SINGAPORE TOTALISATOR BOARD (AMENDMENT) BILL

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SINGAPORE TOTALISATOR BOARD (AMENDMENT) BILL: Order for Second Reading read.

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

The Bill seeks to amend the Singapore Totalisator Board Act so that the Board may acquire Singapore Pools Pte Ltd from Temasek Holdings.

At present, the Government grants Singapore Pools, a company under Temasek Holdings, the right to conduct 4D, Toto , Singapore Sweep and football betting. The Singapore Totalisator Board, on the other hand, operates 4D and betting on horse races. Both Singapore Pools and the Totalisator Board each separately manage the donation of the surpluses that they generate from their gaming operations.

The Ministry of Finance proposes to have the Totalisator Board acquire Singapore Pools, with the Board then holding the right to operate all legalised gaming activities in Singapore .

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There will be no change to the donation outreach and commitments arising from the Totalisator Board's acquisition of Singapore Pools. The Totalisator Board will honour all of Singapore Pools' ongoing donation commitments. In fact, the merger will bring together the donation approaches of both organisations for more holistic results. The Board will employ both a "wholesale" and "retail" approach towards disbursements of donations. For the "wholesale" approach, the Board will work with partner organisations, such as our universities, the National Medical Research Council, the Singapore Symphony Orchestra and our community centres, to disburse donations towards strategic areas, such as the promotion of education, health, the arts and community development. The Totalisator Board will at the same time take a "retail" approach to disburse donations directly to smaller organisations and individuals serving unmet needs within the community.

Singapore Pools will become an operating company under the Totalisator Board. It will continue to conduct 4D, Toto , Singapore Sweep and football betting operations on behalf of the Totalisator Board. The Turf Club, on the other hand, will stop operating 4D. It will instead concentrate on horse racing and totalisator operations.

Let me now turn to the main provisions of the Bill.

First, the Bill will allow the Totalisator Board to conduct football betting operations and all lotteries. At present, the Singapore Totalisator Board Act allows the Totalisator Board to carry out only 4D and totalisator operations in relation to horse racing, but not other lotteries or football betting. Clause 4(1) of the Bill allows the Board to operate any

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gaming or betting activities as prescribed by the Minister for Finance.

Second, the Totalisator Board Act currently only allows the Board to form companies but not to acquire companies. Clause 5(1) of the Bill provides the Board with the power to acquire companies as well. This will enable the Board to acquire Singapore Pools.

Third, clause 6 of the Bill will expand the size of the Board of Directors from a maximum of seven members to 12 members, including the Chairman. This will enable the Board to better carry out its new functions.

Finally, I would like to propose consequential amendments to the Betting Act. The Betting Act, as it now stands, allows the Minister for Home Affairs to exempt only racing clubs or associations from the Act. The consequential amendments to the Betting Act will give the Minister for Home Affairs the power to exempt persons and organisations other than the Singapore Turf Club from the Act. This will allow the Totalisator Board and its operating agents which carry out legalised gaming to be exempted from the provisions of the Betting Act.

Sir, I beg to move.

Question proposed.

Dr Amy Khor Lean Suan: Sir, when Singapore Tote Board acquires Singapore Pools as its subsidiary from Temasek Holdings, it will bring all gaming and betting operations in Singapore under a single entity. This should be lauded for the efficiency gains arising from the streamlining of operations.

Gaming taxes are major contributions to public funds. Yet, even after generous payouts to winning bets, and accounting for the 12% betting taxes imposed, plus operating costs, Tote Board and Pools still

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have sizeable pools of funds that over the years have been distributed for many worthy causes.

These include the construction of The Esplanade through a mechanism of public finance, famously described by a very senior ex-civil servant as "ingenious", the granting of computer loans to students and the promotion of sports, arts and culture. According to the Tote Board's Annual Report

presented to Parliament in August 2003, $113 million was given in the last financial year in donations to education, health, culture and arts and community projects. I understand that these are the sectors which the Tote Board has traditionally supported.

Singapore Pools has, on the other hand, mainly donated to causes in the areas of sports, charity and community service. The beneficiaries include charities under the banner of the National Council of Social Services, Community Chest, NKF, Kidney Dialysis Foundation, Singapore Red Cross Society, Home Nursing Foundation, National Council Against Drug Abuse, Singapore Hospice Council and Society for the Prevention of Cruelty to Animals. Since its inception in 1968, Singapore Pools has contributed more than $1 billion to such causes. And in the fiscal year 2001 and 2002, Singapore Pools' community funding amounted to $147 million.

The task of allocating these substantial funds rests with the two respective boards. Under the new regime envisaged in the Amendment Bill, the Tote Board will be enlarged to 12 members, including the Chairman, in order to oversee the larger scope of operations and more sizeable pool of money.

Sir, with the impending transfer of Singapore Pools to the Tote Board, I understand that there is disquiet in some quarters, especially among the beneficiaries of Singapore Pools, particularly the smaller organisations that funding for their causes may be adversely affected.

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Sir, they are concerned that with the transfer, there could be a change in donation policy to the detriment of the smaller recipients, much like what is construed to be the fate of some smaller customers after the DBS-POSB bank merger.

Sir, I note that the MOF, through its press release in February 2004, has sought to give some reassurance to the beneficiaries that, even after the transfer, all operations of the Tote Board, Singapore Turb Club and Singapore Pools will continue as usual. Specifically, donations that Singapore Pools has agreed to make will not be affected by the transfer of the company to the Tote Board.

Sir, I also note that the Minister has reiterated this point earlier. Nonetheless, I would like to ask the Minister again to reassure these beneficiaries, for which Singapore Pools' donation forms an essential lifeline, that the Tote Board will continue to donate its excess funds to worthy causes, which must surely include the charities which help the intellectually disabled, the dependent elderly, the homeless, children in care, the needy and the disadvantaged.

Further, Sir, while the Tote Board is audited and the members are honourable and successful individuals appointed by the Minister for Finance, there is no means for the public to know if the allocation goes to the most needy or worthiest causes during any one financial year. Sir, I would like an insight into how the Board actually decides on its distribution policy. Is there, for example, the equivalent of a health care "means test" that we have heard so much about? This could help to allay concerns, particularly of the smaller charities that they may be nudged out of the competition for limited charity dollars as a result of their lower public profile. Is there also a reserves policy evaluated by

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the Board, a question especially pertinent in the light of the issues raised by the recent NKF episode?

Further, with efficiency gains accruing from integration, I would like to ask the Minister if the merged entity would provide every greater support for causes in the sports, arts, culture, charity, community and so on, and not just simply rationalise the combined network.

Sir, beyond this, I am tempted to engage in the delicious speculation that the bringing of the Singapore Pools under the Tote Board is a precursor to the Government eventually operating or, at least, taking a stake in the much-discussed proposed casino itself, should the decision be made to proceed with the project.

Sir, I am happy to leave this as a hunch that requires no direct answer from the Minister. But I venture to add that, if this is indeed the intention, then it could well address some of the public concerns voiced over the moral and social consequences of having a casino in Singapore, even if it is physically offshore. However, a lingering concern here would then be if the Tote Board has the necessary expertise to pursue this project properly and effectively.

Sir, with this, I support the amendments.

Mr Ng Ser Miang (Nominated Member): Mr Speaker, I heard from Dr Amy Khor that, since its inception of Singapore Pools in 1968, it had contributed more than a billion dollars from its surpluses to the development of arts, sports and community projects. Two of its most notable contributions being the $409 million over seven years for the Esplanade project and the $375 million over five years towards Sporting Singapore. It has

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also directly and indirectly contributed and supported many sports and National Sports Associations.

Over the years, Singapore Pools has become a strong supporter and partner of sports development in Singapore. Without the funding of Singapore Pools, it would not have been possible for the Singapore Sports Council and the National Sports Associations to implement many of their plans, and sports in Singapore would not be where it is today. Singapore and Singaporeans would have been poorer for it.

With the funding of the Singapore Pools, the hard work put in by our National Sports Associations and the dedication and sacrifices of our athletes, we are now seeing more and more outstanding performances and international successes from our athletes in many sports, such as table tennis, badminton, sailing, bowling, swimming, just to mention a few of them. The most recent case being Ronald Susilo winning the Japan Open Badminton Championship, a five star event and critical match before the Olympic games in Athens in August this year.

Singapore Pools has also been a true supporter of the Singapore National Olympic Council, funding the participation of athletes for the various SEA Games, Asian Games, Commonwealth Games and the Olympic Games. It has also generously supported the cash award for our medal winners at these major games. The cash award serves both as a recognition and motivation to our athletes.

Sir, I cannot over emphasise the importance of funding provided by the Singapore Pools to sports. I hope that the Singapore Pools, or the Tote Board in this case, will continue to serve the social objectives and especially support of sports after the Singapore Pools has been acquired by the Totalisator Board. In fact,

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I believe that the acquisition of the Singapore Pools by the Totalisator Board would create synergy and therefore more surpluses, and in which case, I would like to do a Oliver Twist and ask for more, ie, more funding for sports.

I support the Bill.

Mr Lim Hng Kiang: Mr Speaker, Sir, first, I would like to thank both Members for their support of this Bill. And I would also like to reiterate what I said earlier that there would be no change in the donation outreach and commitments arising from this merger of the Totalisator Board and the Singapore Pools.

What we are trying to achieve in this exercise is, first, to make the operations more efficient because there is some overlap in the 4D operations by the Singapore Tote Board and the 4D operations by the Singapore Pools. So by combining these two, I think we will run a better and more efficient operation. Second, we want to achieve a holistic approach to the donation of the surpluses even though in the past, we had segmentised the areas by which the Singapore Tote Board would support the other areas where the Singapore Pools would support. Even though we segmentised them, there is still some overlap, particularly in the charitable and community development sectors. With this merger, the Board can take an overall view and allocate the funds more efficiently and more optimally to areas worthy of their support.

When the merger takes place, I can assure Members that the priorities currently given by both entities will remain and this rationalisation or holistic approach would be taken over a longer timeframe. In particular, I would like to assure the smaller charities that they will not be left out. They will continue to be strongly supported by the Tote Board and also the sporting community. Last year,

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for example, the overall sporting community received something to the tune of $120 million from the Singapore Pools. This is a very significant amount. I am sure the Tote Board will continue to support the sporting community in Singapore.

Let me just explain, as Dr Amy Khor asked, how the Board intends to allocate its funds. As I explained in my speech, the Board does so through a wholesale approach as well as a retail approach. By wholesale approach, what I mean is that they allocate a sizeable quantum to an overall agency, say, for example, the National Medical Research Council and then allow the National Medical Research Council to sub-allocate the funds to the research projects that are most worthy. This is because the Tote Board does not see itself having the capability to differentiate the medical research projects and, therefore, they work through an intermediary agency, like the NMRC. Similarly, for the sports community, they adopt both the wholesale and the retail approach. They fund the Singapore sporting funds. They also fund individual National Sports Associations. So they do both on a wholesale approach through the bigger organisations as well as a retail approach through the individual organisations.

For the charity and community development, the Board would have to take a more retail approach rather than a wholesale approach. And this, the Singapore Pools has done so in the past and intends to adopt this same aproach. For example, last year, there were more than 1,000 applications from all the small organisations. The Singapore Pools would have to evaluate these and make its judgement on who to support. Of course, they cannot support all 1,000 applications. What they do is they form small sub-committees with expertise in the various areas, whether it is community development, charity or

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sports, which would then evaluate these proposals and allocate the donations accordingly.

Dr Amy Khor asked whether this merger is a precursor to the Tote Board operating the casino. She does not want to speculate and she does not expect an answer from me. So I shall leave it at that. But my own personal view is that the casino ought to be run by a private operator. So I think the Tote Board would be running the current operations and there is no intention, for the time being, to expand its operations. Whether we have a casino or not, it is still subject to evaluation by the Ministry of Trade and Industry. So I think we just have to wait six or nine months for that study to be completed before letting our imagination run wild.

Let me, again, reassure all beneficiaries of the Singapore Tote Board and the Singapore Pools that they will continue to be supported by this new merged entity.

Mr Low Thia Khiang (Hougang): May I seek clarification from the Minister? Sir, I wonder whether the Minister will tell us what is the general principle which the Tote Board will apply to prioritise applications for donation. The second clarification is whether the Tote Board or the Singapore Pools in the past had ever made any donation to the PAP or PCF.

Mr Lim Hng Kiang: Basically, the Tote Board and the Singapore Pools, as a combined entity, would donate about $300 million a year. So this is quite a significant sum. And they approach this donation by first making general allocations to the various areas which they are supporting, for example, the arts, health, education, sports, charity and community. So there are general allocations out of the $300 million, and

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where are the areas that they would support. And having made these general allocations by the various sectors, they either go through an intermediary, as I said just now, which is the wholesale approach, say, for example, in health. If they want to support, say, $10 million in health research, their approach is to go through the National Medical Research Council rather than inviting research applications and then making a decision. So they go through the intermediary.

For the charity, the community development and the sports, they work through both the wholesale and the retail approach. The wholesale approach would be through

Community Chest, National Council of Social Services, etc, and retail by inviting direct applications, and then they will make an evaluation. To make this evaluation, they set up small committees of people who are in that sector, eg, people in the charity sector and the various community services sector. These people would know what are the applications coming from the area, and they will be able to make an informed judgement which are the areas they want to support.

The Singapore Totalisator Board and Singapore Pools have never supported the PAP financially, because this is a political party and donations of their surpluses do not go to any political parties. PCF is a community development organisation with very worthy causes, whether it is health screening or charity causes or the education of young children. And if it has sensible projects, it can put them up for consideration by the Singapore Totalisator Board and Singapore Pools, just like any other VWOs.

Mr Low Thia Khiang: Sir, a further clarification. It seems that PCF has put up some proposals for consideration for donation. My question is whether or not any application has been supported by

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Singapore Pools or the Singapore Totalisator Board.

Mr Lim Hng Kiang: Sir, let me clarify. I do not know the details of whether the PCF has put up any applications or whether they have been approved. I am just speaking from first principles. PCF is a charitable foundation and there is no reason why any charitable foundation, whether it is PCF or any other foundation, is not allowed to put up any applications to Singapore Pools or the Singapore Totalisator Board. But, clearly, the PAP, as a political party, will not find any support from the Singapore Totalisator Board or Singapore Pools, and the PAP will not put up applications to them. But there is no reason for PCF not to put up. But whether they put up or not, or whether they have received or not, I do not have the data with me and I cannot answer that question.

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. - [Mr Lim Hng Kiang].

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