SINGAPORE TOTALISATOR BOARD BILL

Order for Second Reading read.

Dr Richard Hu Tsu Tau: Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The Singapore Totalisator Board Bill seeks to establish a statutory body to regulate the conduct of betting by its agencies, and to give legislative authority for the property and funds of the Singapore Turf Club to be held on trust by the Club for the purposes of the Singapore Totalisator Board.

Although the Singapore Turf Club is a private club registered under the Societies Act, gambling by members of the public is allowed both within and outside its premises. They do so by placing their bets with the Club. It is, therefore, the only private club to which the public have legitimate access to gambling.

Horse racing in Singapore has been the sole preserve of the Singapore Turf Club since the last century. Through exemption under the gaming laws, the Club has the virtual monopoly to conduct betting on horse races. Strict enforcement of the gaming laws by the Police has helped the Club to maintain its monopolistic preserve all through these years. As a result, the Club has been able to generate a substantial amount of profits annually. Thus in 1986, the Club had an after-tax profit of approximately $33.67 million. As of 31 December 1986, its accumulated fund and reserves had reached well over $286 million.

The Club's register shows that it now has about 580 ordinary members. Only this small group can share in the distribution of the vast amount of its accumulated assets and future profits should the Club be dissolved.

Such a possibility is not in the public interest. The Club was not set up as a business proposition. It has accumulated its profits by virtue of the monopoly conferred by the Government and paid for by the public. It was never the Government's intention to provide a small number of the Club's members such monopoly benefits. Therefore, any funds so accumulated not through business acumen or risks taken, but merely by collecting bets from the ordinary members of the public, should not be left for the sole benefit of the members. The establishment of the Singapore Totalisator Board will seek to correct this anomaly.

I now turn to the main provisions of the Bill.

The provision to establish the Singapore Totalisator Board is set out in clause 3.

The principal functions of the Board are to operate totalisators in respect of race meetings and conduct four-digit draws. These are set out in clause 4.

The Board will appoint the Singapore Turf Club as its agent to conduct racing business in accordance with an approved scheme, the scope of which is set out in clause 11. Essentially, the scheme deals with the establishment and operation of totalisators and totalisator agencies in respect of race meetings. Clause 14 enables the Club to regulate the admission of members of the public to the Club. The other provisions relating to the administration of the approved scheme are set out in clauses 12, 13 and 15 to 18.

Since the profits of the Club come from the public at large, clause 5 of the Bill empowers the Board to use its funds for public, social or charitable purposes and for the promotion of culture, art and sport. The other provisions relating to the financial powers of the Board are set out in clauses 8 to 10.

Clauses 19 and 20 confer on the Police the powers to deal with offences committed under the Act.

The property and funds of the Singapore Turf Club are deemed to be held by the Club on trust for the purposes of the Board with effect from the appointed date, ie, 9 November 1987, when the Bill was introduced in Parliament. This is provided for in clause 22 and is necessary to safeguard the Club's assets in the public interest.

Sir, I beg to move.

Question proposed.

Mr Abdullah Tarmugi (Siglap): Mr Deputy Speaker, Sir, I would like to make some observations on the Bill which is now before us.

The Bill would make available an additional and welcome source of funds for social and charitable purposes and for the promotion of the arts in Singapore. We are only too familiar, Sir, with our high dependence on public and corporate donations and sponsorship, especially in the running of charities and the promotion of the arts and sports. While I appreciate the philosophy of encouraging community participation and the building of a self-reliant society with regard to these efforts, I believe that much more can be done with the energy and manpower that go into fund raising activity and with more money.

It is, therefore, in this context, Sir, that clause 5 of the Bill is welcomed as it empowers the proposed Totalisator Board to distribute its profits which, by past experience, is pretty substantial, for the purposes which I have mentioned. Having said all this, Sir, I would like to stress that we should ensure compliance of the intent and purpose of clause 5 of the Bill.

What brings me to mention this is the memory of what happened to the profits of Singapore Pools (Pte) Ltd. Let me elaborate. In the appendix to the Second Report of the Public Accounts Committee of 1978, the Auditor-General then said:

'It (referring to the Committee) recalled that on the 13th May, 1968 the Minister for Social Affairs informed Parliament that the proceeds from the Toto Pools to be started soon would be utilised to meet the cost of building the Kallang Sport Complex. Subsequently, in the debate in Parliament on the Annual Budget Statement of 9th March, 1970 the then Minister for Finance stated that the National Stadium would be offered a loan of $7.8 million and that it was intended to form a Corporation to run the Stadium. The income to repay the loan, as well as future loans, would come from two sources - the profit from Singapore Pools (Pte) Ltd and the takings at the gate of the Stadium.'

I quote again from the PAC Report:

'The Committee were informed of large surpluses accumulated by Singapore Pools (Pte) Ltd and urged that early steps be taken by the Ministry of Finance to ensure that the original aims of Singapore Pools (Pte) Ltd vis-a-vis the Singapore Sports Council are adhered to, or if the policy has been changed, to clarify the position.'

Audit referred the above matter to the Ministry of Finance and the Ministry answered that:

'Singapore Pools (Pte) Ltd had contributed $11 million to the development of the National Stadium Complex. Singapore Pools (Pte) Ltd also made annual contributions to the recurrent budget of the Singapore Sports Council (SSC) (from figures given by the Ministry of Finance, the total contributions from 1971/72 to 1976/77 amounted to $3.35 million). The Ministry of Finance was also of the view that so long as reasonable financial assistance is provided to the SSC for the provision of sports facilities in Singapore, the Board of Singapore Pools (Pte) Ltd is adhering to its original aims.'

Then again, Sir, in the parliamentary debate on 3rd March 1982, (Hansard, Vol. 41, col. 374) the Member for Delta raised a question on Singapore Pools (Pte) Ltd. His question was: how were the profits of Singapore Pools being used and whether the Minister for Finance would use a portion of the profits to provide scholarships to needy and outstanding students and to construct sports complexes in housing estates? The then Minister for Finance replied:

'In 1980, Singapore Pools declared a dividend of $75.6 million out of its accumulated profits which was credited to [now, hear this] the Government Consolidated revenue.

Singapore Pools is now held by Temasek Holdings Ltd and its profits will be treated like those of any other member company in this group. It is unlikely that Singapore Pools will allocate much money for charitable purposes, including the provision of scholarships to needy and outstanding students and the construction of sports complexes.'

Sir, it is not my intention to resurrect the controversy on the loan issue to the Singapore Sports Council and indeed this is a separate issue. But I have taken the liberty to quote rather lengthily the circumstances surrounding the profits of Singapore Pools to demonstrate the possibility of implementation of the Bill not following the purpose and intent of the Bill. In this case, clause 5 of the Singapore Totalisator Board Bill. I hope, Sir, this will not happen to this Bill now before us and I hope the Minister for Finance will give this assurance to this House.

Dr Augustine H.H. Tan (Whampoa): Mr Deputy Speaker, Sir, I rise to seek clarification on clause 16 in regard to paragraph (b) which allows the Board or the Turf Club:

'to publish in any newspaper ... any advertisement setting out any list of totalisator agencies, the name, address, hours of business and any telephone number of any totalisator agency, any rules, terms or conditions upon or subject to which totalisator investments may be received at any such agency, or the name of any race meeting in respect of which totalisator investments may for the time being be received at any such agency;'

And then the Bill goes on to describe in paragraph (2) of this clause that:

'Nothing in subsection (1) [which I have just described] shall be construed to authorise the exhibition or publication of any matter intended to induce any person to make any totalisator investment.'

Sir, I fail to understand how the second paragraph negates the first paragraph because it apparently allows the advertisement which facilitates the gambling on which the whole system is based. And quite clearly, all information provided in all such advertisements are bound to, if not induce, encourage people to participate in gambling.

Mr Leong Horn Kee (Thomson): Mr Deputy Speaker, Sir, in principle, I would say that I support the concept of this Totalisator Board. With its formation, in my view, the difference is that in the past the Turf Club and the 4-digit betting was done by a private organization which also controls the large amount of surplus money in its coffers. At the same time, this private organization has to bear the stigma and adverse publicity arising from such activities. Now with the Government backing the formation of a statutory board to operate the Turf Club and the 4-digit betting, it would seem that the public wrath on such activities will fall on the Government. For example, every weekend Bukit Timah Road would be jammed with cars arising from the tremendously traffic caused by these bettors.

In this regard, I would like to say that clause 5 gives some mitigating advantage to the Board in that it allows the Board to distribute money from time to time for public, social or charitable activities, as well as for the promotion of culture, arts and sports functions. I think this objective is very noble indeed. However, it is insufficient to state that the Board will from time to time do this, which means that it is at the Board's pleasure. May I suggest that the Minister consider whether the Board should actually announce publicly to set a fixed percentage of its annual profit to be given to a charitable organization like the Community Chest of Singapore. In this way, not only will the public benefit from such a charitable act but also every bettor whether he wins or loses in a bet, more often he loses than he wins, knows for sure that he will be contributing a fixed sum of his bets to a good cause.

My last point, Sir, is with regard to clause 4(d) which spells out the functions of the Board. Clause 4(d) empowers the Board:

'to carry on all other activities in support of racing generally in Singapore.' Does it mean that the Board now has a carte blanche to open new racing-related betting activites like dog racing or other forms of racing in Singapore? Could this be a precursor to other new forms of betting activities which the Government may want to support in future. This, I believe, is not the standing image that the Government want to create, at least not as one of high moral turpitude.

Mr Chiam See Tong: Mr Deputy Speaker, Sir, I would like to move that this Bill be placed before a Select Committee. But, first of all, I would declare that I have no pecuniary interest whatsoever on this matter. In fact, I am not a racing fan. I have never stepped into the Turf Club. My disposition and my upbringing is, in fact, against gambling.

Why do I say that this Bill be put before a Select Committee? I have been informed that the Government has not consulted any of the committee members of the Turf Club on this Bill. This is my information. This is a very high-handed way of doing it if it were true. As it is, Singapore is renowned already for this kind of system. In fact, I think this is one example of it.

Sir, the Singapore Turf Club, I believe, was founded in 1933 and it has been in existence for 54 years. I believe there have been no complaints of any misdeeds on the part of any of its committee members. If there is any, it is not within my knowledge. As far as I know, there were no misconducts although I believe there were two investigations on two of their members recently on charges of CBT but I believe nothing came out of those investigations.

The Turf Club is a very rich body. According to reports, it has got $286 million in cash. This is a very big sum of money. I think the Turf Club made one big mistake and that is not to have disposed of all those assets long ago.

An hon. Member: To charity.

Mr Chiam See Tong: Yes, given to charity. I think that is their mistake. It is a very big juicy plum and it is very tempting. So probably that is their one big sin and that is the reason why the Government is stepping in.

In addition to this huge sum of money, I believe the Turf Club also has got 338 hectares of land. This land is in prime area, Bukit Timah area. I think it can easily be sold for $500-odd million. So within three weeks, from the 9th to today, the 30th November, with one swoop the Government is taking over $800 million. This is a very fast exercise.

I think if the members of the committee are not consulted the Government is in breach of what is known as natural justice. If you are going to affect the interests of somebody, I think you should give him a fair hearing first before you pass the Bill. If none of the committee members or none of its members have even been told about what the Government is going to do, I think the Government has really breached the rule of natural justice. This piece of common law is as old as the English legal system. In fact, it is a very serious wrong when anyone commits a breach of natural justice. Because you have affected somebody's interest and you have not consulted him. I think it is only fair that the committee members should be called upon to perhaps make some suggestions. Hear them out first, before this Bill becomes legislation.

Sir, of course, there are all kinds of rumours going on as to why the Government all of a sudden is taking this step. But I do not think I would like to mention it.

Dr Augustine Tan: Why not?

Mr Chiam See Tong: Because I have got dignity and decorum in me.

Sir, another important issue in this is: what sort of system are we having in Singapore? I do not think we are a democratic system. Where is the democracy? This is an example. Let us take this example. So with one big swoop, over $800 million is taken from an organization. What kind of a system is this? I think we already have received a lot of criticism on the high-handedness on the part of the Government, even if it is doing good. I think people should be consulted and that is the essence of a democracy.

Dr S. Vasoo (Bo Wen): Mr Deputy Speaker, Sir, I rise to support the Bill because it is a good move to ensure that good public money is being used for good public purposes. As the Member for Potong Pasir has said, $286 million of good money is available, we must therefore all the more ensure that there is a public watchdog body to see that such funds are made available for good public purposes. The Board to be set up under the proposed Bill will provide public participation in ensuring that the money will be channelled to the various charitable and public institutions. I think this is the main thrust of the Bill. We would not know how this money is going to be deployed if it is left with nochecks, no public inputs into the way the money is to be utilized.

As I can see from records, there are very little funds that are channelled to charitable institutions. Most of the money have been accumulated over the years and it is only spent for a very limited interest and very few charities are supported for its work. I stress it is time the Government set up a body up a body to monitor the activities of the Turf Club. I would like to seek the assurance of the Minister that the funds are not diverted to Government Consolidated Fund but are used for charitable, social and other recreational activities.

Mr Chew Heng Ching (Kaki Bukit): Sir, I rise to support the formation of the Totalisator Board because I think its intentions are good. However, I wish to seek two clarifications from the Minister. With the formation of this Board, does it mean that the Government has relaxed or will relax its stand on gambling, since income from the Totalisator's agencies will become a good source of revenue for the State, for community development and for the promotion of art, culture and sports? My second question relates to the operations of Big Sweep and Toto by Singapore Pools. Is there a plan in the longer term to eventually include Singapore Pools under the purview of the Board?

Mr Sia Khoon Seong (Moulmein): Sir, I rise in support of the Bill. What took the Government so long to introduce this Bill? They should have done this long ago.

Quite frankly, Mr Deputy Speaker, Sir, I do not know the setup of the Singapore Turf Club. I have always been under the impression that it is of a public character, that is to say, the right of the turf club members to gamble on the understanding that whatever proceeds or whatever winnings will finally go to some public charities and so forth. At least that is the kind of vague impression I had. Otherwise it would seem to me quite unfair. But that I know the true status of the turf club, ie, that the 500-odd members have got the private right to whatever earnings from the running of the races and so on. It would seem on the one hand that we grant rights to a group of privileged people, and on the other hand we go around arresting the small-time bookies and runners. It would seem that there are two classes of people in Singapore, those who can have the right and finally pocket the profits, and the other class of poor runners who do not have the right. So I think if this Bill is not passed today, it would appear to me to be rather unfair to the poorer man who is a small-time bookie. But with this move, now that nobody has the right to spend the profits for his or her own benefit but for charity, for social and educational purposes, for sports, I think that is fair because we cannot completely eliminate gambling. And if gambling is to be controlled, I think whatever profits that are going to be derived from gambling should be used for the good of the public. The intention of this Bill has got that spirit. Therefore I support the Bill.

Dr Richard Hu Tsu Tau: Mr Deputy Speaker, Sir, I thought that the Bill would pass without comments, but obviously I was wrong, and I thank those who have risen in support of the Bill. I will now answer the questions in the order in which they were addressed.

The Member for Siglap has suggested that history has proven that good intentions are not usually followed, but I will try to ensure that the new Board when appointed will use funds derived from horse racing and its associated activities will be used for the benefit of the public at large, including sports and other activities.

As to the question from the Member for Whampoa about the apparent contradiction in clause 16, I do not see a contradiction at all. Clause 16(1)(a) and (b) makes it not an offence to publish the list of names of the people who are authorized agents of the Board or totalisator agencies, whereas subclause (2) of clause 16 is intended not to give carte blanche to proposals to advertise and induce people to gamble.

The Member for Thomson has suggested that the creation of the Board might place the odium of gambling fully on the Government's shoulders. I think it is a matter of opinion because everyone knows that the turf club cannot exist without Government approval. At present, gambling operations are handled by a private club with tacit Government approval. It is no different from a Board controlling turf club activities as we are now intending. So I do not think it really changes the position as far as the public is concerned.

He has also suggested that the Board should announce a fixed percentage of profits to be allocated to charities like the Community Chest. That is an issue which has to be decided by the Board. But his suggestion is not necessarily a bad one, and I will convey his proposal to the Board as and when it is formed.

There is a question on whether other forms of gambling will be allowed. The other form of gambling currently allowed is the 4-digit operation and there is no present intention to allow other variants of gambling.

The Member for Potong Pasir has suggested that the matter be referred to a Select Committee on grounds that the members of the Turf Club Committee were not consulted. I do not think this is really a sensible proposal. The Bill is intended primarily to correct an anomaly, an oversight which should have been corrected many years ago. We are merely following the precedent set in Malaysia where the Tote Board has been in operation for some years. In fact, in Australia and in many other countries legal gambling sanctioned by government is controlled by statutory boards and agencies (like the Turf Club's) carry on the day-to-day operations.

It is not intended that the Singapore Turf Club will be dissolved. In fact, the intention would be for the Board to continue to appoint the STC as its agent to carry out day-to-day operations. There is no suggestion that the present committee has done anything wrong. So the need to consult them for a proposal in which the public interest is manifest, I think would be unnecessary and perhaps a considerable waste of public time. I suggest that if the Member for Potong Pasir has heard of any aspersions or reasons for the introduction of this Bill, he should have the courage to say it in public. But if he feels that this would be embarrassing for individuals, I will be quite happy to receive his comments in private.

The Member has also said that the intent of the Bill is to sequester not only the current cash assets of the Club but also substantial land assets. Well, this is not true. The land does not belong to the Club. It is under lease from the Government and the entire area is zoned as "Green Belt" and therefore not suitable for commercial development.

The Member for Bo Wen has expressed support, although he has said that he hopes that the money would not be transferred to the Consolidated Fund. That is not the intention and I would ensure that the Board understands this: that the use of funds accumulated by the Turf Club operations should be confined to its terms of reference as defined in the Bill.

The Member for Kaki Bukit has asked whether the Bill will change the Government's attitude towards gambling. My response is no. It does not. It merely corrects a position which should have been corrected a long time ago.

As for Singapore Pools, for the moment we have not considered placing the Singapore Pools under the Board but it is not a matter which need be excluded at this point of time.

The Member for Moulmein has expressed support for the Bill but asked why it took the Government so long to come around to it. Well, it is an oversight admittedly and we are now in the process of correcting it.

Mr Chiam See Tong: May I be allowed to ask a point of clarification. According to a newspaper report, there was a statement issued by the Ministry of Finance that the Singapore Turf Club members numbering around 600 can dissolve the Club and share out its accumulated funds and reserves. Is this a true statement? Because my knowledge is that the Turf Club has got no such powers in its constitution, and if it wants to amend its constitution it must get the approval of the Registrar. So if this statement is wrong, it is misleading.

Dr Richard Hu Tsu Tau: The statement is correct in that the Articles of Association of the Club do not specifically exclude the possibility of the Club being dissolved and its assets distributed amongst the members. This risk of it happening and the Government not having the legislation to block it is a very serious risk which we are not prepared to take.

Mr Chiam See Tong: Sir, I still maintain that if this statement were true according to this report, then I say the Ministry has misled the public because members of the Turf Club have got no such powers. There is no such risk involved because there is no provision for a dissolution of the Club. Therefore, they cannot divide the money amongst themselves. They can never do that. If they want to include a provision to dissolve the Club, they must get the clearance of the Registrar of Societies first. So there is no such risk.

Dr Richard Hu Tsu Tau: As I said, there is no specific provision within the constitution of the Club. But they have it within their power under the Societies Act to carry out such a dissolution although you can say that legally, at present, they do not have such power, but the risk exists.

Mr Chiam See Tong: Therefore, would you agree that in fact this statement put out by the Ministry of Finance is completely misleading? Then it should be withdrawn. But it is not withdrawn.

Dr Richard Hu Tsu Tau: No, it is not misleading because it is the intent that we are concerned about.

Dr Augustine Tan: Mr Deputy Speaker, Sir, I think the more important question is that there is this large sum of money that could be misused; money that could be used profitably for charity which, I believe, is the intent of this Bill.

Dr Richard Hu Tsu Tau: I think this is a quite correct statement. In addition to this debatable, arguable point about dissolution, whether or not they intend to go through with it, the present constitution allows the committee to use the funds for any purpose. So whether they dissolve the Club or not, the $286 million worth of accumulated assets plus a continuing revenue of between $30 million and $40 million could be used for the private benefit of the members, without necessarily dissolving the Club, and the intent is identical.

Mr Chiam See Tong: I think this statement clearly states that the dissolution is possible. It clearly states there. There is no question of intent whatsoever in the Finance Ministry's statement. You are now saying that the intent is possible. The intention is possible.

Dr Richard Hu Tsu Tau: The possibility is quite clear.

Mr Chiam See Tong: My contention is that they have got no such powers to dissolve the Club and distribute the funds. That is my contention. But you are turning and saying now that the intent is there, which is completely different. You are misleading the public.

Dr Richard Hu Tsu Tau: No, no, I am not misleading the public. I think you might be misleading yourself. The purpose of ---

Mr Chiam See Tong: Mr Deputy Speaker, Sir, I would not take this kind of aspersions. If you want to debate, let us debate on the facts of it. Do not just say something personal against another person.

Dr Richard Hu Tsu Tau: The objective of this Bill is to protect the public interests and not to go into legal arguments and semantics. The purpose is to ensure that the assets of the Club are not used for purposes outside the public interest and for the private benefit of a small number of members.

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. - [Dr Richard Hu Tsu Tau].

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