section 165A to the Bill, which invokes an automatic exclusion from entering, remaining in and gaming in a casino, individuals who are on social assistance funded by the Government or a statutory body. I find resonance with this exclusion clause as individuals who are in need of financial assistance should not have surplus for funding gambling activities. In addition to Government or statutory bodies, there are also private agencies which offer financial assistance to the vulnerable poor.

May I ask the Minister if there is a mechanism for these private philan

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thropies to seek to exclude their beneficiaries from participating in casino gaming?

Clauses 15 and 16 relate to the Family Exclusion Order. There are several concerns I have with the Family Exclusion Order, which have not, in my opinion, been adequately addressed in earlier debates.

The definition of a "family" embraced by the National Council for Problem Gambling is a very broad one. I quote from the Council’s website, "Exclusion is available to immediate family members defined as spouses, children, parents and siblings, including adopted and step relations." In addition, minors below 21 years of age or are incapacitated due to physical or mental impairment could apply for the Family Exclusion with an extended family member or a Minister-appointed person.

To be indicted as a problem gambler through the Family Exclusion Order is a serious charge, and a socially humiliating experience. I am particularly concerned with frivolous or wilful charges initiated by individuals who are seeking means to harm or curtail civil liberties of family members.

I would like to ask the Minister if there are processes and safeguards in place to protect innocent members of the community in such instances. For example, will the named individual be spared from emotional distress when a Family Exclusion Order is initiated but not yet verified? Will there be punitive measures taken against those who initiate wilful charges to prevent abuse and misuse of the Family Exclusion Order?

Unlike Mr de Souza, I was very surprised to learn that there were so many enquiries received by the NCPG. As of June 2009, the Business Times reported that there were 78 enquiries. This is just a

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little less than half the number of enquiries received in South Australia over a four-year period.

As there is a significant number of cases involved, we must take note of the social implications of this Exclusion Order.

Inevitably, regardless of the outcome, invoking a Family Exclusion Order will result in animosity and ill-will between family members.

Like the Parents Maintenance Act, once the law is invoked to manage family ties and relationships, the family loses its distinctive altruistic nature and the social ties between affected members are irrevocably damaged. In short, the family will cease to function as a family where social obligations are driven by notions of love and compassion. Instead, the exchanges will be policed by the law, and will very likely cease to exist once the whip is lifted.

I would like to seek an insight into how the NCPG manages the potential fallout between family members when this Exclusionary Order is invoked. I understand from published reports that there are at least two individuals who are likely to be barred from entering the casinos here because of the application for a Family Exclusion Order initiated by their spouses. Was the NCPG successful in reinstating a functional spousal relationship in these initial cases?

As we strive to plug the gaps through a comprehensive legislative Bill, we must be cognisant that we have yet to address a fundamental concern regarding the establishment of the two Integrated Resorts in Singapore – and that is the glamorisation and normalisation of casino gambling (which, in turn, may inevitably normalise other forms of gambling). In particular, we must be vigilant of the potential draw the Casinos in the IRs will have on our youths. In this regard, the NCPG must step up its education

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initiatives to be targeted at young Singaporeans who are testing boundaries.

With these comments, I support the Bill.

4.02 pm

Ms Audrey Wong Wai Yen (Nominated Member): Mr Speaker, Sir, thank you very much for allowing me this opportunity to join the debate on this Bill. Like many other Singaporeans, I was very concerned with the introduction of the Integrated Resorts (IRs) and, of course, followed the debates on the Casino Control Bill from the start. I would like to seek a few clarifications from the Ministry on the section of the Bill with regard to persons to be excluded from the casinos and also to raise some related concerns on problem gambling which other Members of the House have also spoken on today.

As I understand it, the spirit of the proposed amendment to section 165 of the principal Act is to offer more protection to those persons and their families who are most at risk from losing everything they have through uncontrolled gambling. While there was provision in the original Act for a person with poor credit record to make a voluntary application for exclusion, the new amendments take away this option for those who are on Public Assistance or are undischarged bankrupts. There will now be automatic exclusion for these persons. In fact, I understand that this is already the practice with the third-party exclusion order and it has also been stated in a brochure I saw on casino exclusion published by the National Council on Problem Gambling. I have to say this definitely offers more protection to a particular group of persons who might be most at risk, particularly to the children and elderly parents who might rely on their children for support and these would be the more vulnerable groups. This might well be the reason for the amendment.

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However, like my fellow Member, Assoc. Prof. Paulin Tay Straughan, I am concerned about whether automatic exclusion or some of the exclusion orders would erode the sense of responsibility of the individual by taking away the powers of self-determination. If individuals are not allowed to determine for themselves what is good for their families and to make the right judgments and decisions, take responsibility for their own families, it might reinforce the attitude of dependency on the State. And automatic exclusion I feel could perhaps reinforce an attitude of dependency on the State.

We must encourage people to take responsibility for their lives. I am sure we would all like Singaporeans to be much more self-reliant and resilient. Undoubtedly, it is irresponsible for someone on Public Assistance or someone who is an undischarged bankrupt especially to use Public Assistance funds to gamble or to use it to pay the $100 admission charge to the casinos. However, automatic exclusion may not actually stop persons with poor credit records from potentially developing gambling problems. Anyone can still get their fix from other forms of gambling they are permitted – 4D, football betting – or even take that bus ride up to Genting.

In drawing up the amendment, I am sure the Ministry was thinking of protecting those at risk and it is indeed not easy to strike an exact balance between regulation and protection of the more vulnerable members of society. At the same time, with automatic exclusion, it could also stigmatise those who, for whatever reason, are on Public Assistance. I would urge that exclusion orders, when they are implemented, to be done with due consideration of their impact on the individual on their sense of responsibility to their families as well as the impact on their family relationships

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and also to ensure that these individuals have the chance to improve their financial circumstances. I hope the Minister will further explicate the reasons for automatic exclusion.

I would also like to ask for more explanation on how automatic exclusion will be implemented. Does it mean there will be much more inter-agency cooperation because different agencies handle casino regulation, Public Assistance and bankruptcy? Would MCYS and the Public Trustees Office share information and automatically and regularly update the Council on the names and particulars of persons on Public Assistance and undischarged bankrupts, including automatically informing the Council when a bankrupt has been discharged? Will there be a time lag between the discharge of a bankrupt and the revocation of an exclusion order by the Council? And is there still provision for someone who may wish to object to his exclusion as provided for in the existing Chapter 165 of the Act or will this no longer apply once automatic exclusion kicks in?

I am not in opposition to the spirit of the law with regard to protecting those most at risk. We are all aware of the destructive and painful effects of problem gambling on families and individuals. Singapore is entering into new territory with the IRs and our regulatory mechanisms will be tested as the IRs start to operate and these would include the laws on exclusion orders. Perhaps, we should have a period of careful study once the casinos are in operation to monitor the efficacy of the legislation as well as the regulatory mechanisms, including those mechanisms that are managed by the casinos themselves, and not be afraid to make further amendments in the future, if necessary.

Please allow me now to turn to another issue of concern – the regulations and restrictions on public advertising of

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the casinos. When the Integrated Resorts open, we can expect a lot of fanfare, glitz, media coverage and advertising. It will be premature to presume that increased media coverage and advertising will encourage Singaporeans to gamble more. But we should be careful not to discount the impact of aggressive advertising on human behaviour, particularly if casino-related activities are portrayed as glamorous lifestyle and entertainment options. There are already regulations against advertising on gambling in Singapore and I understand there will be restrictions on advertising of the casinos in Singapore.

I would like to seek further clarifications on specific regulations regarding advertising of the IRs and casino activity. Will casino operators be subject to a certain advertising code of practice? For instance, would advertising depicting gambling-related activities or any aspect of the IRs which relates to gambling be allowed at bus-stops near schools? We already have some regulations on certain activities such as the screening and advertising of R(A) movies in Singapore, with the rationale being to protect the innocence of the young. Will we have more specific regulations to protect the vulnerable with regard to IR advertising and how will this be implemented and enforced? In some of the Australian states, restrictions on advertising and promotion of gambling and casinos are written into legislation. In the Australian Capital Territory's Gambling Industry Code of Practice, there is also a stipulation that information about gambling counselling services must be made available in conjunction with advertising.

As it stands, it appears that gambling might be on its way to becoming more socially acceptable. Mdm Ho Geok Choo had earlier cited certain surveys to show that the number of gamblers has increased. I find it interesting also to read in the survey on participation and

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gambling activities among Singapore residents in 2008 which was published by the National Council on Problem Gambling, that compared to the findings in 2005, the proportion of respondents in 2008 who considered 4D, Toto, Singapore Sweep and social gambling as leisure activities actually increased and "increased substantially", in the survey's own words. I believe around 50% of respondents considered these forms of gambling to be leisure activities. Other Members of the House have spoken on these disturbing trends as well. I am aware that MCYS and National Council on Problem Gambling are seriously addressing these issues and that they have already made a headstart on them. I hope that the relevant Ministries will continue to monitor and review the measures on gambling-related activities and to propose new legislation as the need arises.

I will also like to lend my voice to support my fellow Member, Mr Christopher de Souza's call for the Casino Regulatory Authority to work more closely with NCPG and the Ministry of Home Affairs to track the social impact of the activities of casinos on Singapore as a whole, for instance, to track the trends or any rise in illegal activities or negative activities in society at large such as money laundering, loansharking and vice activities. In last month's parliamentary session, there seemed to be a lot of concern about the visibility of illegal moneylenders and how they harass residents in HDB estates. These clearly are concerns for many Singaporeans and I hope that we continue to monitor and track how we regulate the casinos in Singapore.

With that, I support the Bill.

4.13 pm

Mr Calvin Cheng: Mr Speaker, Sir, I rise in support of the Bill.

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I only have two comments, specifically on section 165(A) "Persons to be excluded from Casino". I applaud the move to automatically exclude certain categories of persons from casinos, persons manifestly unsuited from going near any gambling place. I hope that the Minister can consider another category of such persons, namely, persons who have committed offences under the Common Gaming Houses Act, the Betting Act, and the Private Lotteries Act. The reason why I think these people should also be automatically excluded is that they have committed crimes related to gambling and a casino is a place for that very specific purpose. Some of these people may have retained links to gambling syndicates, and may be more likely to offend, if given access to casinos and the many gamblers in these casinos. For example, a recalcitrant illegal bookmaker may find a casino fertile recruiting ground for gamblers interested in his illegal activities. Some may think this suggestion to exclude such a category of persons too harsh. May I also suggest the following: that the automatic exclusion stands for a period of time after their conviction, for first time offenders convicted under the above acts, after which the exclusion is lifted. Repeat offenders under the same abovementioned acts could be excluded for longer periods of time, with recalcitrant offenders excluded permanently, subject to periodic reviews.

Mr Calvin Cheng: 4.15 pm

The second comment I have is to ask whether dependants of those on Public Assistance, and of undischarged bankrupts, will also be automatically excluded. These people may not be on

Public Assistance or bankrupt themselves, but because they are dependants – the wife

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or children, for example – they are indirectly also beneficiaries of Public Assistance, or in the case of undischarged bankrupts, dependent on the finances of the bankrupt person. If these people are also not automatically excluded, the whole idea of excluding undischarged bankrupts and people on Public Assistance may be undermined.

Other than these points, Sir, I support the amendment Bill.

Dr Vivian Balakrishnan: Mr Deputy Speaker, Sir, I will address the issues raised by Members with respect to the casino exclusion orders and the social safeguards. This is probably the second or third time I am participating in a debate on the casinos, and the casinos have not even opened. It shows that this is not the first and will probably not be the last time that we will have to calibrate and adjust our regulatory and operational postures with respect to casinos.

Let me, first, reassure Mdm Ho Geok Choo, Mr Christopher de Souza and Ms Audrey Wong that we will establish a set of social safeguards which are, in fact, more stringent than that in many other jurisdictions. Apart from the common safeguards, such as the minimum age of 21 and the process of self-exclusion, we also have safeguards which are uncommon or uniquely Singaporean – for instance, the casino entry levy, the prohibition of casino advertising in the local mass media, as well as Family and Third-Party Exclusions.

Mr Christopher de Souza will be pleased to note that section 129(1) of the Casino Control Act requires the casino operators to take all appropriate steps to ensure that undesirable activities, such as prostitution and illegal money lending, do not take place within their premises. The Police and the Casino Regulatory Authority will work closely with the casino operators to ensure that their

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casinos are free from such undesirable activities. Any casino operator who contravenes section 129(1) of the Casino Control Act shall be liable to disciplinary action, which is spelt out in section 54 of the Act. In addition, should loansharking, money laundering and syndicated vice activities be detected in the casinos, the Police will not hesitate to prosecute the offenders. Outside of the casinos, there will also be existing laws and processes to guard against such undesirable activities.

The Casino Regulatory Authority’s core duty, therefore, remains the regulation of the casinos. However, having said that, I agree with Mr Christopher de Souza that the Casino Regulatory Authority, the Ministry of Home Affairs, the National Council on Problem Gambling (NCPG) and MCYS will clearly have to work together and collaborate in order to monitor and to address the overall social impact of casino gambling. In fact, these various agencies have already begun to work very closely together and they do meet very regularly at staff level.

Mr Calvin Cheng has also suggested that persons who have committed offences under the Common Gaming Houses Act, the Betting Act and the Private Lotteries Act, and I presume he also means loansharks, should be excluded from the casinos as they may have links with gambling syndicates. I think this is an interesting suggestion which we will consider. Nevertheless, let me reassure him that the Police and the Casino Regulatory Authority will work closely with the casino operators to make sure that our casinos are free from such undesirable activities and individuals.

The Government will assess and monitor the effectiveness of the social safeguards after the casinos are open, and as I have said earlier, if we need to tighten, we will do so.

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Let me now move on to Family Exclusions. Family Exclusions enable a family to exclude a particular family member with a serious gambling problem from entering the casinos. A Committee of Assessors will be appointed by the NCPG which will sit to hear and to review each case before making a Family Exclusion Order. An Order will only be issued if there is reasonable apprehension that the respondent may cause serious harm to his family members because of his or her gambling. The making of the Order has to be appropriate in the circumstances, and the respondent has to be given an opportunity to object to the application, and the Committee must be satisfied that it would be in the best interests of both the respondent and his family members to make such an Order. So there will be safeguards in the process by which such Orders are executed.

A respondent will be regarded to have caused serious harm to his family if, for instance, because of his gambling habit he has previously engaged in gambling activities irresponsibly, has done so repeatedly over a period of not less than three months or in a particularly irresponsible manner over a lesser period. It is difficult to spell out in fine detail, but these will be judgments which we will have to leave to the Committee of Assessors.

Prof. Paulin Tay Straughan has asked about measures to prevent abuse of the Family Exclusion Order. All members of the Council and anybody sitting in the Committee of Assessors will be deemed to be public servants under section 193 of the Casino Control Act. Hence, a false declaration made to the Council or Committee is an offence under section 182 of the Penal Code. Such an offence draws a punishment of imprisonment for a term up to one year, or a fine which may extend to $5,000, or both.

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I would like to assure Prof. Straughan that the procedures that the NCPG has put in place for the Family Exclusion aim to help the family and the person with a gambling problem. The first point of contact for a family member who wishes to make an application for an Order will, in fact, be with a social worker. The social worker will help to stabilise the family, while taking a non-adversarial stance with the member with a gambling problem. Both the problem gambler and the family members will be invited to attend interviews, offered counselling and necessary support by the social worker. So it is meant to be a supportive and non-adversarial interaction in the first instance.

The NCPG has also consulted extensively on the composition of the Committee of Assessors. It will be chaired by a NCPG member and, thus far, the Council has asked two of its members, who are retired High Court judges, to chair these Committees. The other members of the Committee will be drawn from professions such as social workers and counsellors as well as grassroots leaders, Justices of the Peace and school principals.

The Family Exclusion empowers a family that is adversely affected by a problem gambler to seek assistance in curbing the problem behaviour of the gambler. As at 31st August 2009, seven Family Exclusion Orders have been issued. Of these seven cases, three cases have opted to continue with counselling on a voluntary basis.

Amongst the seven cases, two were made by wives against their husbands, three were made by parents against their sons, and two were made by sisters against their brothers. For both cases made by wives, the husbands were supportive and agreed to the Order. Of the three cases that were requested by

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parents, there was no indication of a strained relationship with their sons. In fact, they had earlier bailed their sons out of their debts and the children were remorseful and understood their parents' reason for making such an application. Of the two applications made by sisters, the brothers were also supportive and understood the reasons why the sisters made these two applications.

As the NCPG handles more cases in the future, I am sure there will be more difficult, more complex and more adversarial cases. But with a social work approach to these cases, we believe that we will try, to the maximum extent possible, to avoid an adversarial outcome.

Mr Christopher de Souza expressed concern that the Family Exclusion may not have much impact. I think time will tell. We should look at things in totality and remember that this is just one part of a total package of social safeguards that we have put in place after carefully studying the experiences and lessons of other jurisdictions. And, as I have said earlier, we are prepared to tweak these measures, if need be, in order to suit our own unique context and circumstances.

Under the Third-Party Exclusion, undischarged bankrupts and recipients of Public Assistance and Special Grants from the Government will be excluded from the casinos. We estimate that there are about 29,000 people who will be excluded under this scheme. I would like to inform Ms Audrey Wong that there has, in fact, been no change in policy. This is something which I had previously stated during the earlier parliamentary debate in 2005. The objective of the Third-Party Exclusion is to protect persons who are already in severe financial hardship and can ill afford to gamble, from getting into further debt. The proposed amendments simplify the legal process. For this group of persons, there is no need for any "judgment" or discretion to be exercised

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by the Committee of Assessors since the exclusion criteria are clear cut. For the same reason, the opportunity to object and appeal against casino exclusion has also been removed.

Mr Calvin Cheng would be pleased to know that dependants of those receiving Public Assistance and Special Grants will be automatically excluded from the casinos. The dependants of undischarged bankrupts would not, however, be automatically excluded, as it may not always be the case that these dependants are financially vulnerable. For dependants of undischarged bankrupts, I would suggest that they consider voluntary Self-Exclusion and the NCPG can work with the families who come forward for such help.

I share Prof. Straughan’s concern for persons who are receiving assistance from other charities, but I am not willing to automatically exclude them. I would suggest that they consider voluntary Self-Exclusion. And perhaps the benefactors can consider making this a pre-condition before offering assistance. But the NCPG will explore her idea further.

The NCPG will also accept applications to exclude persons with a poor credit record. On this point, I must say that it has to be assessed on a case-by-case basis. It will take into account the total debts, the unpaid bills the person has accumulated, his earning capacity, overall financial circumstances, emotional stability and family support. These are cases which we cannot hard-wire and hard-code.

I agree with Ms Audrey Wong that it is not easy to balance between over-regulation and protection of the more vulnerable members of our society. On this issue, I am inclined to agree with Mdm Ho Geok Choo that those in financial hardship should not be gambling at the casinos. And I am sure Ms Audrey Wong

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will also agree that we do want to send a strong message that gambling is not for those who cannot afford to do so. It is not a means to make a living. It is not a means to salvage an already compromised financial situation.

Ms Audrey Wong asked about the process of implementing the Exclusions. Yes, there will certainly be inter-agency link-up. The NCPG will obtain, on a regular basis, an updated list of undischarged bankrupts and Public Assistance and Special Grant recipients from the Insolvency and Public Trustee’s Office and from my Ministry’s ComCare database respectively. This list will be sent to the Casino Regulatory Authority, the Police and the casino operators. The NCPG is currently finalising the process for Third-Party Exclusions and Ms Wong and Mdm Ho can be assured that we will make the process as speedy and efficient as possible. That is also the reason why we have to amend the legislation to enable us to transmit this information in a soft copy form, to ensure that the information is accurate and updated.

Mdm Ho Geok Choo also asked about the checks conducted to ensure that excluded persons do not enter the casinos. Under the law, section 126 of the Casino Control Act states that the onus is on the casino operator not to allow an excluded person into the casinos. The Casino Regulatory Authority and my Ministry will hold the operators to this duty. As to whether the stringent checks to detect excluded persons will deter tourists, I think the operators will have to exercise some ingenuity in order to create an effective semi-permeable membrane. In other words, for bona fide tourists, they should be able to get through easily. For those who are excluded, they should find it virtually impossible to get through.

As far as advertising is concerned, I am pleased to inform Ms Audrey Wong that my Ministry will be working closely

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with the Casino Regulatory Authority to promulgate the casino advertising regulations. Regulations on casino advertising to our local population are a key social safeguard, as we do not want to promote or normalise gambling. The regulations will be in line with the advertising restrictions that the integrated resort operators agreed to when we first conducted a Request for Proposal for the integrated resorts,

and they agreed, at that point in time, that there would be no advertising to the local population. These restrictions include prohibitions on advertising in free-to-air and cable TV, radio, newspapers, and outdoor advertising, such as at bus stops and on public buses. The advertising regulations will only permit casino advertising within Changi Airport, the Singapore Visitor Centres, and tourist attractions. Even then, the information disseminated on the casinos should be factual and not promotional in nature.

Let me finally turn to youth gambling, which is a concern that I share with many Members of this House. That is one of the reasons why we chose a minimum age of 21 years for entering the casinos, rather than 18 years, in contrast to other forms of gambling. We recognise that casino gambling is potentially more addictive and more dangerous, especially to young people.

The NCPG has identified youths as a key target group. It has conducted consultations with students from schools and tertiary institutions, as well as with youths-at-risk, in order to find out their motivations for gambling. NCPG and its partners have also developed youth programmes to reach out to students. A recent example is the "Play It Right" youth outreach initiative by the Singapore Management University's Recreational Gaming Club, which was supported by the NCPG to reach out to students in our

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local universities, in order to raise awareness of problem gambling, to allow people to identify early signs of problem gambling and also to know the community resources which are available. This is an excellent example of empowered youths reaching out to other youths.

As part of NCPG's capability-building efforts, it recently organised a Train-the-Trainers Workshop in August this year to train social work practitioners, youth workers and psychologists to deal with young people. This workshop was conducted by Dr Jeffrey Derevensky, who is a world-renowned expert in youth gambling, prevention and treatment.

Going forward, we will continue to work with schools, tertiary institutions and our other community partners to expand our outreach and our public education efforts, as well as to focus our efforts in capacity- and capability-building, especially when it comes to young people, who are the most vulnerable members of our population.

Let me end by urging all Members to support these amendments, as we walk this fine line between ensuring that, for the majority of our people, they would be given sufficient freedom and latitude to exercise responsibility, whilst for the minority who are most vulnerable, we do our best to protect them, sometimes even from their own bad judgments.

I will be prepared to take clarifications, Mr Deputy Speaker, before Mrs Lim Hwee Hua rounds up the debate.

Mr Deputy Speaker: Any clarifications? Mr de Souza.

Mr Christopher de Souza: Sir, I thank Minister, Dr Vivian Balakrishnan, for his considered reply. The Minister mentioned section 129. I am aware of that section. I think section 129, sub-section (2) refers to going after casino operators – if they

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fail to carry out reasonable checks to prevent a series of crimes happening in the casino. So that is, again, casino-centric. That is a focus within the casino. My speech was really what we could do to ensure that the trickle-down negative social implications are stemmed beyond the casino and society at large.

I understand that the reply was a coordinated effort between MHA, MCYS, NCPG and the CRA. Again, my point is different from that. I am asking whether the Minister would consider that CRA be empowered, after collecting the data and looking at the information, to tweak and regulate upstream, the casino to ensure that the trickle-down negative social implications do not happen.

Dr Vivian Balakrishnan: Mr Deputy Speaker, I share Mr Christopher de Souza's motivation. But it is a question of how we achieve this objective.

I have handled this casino issue – in my stints at the Ministry of Trade and Industry, MICA, MCYS and even partly when I was in MND. The lesson I have learnt is that in dealing with this complex issue we, in fact, need a network approach and we need multiple agencies to all do what they are best at, but to share information, coordinate and collaborate. I may be misreading your speech but the gist of your speech was that we should empower and even put a duty on the Casino Regulatory Authority to do all these things. That means, apart from regulating the casinos itself, it should also concern itself with all the upstream, downstream and side-stream issues related to the many social ills which could arise from casino gambling. What I am giving you is an assurance that we will work collectively.

The Ministry of Home Affairs, Ministry of Finance, Ministry of Information, Communications and the Arts, Ministry of Community Development, Youth and

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Sports and all our necessary agencies will work to ensure that we take collective responsibility for this and we put in place a sensible and practical system that will mitigate the social ills from casino gambling.

I do not believe it will be practical to put everything into one vehicle or any single agency. I now have sufficient experience to know that it makes for a convenient speech, and it makes for a tidy summary on a piece of paper but it does not work in practice. So I would urge you to hold us to this commitment. And as the situation unfolds, if you notice that we are falling short of these commitments, bring it up in Parliament, file a parliamentary question or cause a debate to occur and the Government will have to respond. But I give you that assurance that we share your concerns.

Mr Calvin Cheng: I thank the Minister for his reply and I ask for his patience as I do not fully understand his clarification regarding the dependants of undischarged bankrupts. If an undischarged bankrupt is financially vulnerable and the person is fully dependent on him, then logically speaking, this person will also be financially vulnerable. If this person has his own means of finances, then this person would not actually be dependent. So can I ask the Minister to clarify, please?

Dr Vivian Balakrishnan: I think it is a matter of degree. I assure the Member for recipients of Public Assistance and Special Grant, the automatic exclusion will include family members. In the case of undischarged bankrupts, we have decided not to be so liberal in automatic exclusion. And whilst I accept his point that there may be some family members of undischarged bankrupts who are vulnerable, I would rather leave it at this point in time for them to voluntarily exclude themselves, rather than subject them to an automatic exclusion. So again, I share

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his objective but it is a matter of how we implement this.

Mrs Lim Hwee Hua: Mr Deputy Speaker, Sir, first, let me thank all Members for speaking on and supporting the Bill. My colleague, Dr Vivian Balakrishnan has explained in detail the non-tax concerns as well as addressed the suggestions raised by the Members. So let me now address the specific tax-related queries raised by Mdm Ho Geok Choo and Ms Sylvia Lim in turn.

Mdm Ho Geok Choo has raised queries on three aspects of the provisions concerning the administration of the casino tax. The first is on how IRAS will keep track of the profits which the casino operators would accrue from the different types of gaming activities.

The casino operators are to comply with the set of internal controls requirements issued by the Casino Regulatory Authority for key processes within the casino. The internal controls specified include how the revenue is to be collected, counted and reconciled for every casino game. For example, the wagering activities at the slot machines will be tracked by the machines' meters and these are linked to a slot management system. This system can, in turn, generate reports on the breakdown of gaming activities like the amount of payouts and casino profits on a daily basis.

Casino operators are also subjected to scrutiny by internal and external auditors, at least once a year. The audit findings relating to the computation of casino tax will then be sent to IRAS for review. And IRAS, in addition, will conduct its own audits and follow-ups with the casino operators on any irregularities discovered in the audits.

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Mdm Ho also raised the point on the penalties for tax evasion. She asked if these are sufficient. If there is a wilful intent to evade casino tax, as we are told earlier on, the operator will be liable to a penalty of four times the amount of the tax underpaid. We also note that this provision is in line with similar provisions in the other tax acts such as the Income Tax Act and the Betting and Sweepstake Duties Act.

Mdm Ho raised a question revolving around the phrase, "any person of the proposed section 149A." She is concerned that IRAS will impose on individuals a fine, or jail term for making incorrect returns or giving incorrect tax-related information, regardless of whether the action was intentional. Let me clarify that this provision is not intended to target individuals. And that the phrase, "any person" means any legal person. It is primarily targeted at the casino operators. We have used the phrase, "any person" to give the authorities sufficient flexibility to act against individuals such as errant employees and tax agents who collaborate with the casino operators to commit a crime. And I should also add that this is a legal term that is aligned with all the other tax acts such as the Income Tax Act. Ultimately, we should take note that the casino operators are responsible for filing casino tax returns accurately. And that filing an incorrect tax return under this provision is an offence by itself, regardless of whether there is an intention to evade tax.

Let me, now, move on to the comments raised by Ms Sylvia Lim. Ms Lim has asked under what scenarios the Minister will remit casino tax as provided for under section 148A of the Act. Let me clarify that section 148A is aligned with similar provisions in the other tax acts such as sections 89(I) and 92(II) of the Goods and Services Tax and Income Tax Act respectively. And these sections are exercised under only very special and

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exceptional circumstances such as poverty or equity reasons. While we do not anticipate usage of these sections, we, nonetheless, propose the addition of these sections to give the Minister the flexibility to remit casino tax, if he assesses that a remission is just and equitable. Let me also confirm that this does not include a consideration on the viability of the IRs as raised by the Member.

Ms Lim has also asked why the proposed section 146B(V) that gives the Comptroller powers to assess tax due and section 149A that governs penalties for incorrect tax returns are not similar to the provisions in the Income Tax Act. Let me just clarify that in the review of the Casino Control Act, references were made to the other tax acts, in addition to the Income Tax Act. So it is not just the Income Tax Act. And for this particular provision, section 146B(V), the more relevant act is actually the Goods and Services Tax Act, which is under a self-assessment system, as opposed to the Income Tax Act which is under an official assessment system. So section 146B(V) was modelled after section 45(VII) of the GST Act to address a similar scenario where the tax payer fails to make a tax return. And the higher casino tax assessment provided for here, acts as a deterrent to encourage the timely filing of returns.

And finally on section 149A, let me clarify that income tax filing involves individuals and business entities and the distinction as outlined by the Member is relevant. This is because an offence under section 149A which relates to incorrect

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filing is assessed to be a lesser charge,

and where the penalties for the offence under this section are half of that under section 150 which addresses a graver charge of tax evasion. In fact, I should add that this is intended to hold the casino operators to higher standards of accountability because with the accounting systems and the internal controls that they have, they are not expected to file incorrectly for casino taxes.

Mr Deputy Speaker, Sir, I believe Dr Vivian Balakrishnan and myself have responded to all the queries. Once again, let me thank all Members for the support and I wish to underscore the need to continually review this piece of legislation even after the IRs are in operation.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Mrs Lim Hwee Hua].

Bill considered in Committee; reported without amendment; read a Third time and passed.