SECTION_NAME:MINISTERIAL STATEMENT

Sitting resumed at 3.00 pm

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[

Mr Speaker in the Chair] PROPOSAL TO DEVELOP INTEGRATED RESORTS (Statement by the Prime Minister and Minister for Finance): Column: 55

Mr Lee Hsien Loong: Mr Speaker, Sir, Integrated Resorts (IRs) are a significant proposal to boost our tourism industry. The Government has been studying this idea for over a year. The issue has been debated intensely, both among the public and within the Government, because the IRs will also include a gaming component, ie, a casino. Many Singaporeans have spoken up both for and against.

To assess the viability of the proposal, the Government called a Request-For-Concept (RFC) in December 2004, to invite interested players to submit concept proposals to develop IRs on two sites - Marina Bayfront and Sentosa. The RFC attracted 19 bids. After studying the bids, and considering all the views expressed, the Cabinet has decided to proceed with the project and to call for firm proposals to develop two IRs, both at Marina Bayfront and Sentosa.

Today, I will explain how the Cabinet reached this decision, and the key considerations that caused us to change our long-standing policy not to allow casinos in Singapore. I also want to acknowledge the concerns of those who oppose or have expressed reservations about the IR, and explain how we propose to limit the negative impact of the casinos. Finally, I hope to bring all Singaporeans together, so that even though we may not all agree on this issue, we understand and respect each other's reasons and concerns, and can close ranks and move ahead.

After my statement, the Minister for Trade and Industry, Mr Lim Hng Kiang, will explain the tourism and economic aspects of the proposal. The Minister for Community Development, Youth and Sports, Dr Vivian Balakrishnan, will explain the safeguards we propose to limit the social impact of casino gambling. And the Minister for Home Affairs, Mr Wong Kan Seng, will explain issues of law

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and order and enforcement. Members will then have the opportunity to fully express their views and raise questions on all aspects of the issue.

Re-examining our opposition

When the idea of an IR was first mooted, my sympathies were with those who opposed it. The Government's policy for many years had been not to have a casino, and we had repeatedly turned down proposals to open one. The proposals go back a long way, but the first one which I was directly involved in was in 1985 when Singapore experienced the severe recession, and the idea to open a casino on Sentosa came up, not for the first time. Mr Goh Chok Tong, who was then Deputy Prime Minister, turned down the proposal. He said there was no need to consider a casino on Sentosa. There was no study.

In 2002, I chaired the Economic Review Committee (ERC) looking for new strategies to grow our economy. Mr Wee Ee-chao, who was then Chairman of the Singapore Tourism Board, led the Tourism Working Group. He wrote to me proposing a "world class gaming facility". I replied to him explaining why I was against it. Let me quote from my letter to Mr Wee:

"There may be economic merits to setting up a casino in Singapore. But the social impact is not negligible. By making gaming more accessible and even glamorous, it could encourage more gambling and increase the risk of gaming addiction. A casino could also lead to undesirable activities like money laundering, illegal money lending and organised crime. Although one can try to mitigate these effects, the long term impact on social mores and attitudes is more insidious and harder to prevent."

This was my attitude in September 2002, and the recommendation did not get into the final report of the ERC.

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Changing circumstances

But the issue did not go away. MTI, which is responsible for the economy, was getting worried as the competition environment changed. So, two years later, in 2004, MTI put up a case for an IR. Three major developments caused us to re-examine our position.

_Tourism trends
_

First, we are losing ground in tourism. Tourism in Asia is growing phenomenally, especially the traffic from China and India. Singapore's tourist numbers are up too, but we see warning signs of problems ahead. Our market share is declining. Tourists are spending shorter times in Singapore. They used to stay an average of about four days in 1991. Now, they stay only for three days. In contrast, on average, they are staying for about four days in Hong Kong, five days in London and almost a week in New York City. So, we are losing attractiveness as a tourist destination.

Why is that so? The feedback we have been getting is that Singapore is seen as unexciting. We have not been investing in tourism infrastructure projects that are crowd pullers. So there are too few things to do that hold the attention of the tourists. Writers from Hong Kong and Taiwan laugh at us. They say that Singapore is 水 清 无 鱼 ( shui qing wu yu ), ie, the water is too clear, so there is no fish to swim around. If we do nothing about it, visitors from the PRC and India will soon feel the same.

This is not just a matter of chasing tourist numbers. Many jobs are at stake - in the hotel, food and beverage, retail, taxi, exhibition and aviation industries. Our position as an air hub depends on them. Our status as a node in Asia depends on them. As Merrill Lynch observed in their report:

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"The EDB has had successes with its initiatives in the areas of biomedical sciences, education, logistics and supply chain management, and financial services. But it is … (the IR project) … that tips investor mindset toward accepting that Singapore is transforming itself into a diversified service-based economy."

So, that is the first reason, ie, we are losing ground in the tourism business.

Cities reinventing themselves

The second major development is that cities all round the world are reinventing themselves. New York City has been undergoing a renewal - the Big Apple. The current and previous mayors, ie, Bloomberg and Giuliani, have remade the city by cleaning up the streets, and clamping down on crime. New York is rebuilding on the World Trade Centre site, a new and iconic development. They are building a New York Sports and Convention Centre (NYSCC) to draw in more tourists and convention traffic. It is a mega project that will cost US$2.2 billion, and the city and state are contributing altogether US$600 million from government money to the project. New York is also putting up spectacular activities to draw visitors, a recent one being an eye-catching art exhibition or installation art in Central Park called "The Gates". You may have read about it. It is done by Christow comprising 7,500 big saffron banners arranged in the park. They are very colourful, something different, and it brought in the tourists.

Paris is also getting a shake-up, even though it attracts 25 million tourists a year, three times as many as Singapore. The city is redesigning its traffic flow; the mayor has built a very popular artificial beach along the River Seine; and he has

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started night-long street parties. During the first party, the mayor was stabbed and assaulted. But as he was carried away on a stretcher, he told the crowd to carry on partying.

London too is getting a face-lift. New architecture and attractions are sprouting up all over the city, adding more life and colour to an already vibrant and cosmopolitan city. London has had private gambling clubs since the 1960s. The British Government wants to allow Las Vegas-style super casinos to be built. It tried to legislate to allow up to 40 super casinos but, because of opposition from MPs and the impending elections, it had to compromise and agree to build just one super casino somewhere in Britain, to be decided. But, after the general elections, it will try again.

In Asia, Shanghai is full of drive and energy. Hong Kong will open its Disneyland very soon, and is planning a new cultural centre at West Kowloon that is seven times the size of the Esplanade. Hong Kong is talking about building a casino on Lantau, to compete with Macao. In Thailand, Prime Minister Thaksin is likely to move ahead with integrated resorts at Khao Lak in Phang Nga Province. Malaysia is developing the Kuala Lumpur City Centre (KLCC) project, a 40-hectare development which includes the current Petronas Twin Towers. They are also hosting Formula One racing, and Kuala Lumpur is buzzing with tourists from the Middle East.

The question we have to consider is: will Singapore be part of this new world, or will we be bypassed and left behind? We seek to be a global city, attracting talent from around the world, lively, vibrant, and fun to live and work in. We want Singapore to have the X-factor - that buzz that you get in London, Paris or New York. The ideas to do so are

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aplenty, but realising them is not so easy. As Mr Philip Ng said in a forum organised by the URA recently: "Singapore is just among the 'wannabes' of sub-global cities."

We cannot stand still. The whole region is on the move. If we do not change, where will we be in 20 years' time? Losing our appeal to tourists is the lesser problem. But if we become a backwater, just one of many ordinary cities of Asia, instead of being a cosmopolitan hub of the region, then many good jobs will be lost, and all Singaporeans will suffer. And we cannot afford that.

We need to do many things to become a global city. A casino, by itself, is not essential to this vision. But an IR is not just a casino.

An Integrated Resort is one significant idea we must consider and that will help us reinvent Singapore.

Not a casino, but an Integrated Resort

This leads to my third point, which is that we are not considering a casino, but an Integrated Resort.

Some of the media coverage on this debate has focused on whether or not the Government will approve "casinos". It is a short hand, but it has given the wrong impression that the IR project is only about building casinos here. We think of a gaming room with slot machines and game tables, maybe with a hotel and some basic facilities. We think of Macao as it used to be, with a sleazy reputation and triad gangs ruling the streets, or Las Vegas in the movies, with organised crime and money laundering. But that is not what we are looking for. IRs are quite different. In fact, they should be called leisure, entertainment and business zones.

The IRs will come with all sorts of amenities - hotels, restaurants, shopping, convention space, even theatres,

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museums and theme parks. They attract hundreds of thousands of visitors per year. The great majority will not be there to gamble. They may be tourists, executives or businessmen, who go to enjoy the resort, or to attend conventions or conferences. But within this large development and slew of activities, there is one small but essential part which offers gaming and which helps to make the entire project financially feasible. And as a result, there is no need for Government grants or subsidies to the Integrated Resort. The investors will put in the money, and take the commercial risk.

Genting gives us some idea what an Integrated Resort would be like. Genting started off as a casino with an attached hotel, but now it has many other amenities: good hotels, numerous food outlets, theatres, a huge amusement park, golf courses, etc. Many Singaporeans go there for short holidays with the whole family, and not to gamble. The IRs we have in mind are much more than what Genting is.

On a smaller scale, we can think of NTUC Downtown East or the SAFRA Clubhouses. These are wholesome family destinations. People go there to swim, eat, golf and enjoy the facilities. But somewhere within the premises, there is a small jackpot room that generates the revenue and helps to keep the place going. NTUC Club generates millions of dollars a year from the jackpot machines, which help to pay to build the rides and other facilities in the Clubhouses. Without this revenue, NTUC Club would close shop.

Understanding the IR in practical terms

For these reasons, the Cabinet decided that we could not dismiss the idea of an IR out of hand, merely because it contained a gaming element. We had to study it seriously. So Mr George Yeo, who

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was then Minister for Trade and Industry, floated the idea in the Committee of Supply last year in March and this started the current debate.

After I took over as Prime Minister, the Cabinet discussed how to proceed. The public feedback showed clearly that some Singaporeans had strong views against the proposal. The Ministers themselves were evenly split. Some accepted the arguments for an IR. Others thought it sounded too good to be true. They also shared the qualms of the public about the social impact. They asked: are the promised spin-offs real or fluff? Are the economic benefits worth the social and law and order fallout? What safeguards can we put in to discourage Singaporeans from gambling? If we discourage Singaporean gamblers, will investors still find the project viable?

I shared these doubts. I did not believe that based on the arguments presented, we could be confident enough to proceed, and override the reservations of a significant group of Singaporeans or Ministers. But neither did I believe that we should reject an IR based solely on first principles, just because it contained a casino, regardless of its economic benefits. To make an informed decision, we needed to understand what exactly an IR would entail. What sort of investment would it be? What benefits would it bring? We needed information to decide.

So we decided that as a first step, we would initiate a Request For Concepts (RFC). This is a process whereby interested bidders would present concept proposals for the IR, not full proposals but concept proposals. The concept proposals are not binding offers, and the Government is not obliged to proceed with the project after the RFC. The purpose is to give the Government a clearer idea of what is possible. If the RFC showed that the idea of an IR was not viable, or that investors were only

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interested in opening gambling joints, then the Government would say no. But if the RFC proved that an IR is viable, and that investors are keen to build high quality IRs here, then we could weigh the clear economic benefits against the social costs and intangible factors, and make an informed decision one way or other.

Results of RFC

Outcome

The RFC was a success. Many of the bidders were leading companies in the industry, companies which had built high quality IRs elsewhere, and had solid track records and international reputations to protect. They had formed consortia with world renowned architects and creative firms, and obviously put in a great deal of effort into their proposals. These were major projects, involving about $5 billion of investment for the Bayfront and Sentosa sites together. Several bidders said this would be their flagship project in Asia.

Before making a decision, the Ministers viewed the designs and architectural models, and were briefed on the proposals. We found this very helpful in understanding what the IRs were about. I wanted to display the designs and models publicly, so that Singaporeans could see the high quality of the proposals and appreciate the impact of the IRs on our city. Unfortunately, the bidders did not agree. They wanted to protect their intellectual property, keep their best ideas secret and not allow their competitors to see their plans. So as a next best step, and with the permission of selected investors, we have made all Members of Parliament (MPs) sign non-disclosure agreements, including the Opposition MPs, NCMP and NMPs, and we have shown the designs and models to them, so that Members know what we are

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talking about in this debate. I believe Mr Chiam was unable to come but both Mr Low and Mr Steve Chia came. But if Mr Chiam is interested, we will still arrange for this for him.

I believe most Members who have viewed the proposals will agree with the Government's assessment that the RFC has attracted some high quality proposals which deserve serious consideration. Let me describe briefly what the proposals entail.

The Bayfront and the Sentosa sites attracted two very different types of proposals. The Bayfront is suitable for a large business and convention facility. The target market are MICE visitors - ie, people who are coming for Meetings, Incentive tours, Conventions and Exhibitions. When you put them together, you call them MICE. This is a high value market, because MICE visitors spend much more per person than other tourists. The Bayfront site is larger than Suntec City. Investors are prepared to put in $2 billion to $4 billion to develop the entire area, filling it with hotels, shopping malls, convention and exhibition space, even museums and theatres.

The scale is large. If we take a typical proposal: it will have as many hotel rooms as the three 5-star hotels at Marina Square combined; more retail and F&B space than Ngee Ann City, ie, Takashimaya plus all the shops and restaurants surrounding it; plus ample convention and exhibition space.

The Bayfront is a prime site in the New Downtown. Singaporeans would worry if it became a sleazy development, right in the heart of the city. We are very mindful of this. We want to see an iconic development, of excellent architectural design, one that will enhance the city skyline, and complement our role as a business and financial hub. We will subject the Bayfront IR to the same

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stringent urban design standards as other projects in the New Downtown. In fact, an IR at the Bayfront will mostly offer the same activities that we would bring to the area even without an Integrated Resort, namely, hotels, conventions and exhibitions, shopping, restaurants, entertainment, galleries and museums. The only difference is the gaming area itself, but this is only a small part of the whole development - less than 3% of the total floor area allowed.

Without the IR, it might take us 15 years or more to tender out the land in individual parcels, and to develop the area on the same scale. But if we build an IR, within four years, the Bayfront will be developed. This will complement other major developments such as the Esplanade, the new Sports Hub in Kallang and the Marina Barrage, to bring new life and excitement to the New Downtown and our city.

Sentosa, on the other hand, is suitable for a family-style resort, attracting families and tourists who are coming for a holiday. At Sentosa, investors are also prepared to spend $2 billion to $3 billion to develop an Integrated Resort. This will transform an area that is equivalent to the size of the Zoo and the Bird Park combined. It will bring to Sentosa a large scale, high quality anchor attraction which it has so far lacked. There will be theme parks, resort hotels, restaurants, shopping and many other attractions, enough to satisfy the critics who say there is not enough to do in Singapore. Here too gaming will occupy less than 5% of the total floor area allowed.

_Assessment
_

The conclusion from the RFC is that not only will the IRs be viable in Singapore, but there is a major market opportunity waiting to be tapped. The Bayfront and Sentosa developments complement each other. Each will attract

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a different type of visitor, and together, they enable Singapore to provide a broader range of offerings for tourists. Significantly, most of the investors stated that they would not reduce their investments even if we awarded both projects instead of one. Some even preferred two projects, because this would create critical mass and attract more visitors. This showed that they were not worried about competing for a finite local market. They intend to grow the market, to draw on the huge regional business, by bringing in new visitors to fill their IRs.

The IRs will change our downtown skyline and transform Sentosa into a truly high-quality resort destination. They will make Singapore a centre for tourism, business and conventions, and attract hundreds of thousands more tourists each year. There will be spinoffs to the rest of the economy, because not all the visitors to the IRs will stay there. Altogether, MTI estimates that the two IRs will create about 35,000 jobs, counting jobs within the IRs, plus spinoffs throughout the economy. These jobs in the hospitality sector will complement the jobs we are creating in other sectors, such as manufacturing, financial services or transportation.

The positive response from the IR operators is a tribute to Singapore's reputation, but it also reflects the attractiveness of the regional market. By acting now, we seize a window of opportunity to get ahead of our competitors. If we say no, the best proposals for the IR, together with the investments and the jobs, will most likely not disappear, but go somewhere else in the region. Then we will be forced to play catch up, and be in a much weaker position. As one Forum page letter said: "The issue is not whether we should allow a casino to operate in Singapore. If that was all, the Government's response is obvious. The real issue is whether an

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economic investment, comprising an overall tourist integrated investment project, running into billions of dollars, should be disallowed because of a gaming component." And that is the question we have to decide.

Evaluating the downsides

So from the economic point of view, there is no doubt that the IRs will be a major plus for Singapore. However, our considerations cannot just be economic. We must also address the non-economic issues - tangible minuses like an increase in problem gambling and broken families, and intangible losses, like the impact on Singapore's brand name and social values.

Social implications

The first implication of having the IRs is that people will gamble more, more people will get into trouble, and more families will suffer. This is the paramount and absolute consideration for many who oppose the IRs - social workers, religious groups, family-based VWOs and committees, and people who have had personal experience of family members gambling excessively. They have seen it. They have seen some of the downsides of people who ran into trouble gambling and they said absolutely not. We wish we did not have any such cases, anywhere in our society.

We have to assume that the IRs will increase the amount of gambling in Singapore. The question is, how much? This is not an all-or-nothing issue, because even without the IRs, there is much gambling going on, onshore and offshore, legal and illegal. Some people say it is in our blood. Every year, Singaporeans spend $6 billion on legal gambling in Singapore, six thousand million dollars, and another $1.5 billion estimated in cruises and offshore casinos.

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I ask how much they spend on illegal gambling but, alas, we do not collect the figures. But I think it is substantial. Looking ahead, gambling will become even more accessible, especially offshore, and on the Internet.

Our estimate is that with two IRs, gambling by Singaporeans in the resorts is unlikely to exceed $1 billion a year, which is only 15% of the current level. But, this does not take into account the IRs displacing other forms of gambling, or reclaiming some of the gambling which now takes place illegally or offshore. So the actual increase may well be less.

More gambling will mean more problem gamblers. But, again, this is not an all-or-nothing issue because we already have problem gamblers today. As the MCYS study shows, we are not so different from other Chinese societies in this respect, like Hong Kong or Macao. The question is what we can do to mitigate the problem, to identify and help problem gamblers and especially their families.

MCYS has studied the experience of many cities with casinos. The extent of their problem varies. It depends on what kind of visitors they are targeting, whether the regulations are effective, and the scale and spread of the gambling activities. But there are best practices which we can adopt to mitigate the problem.

We seriously considered banning Singaporeans altogether from gambling in the IRs, but eventually decided against it. There is no reason to exclude locals who can afford to gamble and would otherwise just go elsewhere. Further, some Singaporeans feel strongly against such discrimination against locals. The operators also told us that they needed some local business, although they know that this cannot be their main market. However, we will put in place

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comprehensive measures to minimise the social impact of casino gambling.

First, we will restrict the admission of locals. We studied many alternative ways to do this, and finally we decided to use price, and charge a high entrance fee, $100 per day or $2,000 a year, if you want the membership. $100 is more than the ferry ticket to Batam, and will deter many casual gamblers. This will apply only to Singaporeans and Permanent Residents.

Second, we will implement a system of exclusions. Those in financial distress, or receiving social assistance, will not be allowed entry. Singaporeans can also exclude themselves or close family members.

Third, the casinos will not be allowed to extend credit to locals, so as to make it harder for them to lose more than they can afford.

Fourth, we will make sure that some social good comes out of the gambling at the IRs. For other forms of gambling like horse racing, Toto and 4D, the profits are channelled to the Totalisator Board, which uses the money for charitable and worthy causes. For the IRs, we will similarly channel revenue collected from the entrance fee to the Totalisator Board for charitable purposes.

Fifth, we will set up a national framework to address problem gambling. This will include a National Council on Gambling, and also programmes to counsel and treat problem and pathological gamblers. The Minister for Community Development, Youth and Sports will elaborate on these measures later.

Brand name

The second risk of allowing IRs is that we may tarnish the Singapore brand

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name. Our reputation, built up over decades, is one of our most precious assets. Internationally, Singapore is known as being clean, honest, safe, law abiding, a wholesome place to live and bring up a family. We must not let the IRs tarnish this brand name.

The operators understand this. In fact, the operators want to come to Singapore because of our reputation for law and order, clean Government and strict enforcement. They want to work in a reputable jurisdiction, so as to enhance their own reputation and satisfy their regulators in their home countries, particularly the American regulators which are very strict. They too have an interest in ensuring that Singapore's brand name remains intact.

We are not aiming to become like Las Vegas or Macao, where gambling is the main industry. We will not allow casinos to sport garish neon displays on the façades, and have jackpot machines everywhere, from the lobby to the toilets. An IR will be as decent and wholesome as a SAFRA resort or an NTUC Club. The gaming area will be separate, so that visitors have to make a conscious effort to go there, and not be tempted to yield in a moment of weakness.

More importantly, we will deal firmly with the problems that tend to accompany casinos, such as organised crime, loan sharks, and money laundering. The Minister for Home Affairs will elaborate on this later on.

Other countries and cities with casinos have maintained their reputations. London, Sydney and Geneva are all respectable places to live, even though they all have casinos. All three are financial centres which depend on their reputations for integrity and rule of law, just like Singapore. We can learn from them how to stay abreast of the times, be

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exciting and cosmopolitan, and still be a safe and well-managed city.

Values

Third, we are also concerned that the IRs will undermine the values of our population, especially amongst the young.

Singapore has succeeded through hard work and perseverance, and never believing that there was a quick and easy way to get rich. It is critical that Singaporeans continue to have the right values, as individuals, as families and as a society, values that will help us make a living for ourselves, live upright lives, and endure as a nation.

If IRs erode our work ethic, undermine our values of thrift and hard work, and encourage Singaporeans to believe that the way to success is to be lucky at the gaming tables, then we are in trouble.

In the past, we could keep Singaporeans insulated from sin and temptation, up to a point, by not allowing undesirable activities in Singapore. It made sense to say no to a casino, because it was not so easy for people to travel to Macao, and not many could afford to go to Las Vegas or Europe. But today the situation is different. Singaporeans make more than four million overseas trips by air and sea a year. What is not available in Singapore is all around us. With or without an IR, we must work harder to keep our values intact, but we cannot do so by cocooning ourselves. As Deng Xiaoping said, when he decided to open up and reform China, we have to "open the windows, breathe in the fresh air, and at the same time fight the flies and insects."

So far, despite Singapore's openness, we have upheld our basic ethos of hard work, excellence, and an emphasis on

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families. There are strong countervailing forces against negative influences. Community and religious groups play an important role. Their vigorous response to the IRs shows that they are concerned about values, and will work hard to uphold them. Even though we have to proceed with the IRs against their preference, I am sure they will continue to teach their followers good values, and strengthen our society. For its part, the Government will continue to emphasise moral education in schools and promote wholesome values in our society, while the media play a role in setting the right tone in their reporting. We aim to be a decent and wholesome society, but not a puritanical or hypocritical one.

Religious objections

Finally, many Singaporeans, though not all, who oppose the IR, do so on religious grounds. The main religious groups have all made their views known. The churches, the Buddhist and Hindu groups, as well as MUIS and Muslim groups, have all stated their views. I have also received letters from many Singaporeans, especially Christians, expressing their objections on religious grounds.

I fully respect the convictions and teachings of the different religious groups. I also respect the religious choices and beliefs of individual Singaporeans. These are personal choices for individual citizens to make. Each person is free to follow his conscience, and abide by the teachings of his faith. But in a multi-racial, multi-religious society, the Government must maintain a secular and pragmatic approach. It cannot enforce the choices of one group on others, or make these choices the basis of national policy.

To those who object to the IRs on religious grounds, no economic benefit justifies allowing a casino here. The

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negative is absolute. But the Government has to balance the economic pluses against the social fallout and the intangible impact on values, and make this overall judgment whether to proceed. For the Government, the key consideration is what serves our national interest in the long term.

I am confident that despite this difference in perspectives, the religious groups will continue to work for the greater good of Singapore, in the context of our multi-racial and multi-religious society, with tolerance, compassion and mutual respect. Religious faith is a powerful force motivating Singaporeans to help their fellow citizens, not just gambling addicts, but everyone who is in need of help. I particularly hope that the religious groups will work together with the Government to help to build strong families, which are the basic units of a resilient and stable society.

The decision

Building the IRs is a major decision, although not a life-and-death matter. The Cabinet discussed the issues and trade-offs over and over again, both in Cabinet and also at our weekly Pre-Cabinet lunch meetings, before it took a final decision. Vivian Balakrishnan was our staff officer, but we were the ones who had to take the responsibility.

We took into account feedback from the public, our discussions with MPs, and all arguments for and against. Some members of the public think that we had made up our minds right from the beginning, even before this whole process of public discussion. But they are quite mistaken. In fact, the Cabinet started off mostly against integrated resorts. The views of Ministers mirrored the spectrum of views among the public. Some were for, others against. As we discussed the matter among ourselves, and understood better what the IRs actually involved, our views gradually shifted. When we saw the results of the

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Request for Concepts, we knew that we had to take the bids very seriously, and that if we said no there would be serious consequences.

We finally took the decision at a special Cabinet meeting convened on 9th April, a Saturday afternoon. Nearly everyone was present. Mr Goh Chok Tong was away in the Middle East, Prof. Jayakumar was on his way back from the Vatican for the Pope's funeral, and I think Mr Khaw Boon Wan was also absent. Everyone expressed his view, for or against. Those who were away had also made their views known. Even after so many discussions, Ministers were still not unanimous.

The first question was whether to have IRs at all. The answer was yes. Having settled that, the next question was whether to have one or two IRs. We decided on two IRs, because the Bayfront and Sentosa projects complement each other, because having two provides competition and critical mass, and because we believe that two projects will bring more economic benefits, without increasing the social cost commensurately.

This is a judgment, not a mathematical calculation. We see the trends, and feel the need to move. Whichever way we decide, there are risks. If we proceed, the IRs may not succeed, or the social fallout may be worse than we expect. If we do not proceed, we are at serious risk of being left behind by other cities. After weighing the matter carefully, the Cabinet has collectively concluded that we had no choice but to proceed with the IRs. As Prime Minister, I carry the ultimate responsibility for this decision.

Moving forward together

Despite our explanations, I do not expect Singaporeans to support the integrated resorts unanimously. Not everyone will accept the Government's

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reasons. The split is not between the old or the young, the rich or the poor, or the PAP or the Opposition. The views are deeply held and personal. As the Ministers hold different views, so too do MPs, and so too do members of the public. I have received many emails and letters from citizens, for and against the IRs. Some are from my personal friends, who feel strongly against the IRs and wanted me to know their views.

I respect those who oppose the IRs, and their views. We have decided to proceed, but it is not because we think those against the IR are wrong, or their reservations unimportant. Their reservations are valid and shared by the Ministers, even those who support the IRs. These reservations are the reason why the Government has said no to casinos for so long. But now we are confronted by a new situation, and the overriding need to remake our city and our economy.

I will meet the community and religious leaders to explain why we have to move, what safeguards we propose, and to ask them to work together with the Government to minimise the social impact.

I encourage MPs to speak up in this debate. Explain your stand, whether for or against the IRs, and help Singaporeans better understand what is at stake.

I thank Singaporeans for participating in the debate. Your views counted. They helped us to understand your concerns and the potential problems better. They demonstrated that Singaporeans can have a rational and constructive public debate on controversial and serious issues. But from here, whether you were for or against, let us put the differences aside and move on. Let us work together to make the IR a plus for Singapore - by

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bringing in more tourists, creating more jobs, and teaching Singaporeans about the risks and follies of gambling.

The IRs are an important step forward, but it is only one of many things we must do to remake our city, and build a new Singapore. This is a larger task, and one which requires the commitment and efforts of all Singaporeans. Let us continue to work closely together to realise this vision, and make ours a vibrant and dynamic cosmopolitan city in Asia.

The Deputy Leader of the House (Mr Mah Bow Tan): Pursuant to Standing Order No. 44, I beg to move,

That the Proposal to Develop Integrated Resorts be considered by Parliament.

Question proposed.

The Minister for Trade and Industry (Mr Lim Hng Kiang): Mr Speaker, Sir, the Prime Minister has explained clearly why the Government has decided to proceed with two Integrated Resorts, or IRs, after very serious deliberation. I wish to elaborate on the tourism and economic considerations.

Tourism has always been an important sector for the Singapore economy and not simply for the tourism receipts that visitors generate. The more attractive we are as a tourist destination, the easier it is for us to develop our convention and exhibition industry, and grow as an aviation hub.

However, our tourism sector has faced major challenges over the past decade. Our total arrivals and tourism receipts have declined. Between 1993 and 2002, visitor arrivals stayed relatively stagnant at about 6.5 to 7.5 million visitors. Over the same period, tourism receipts fell by 17%, from S$11.3 billion to S$9.4 billion. The tourism sector has not been keeping up with the growth in the rest of the

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economy and consequently tourism's contribution to our GDP was reduced by half, from 6.1% in 1993 to 3% in 2002.

These developments did not take place because the prospects for tourism in the region had dimmed. On the contrary, tourism traffic grew strongly in the Asia Pacific, at about 6.4% each year. With our tourism earnings falling at a time when the regional tourism market is expanding, this means that our slice of the tourism pie is getting smaller. Singapore's share of the Asia-Pacific tourism receipts fell sharply, from 13.1% in 1993 to 6% in 2002.

How do we explain this? One key reason is that we have not been investing sufficiently in quality tourism products. Remember, we start off with a handicap. We cannot boast breathtaking scenery or spectacular wildlife. Being a young nation, we do not have historical relics or world heritage sites. We do not even enjoy seasonal variation that gives rise to specialty attractions like the sakura in Japan, the foliage of New England or the ice sculptures of Harbin. Under such conditions, having compelling man-made tourism products becomes vital in attracting visitors.

Apart from a number of sizeable investments in cultural attractions such as the Esplanade and the museums, we have not made major investments in tourism attractions over the past decade. The last significant investment in a tourist attraction was really the Night Safari in 1994. Moreover, several tourism investments made in the early 1990s turned out unsuccessful, like the Haw Par Villa, Tang Dynasty, Asian Village and Fantasy Island.

At the same time, our competitors are not standing still. Many cities have been aggressively investing in new tourism products to attract visitors. Some of our innovative "success formulas" are being

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copied. For example, Night Zoos can now be found in Guangdong, Sichuan, Malacca and Cairns, with another soon to open in Chiangmai. The Underwater World in Sentosa was novel when it first opened in 1991, but such aquariums now exist in many cities. Some are bigger than ours.

Other destinations are coming up with ever bigger and bolder plans to "wow" tourists. Hong Kong's Disneyland is due to open later this year. Dubai is having its own version called "Dubailand" - a comprehensive tourism, leisure and entertainment city.

We have been successful so far as a convention city but others are catching up. Kuala Lumpur and Bangkok aspire to be successful convention cities. Macau has reclaimed land for the COTAI Strip where a total of 10,000 hotel rooms are planned for Phase 1 development. Venetian Macau, the centrepiece of this COTAI Strip, will have 1 million square feet of convention and exhibition space, a 2,000-seat theatre, and a 15,000-seat arena. Macau will also be a major Meetings, Incentives, Conventions and Exhibitions (MICE) competitor to Singapore once the COTAI development is operational in 2007. So, to keep ahead, we cannot afford to make merely incremental improvements.

The clear trends emerging in the global tourism industry showed us that the number of tourists from this region will double by 2015. This is fuelled by the growth of the middle class in China and India, as well as the falling costs of air travel.

Opportunity is knocking on our door. We can take full advantage of this opportunity, but only if we are prepared to act boldly. It is in this context that the Government decided to proceed with the two IRs.

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I must emphasise that the two IRs are by no means our only response to the challenges we face in growing the tourism sector. The Singapore Tourism Board has been hard at work, attracting other investments in the tourism sector. It is also leading efforts to revitalise the Singapore River and Orchard Road. Having an IR, therefore, will complement our many efforts to remake Singapore as a tourist destination.

It is worthwhile, at this juncture, to paint once again the picture of the sort of Integrated Resort that the Government is considering. In the course of the nation-wide debate on the IR, it became clear at times that people were talking at cross-purposes because they had different mental pictures of the IR. Many drew conclusions based on their personal experiences at the old Macau, Genting, Batam, Australia, or just on the cruises to nowhere.

Let me be clear. The Government is not interested in a stand-alone gambling hall that offers only table games and slot machines. In fact, if we were building just a gambling hall, we would not be able to attract large numbers of tourists. Tourists would not fly many hours to visit a casino that can be found nearer their homes. So what would make tourists come to Singapore?

If you look at casino developments around the world, you would find that they form an entire spectrum. At one end of the spectrum, you would find the exclusive gambling clubs in London or the exclusive casinos in Monaco. Next in the spectrum would be casinos situated in hotels like in South Korea. Then you have stand-alone casinos like those in old Macau. They can be more upmarket or downmarket. Next, in the spectrum, some operators would include some entertainment elements in their casino

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facilities like on cruise ships, in Genting, Perth or Melbourne. At this end of the spectrum, you would find large scale entertainment developments with a small gaming component in it, like some of the recent developments in Las Vegas.

This is what an IR is all about.

The Integrated Resort that we envisage in Singapore is a large-scale development offering multiple world-class attractions. We are not talking about one or two hotels of several hundred rooms with a casino attached. We are talking about an entire complex of classy hotels, luxury shops, fancy restaurants, spectacular shows, convention centres all found in one single destination. The gaming component will occupy not more than 3-5% of the total area of the IR development. Visitors are drawn to the resort not because of gambling, but because it offers a wide range of world-class leisure and entertainment choices, with something for everyone. Casino gaming is an important part of the mix, but only a part. Examples of overseas IRs that we are looking for include the Bellagio and Venetian in Las Vegas, as well as the Atlantis in Bahamas.

More importantly, we are looking for IR operators with the "software" to market the resort extensively and transform the world's view of Singapore as a tourist destination. This involves high-end, innovative marketing and distribution that secures international prime-time media coverage, and access to an exclusive network of top artists and performers. The best IR operators can secure world-famous celebrities to grace their resort, and persuade TV executives and film-makers to use their resort as a backdrop. This maximises the global exposure of the destination and ensures that it is one of the first things that come to people's minds when they plan a vacation. This kind of marketing ability will greatly boost our own efforts at branding Singapore, such that it becomes

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widely recognised as a leading city in the Asia-Pacific, the way New York, Paris and London are regarded as leading cities in the West.

As the Prime Minister explained, we received a total of 19 submissions when we conducted a Request for Concepts (RFC) to test the viability of an IR in Singapore. This showed that there is serious interest from world-class companies. Many of these companies have extensive and impressive track records for developing, managing and marketing successful world-renowned Integrated Resorts.

We also learned from the RFC exercise that the economic benefits from this project are substantial. The proposals envisage investments in the order of $5 billion for the two IRs, direct employment of more than 10,000 jobs.

Critics may point out that Singapore is also capable of landing investment projects of this order of magnitude in the other sectors, such as manufacturing. This is true. But, as I had earlier described, success in tourism will stimulate many other sectors of our economy. The IR will help to revitalise our tourism sector and enhance our appeal in hosting conventions and exhibitions, and strengthen our status as an aviation hub. This is why the economy-wide impact of two IRs, taking into account direct and indirect effects, is huge. With the two IRs, the incremental annual GDP is estimated to exceed S$1.5 billion and total incremental employment is about 35,000 jobs.

In addition, our analysis suggests that the consequent growth in the tourism pie would be more than what the Integrated Resorts alone could absorb. Therefore, overall, there will be a net positive benefit for existing players, with spin-offs for the whole tourism industry and the overall economy. This addresses concerns that

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the Integrated Resorts would negatively impact on existing businesses.

Some of the prospective investors have released elements of their proposals to the media. Architects like Daniel Libeskind; museums like the Guggenheim; theme park operators like Universal Studios. I am not at liberty to divulge what is not already in the public domain so as to safeguard the proposers' competitive and intellectual property interests. But I can say that what the prospective investors have not divulged is as impressive and exciting as those elements which they have made public.

Another reason why Singaporeans may find it hard to imagine the impact that an IR would create has to do with scale. Let me illustrate with an example. If I were to say that one of the attractions in the IR would include an aquarium, the average man-in-the-street might think of the seawater aquarium in the basement of Wisma Atria, or the Underwater World in Sentosa, and think, "Well, that doesn't sound so extraordinary." But what if I said the aquarium would be large enough for a whale to freely swim around? That gives you an idea of the scale of the project that we are looking at.

Scale, innovation and top-class creative talent are key to the IR's appeal. These are the elements that will produce a "distinctive and lasting visitor experience". What exactly does this phrase entail? It does not just mean having a good time for a couple of days. It does not just mean building something that is hip, chic, cool, or happening. It means keeping millions of individuals, groups and families entertained, excited and intrigued. It means creating happy memories that people will cherish and share enthusiastically with all their friends and relatives. It means people will actually regret if they cannot make it to Singapore.

I am confident that among the concepts that have been proposed to us

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are projects that are capable of creating this "distinctive and lasting visitor experience" for all those who visit us.

During the course of the debate on the pros and cons of having an IR, some people have asked me, "Why can't we have an IR without the casino?" If investors are willing to develop a similar entertainment product without a casino on their own, we warmly welcome these investments. But, in reality, none of them have done so because these large-scale projects are not viable without a casino or some form of government funding. For example, out of the total project cost of S$5.8 billion for Disneyworld in Hong Kong, the Hong Kong government is committing a total of S$4.8 billion. This is unlike the Integrated Resorts that we are attracting which will entirely be driven by private sector funding.

We should not be surprised by this finding. If indeed it is true that non-gaming amenities are viable on their own, savvy investors would have jumped on this opportunity already. They could trigger any site on URA's reserve list, or approach the URA or Sentosa Development Corporation directly, but none have done so. Even for the RFC exercise whereby investors were not required to include a casino, none of the submissions came without the gaming component.

This is because the casino is the economic engine that generates the bulk of the profits for the resort. The higher profits from gaming are used to offset the lower profits of the non-gaming attractions, which are vital to drawing large numbers of visitors to the resort. This will in turn feed traffic to the casino and generate gaming profits. It is this symbiotic relationship between the gaming and non-gaming components that keeps the Integrated Resort viable independently.

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Mr Speaker, Sir, today, we face a small window of opportunity. Only recently have top IR operators started looking at expanding their operations to Asia because their own home markets have matured. Just a few years ago, we would not have garnered the same level of interest from them even if we were prepared to consider establishing an IR. Now, Singapore could be an early-mover in the region to develop an iconic, world-class Integrated Resort.

With this decision, we can now move on to the next stage and launch a Request for Proposals (RFP) in the second quarter of 2005. The RFP would close in the third quarter and we would award by the end of 2005. This would mean that Integrated Resorts would be operational around 2009.

We have seen that the economic benefits of the IRs are considerable. While there are valid concerns about the social impact of casino gaming, the Government is prepared and committed to put in measures and resources to control and mitigate it. This leaves us still with one important consideration.

A sentiment voiced directly or indirectly by a large number of Singaporeans goes beyond its social ills of gambling. They are concerned that a casino would change the tone of society that we have so carefully nurtured over the years.

I am sure we will debate this point thoroughly over the next few days. I can only say that if the Integrated Resort would put the future of Singapore as a safe, wholesome society at grave risk, then we would not have supported it. The Swiss Minister for Economic Affairs was in Singapore two weeks ago. Switzerland allowed casinos five years ago. The Swiss Minister told me that they decided to allow casinos because

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casinos were already freely available across their frontiers. They decided they cannot stay put. I think we are in a similar position. We cannot stand still either. Has the reputation of Switzerland as a trusted financial centre, a land of hardworking people, or a wholesome society suffered as a result of having casinos? The answer is no. So I am confident that with adequate safeguards, we too can preserve our societal values with the Integrated Resorts.

Mr Speaker, Sir, the Integrated Resort is neither the panacea to all our economic challenges nor will it destroy our social and moral fabric, or the strong foundations on which Singapore is built. We have to adopt a holistic and realistic perspective, look at all the relevant facts, make sure the economic benefits are real and not fluff, and put in place the necessary measures to contain the downside social impact. This pragmatic approach has served Singapore well in the past, and we should approach the Integrated Resort in the same manner.

The Integrated Resort is one of the many strategies that Singapore is pursuing to boost its tourism appeal and generate economic growth. Whilst it is not the only strategy in our tourism masterplan, the two resorts will serve as the engine of our leisure sector and bring in significant and widespread benefits for Singapore. We should move boldly and swiftly, and seize this opportunity to entrench our hub status, before it is too late.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.35 pm .

Sitting accordingly suspended

at 4.12 pm until 4.35 pm.

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Sitting resumed at 4.35 pm

[Mr Speaker in the Chair]

Debate resumed.

The Minister for Community Development, Youth and Sports and Second Minister for Trade and Industry (Dr Vivian Balakrishnan): Mr Speaker, Sir, over the past one year, the Integrated Resort project has weighed very heavily on my mind and conscience. I share all the anxieties and the reflex discomfort which many Singaporeans have expressed so sincerely and candidly. In fact, this intense passionate debate that we have had shows that Singaporeans care deeply for this country, their families and, indeed, we care for each other.

Mr Speaker, Sir, all forms of gambling, taken to excess, have the potential to destroy the lives of those who become addicted. This is a clear and present danger. The MCYS study showed that 2.1% of our population may be at risk of addiction. However, for those individuals who are afflicted by this addiction, that statistic is meaningless. For that person and that family, the figure may as well be 100%. Every Singaporean destroyed by gambling addiction is one too many. And it is not possible to place a dollar value on one life or one family's happiness lost.

At the end of the day, therefore, I had to be sure that our society as a whole could withstand the social impact, and that we were not going to make things worse overall. What became clear to me very early on was that simply banning a casino was not the solution.

Firstly, many Singaporeans already gamble and have easy access to casinos. Almost six out of 10, ie, 58%, have gambled at least once in the last 12 months, and 40% of all Singaporeans gamble regularly at least once a week. And Singaporeans will have even more options, as new mega casinos are built in

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neighbouring countries. A "prohibitionist" approach is not realistic in this day and age. If we ban casinos altogether, we would only end up missing out on the economic benefits, and yet not achieve any insulation against casinos. We would still have to pay the social costs, but worse, we would not have the ability to control or regulate these casinos right at our doorsteps.

Secondly, and I believe more importantly, not all Singaporeans are vulnerable. Whilst many participate in gambling, the vast majority do not develop problems, and only a small minority is at risk. This figure of 2.1% did not come as a surprise to us. It is comparable to the rate in Hong Kong (1.9%) and Macau (1.8%), and all these three societies are majority-Chinese urban societies. Hong Kong does not have a casino; Macau has many. Yet, the prevalence in all these three places is almost identical. It is not clear how many more Singaporeans will gamble just because casinos are available locally, especially when we have imposed onerous entry restrictions. But what is clear is that there will always be a vulnerable segment of our population. Our approach therefore is to focus on this vulnerable segment, on this group at risk, and to implement specific targeted measures to identify, treat and mitigate the negative social impact on this group. We will, therefore, put in place both generic measures to deal with all forms of gambling, as well as specific measures for the casinos within the integrated resorts.

Using such an approach, I believe Singapore can reap the benefits of the integrated resorts with properly regulated casinos, whilst dealing with problem gambling in the minority of our population who are exposed to gambling anyway. My Ministry, together with the Ministry of Health and the Ministry of Home Affairs,

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will be developing a national framework to address problem gambling, and there are six elements to this framework.

First, public education; second, counselling and support services at the community level; third, the availability of professional medical treatment for compulsive gamblers; fourth, more research on the social impact of gambling; fifth, the establishment of a national council on gambling; and, sixth, the establishment of a strict regulatory and enforcement regime.

The Minister for Home Affairs will speak more about the regulatory and enforcement regime, so I will elaborate on the other elements.

First, on increased public education. Our most immediate task is to raise public awareness of problem gambling. In this respect, this healthy and passionate debate that has been going on outside this House has been very useful. It has put the spotlight on the dangers of problem gambling and it will, hopefully, help warn people about the risks of falling prey to gambling addiction.

Mr Speaker, it is much better to have a well-informed population capable of exercising responsible choices rather than to hope that people will not gamble simply because of a lack of opportunity.

Next, we would need to work with our community partners who will have a crucial role to play. We have asked all our 36 Family Service Centres (FSCs) and the five Community Development Councils (CDCs) to provide more information on gambling addiction to the public. The staff at the FSCs and CDCs will be trained to check for compulsive gambling symptoms amongst their clients, and they will also be able to provide basic counselling and advice. If they detect a significant gambling problem, they will refer the gambler to more specialised services.

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The specialised treatment services will be available at the Institute of Mental Health under the programme with the acronym CAMP, which stands for Community Addictions Management Programme. This centre currently provides treatment and counselling for gambling addicts. The team consists of psychiatrists and psychologists, and this team and their services will be expanded over the next few years. They will also be able to provide other forms of counselling and support that compulsive gamblers may need, such as financial counselling. The Minister for Health will elaborate more on the plans for the expansion of CAMP later on.

MCYS and the National Council for Social Services (NCSS) will work with one or two family service centres to provide specialised intervention services and programmes at the community level. These specialised intervention centres will handle referral cases from other family service centres, and they will also provide step-down care for stabilised cases from the Institute of Mental Health. Social workers will work with the gamblers and their families to deal with their addictions within a community setting. They will also facilitate the formation of self-help groups like Gamblers' Anonymous, which is akin to Alcoholics' Anonymous. Some of these groups will begin under the CAMP programme but, as the members improve and increase in their ability to deal with the problems, these groups will then move out to the specialist family service centres or the counselling centres. Both CAMP and these specialist agencies will set up and jointly operate a hotline for gamblers and their families, so that anybody who feels he needs help can do so.

Research is important and we need to have accurate reliable data in order to formulate our policies and implement our plans in the future. The recent survey which we conducted is a case in point,

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and we will be repeating such surveys at regular intervals, so that we will be able to better characterise and quantify the prevalence and impact of gambling in Singapore.

Next, we will set up a National Council on

Gambling this year to advise the Ministry on the public education programmes. It will also decide on the allocation of funding for preventive and rehabilitative programmes initiated by the social service sector. It will coordinate with the Institute of Mental Health on the treatment programmes for gambling addicts as well as assess the overall effectiveness of the treatment, counselling and support programmes.

This Council will have 10 to 12 members with expertise and experience in public communications, counselling and rehabilitative treatment and services. The members will be appointed by MCYS for a two-year term. I hope that some social leaders who have worked so hard to highlight the dangers of gambling during this debate over the last one year will consider serving on this council. Their insights and contributions will be valued by us.

Overall, our preliminary estimate is that the start-up cost will be about $20 million and that there will be an annual recurrent expenditure of $40 million. And these costs also include the cost of the regulatory agency as well as the expansion of the CAMP programme.

This national framework that I have outlined will apply to all forms of gambling. Now, let me focus on the casino within the Integrated Resorts specifically.

The project team studying the potential development of the IRs visited several major jurisdictions with casinos.

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We went to Nevada, Bahamas, Macau, Australia and London. We held in-depth discussions with Ministers, policy makers, regulators and research bodies in these countries. We studied carefully their social safeguards, their legislation and their regulations with a view to implementing the best of its kind within Singapore.

Let me assure this House that we have put together a comprehensive set of social safeguards - safeguards that are more stringent than those in many other jurisdictions and safeguards which we will enforce strictly. I also want to reassure this House that we will not compromise on the social safeguards at any point in time, just in order to improve the economic viability of the casino. Let me highlight four of these safeguards.

Firstly, we will impose a casino entry levy on all citizens and Permanent Residents. The levy will be $100 per day or $2,000 for annual membership. This levy is intended to send a clear message that gambling is an expense. Each time you enter the casino and show your membership card or pay the $100, we want to remind you that gambling is not a way to make a living. At $100 a day, this levy will also discourage impulse gambling. I would also like to remind this House that every dollar that is generated from this entry levy would go to the Tote Board and would be used for charitable purposes for our society.

Secondly, we will have an exclusion system because I recognise that for an addict, simply levying a $100 will not be enough of a deterrent. So we will allow spouses and family members to implement an exclusion clause. This is in addition to the person himself being able to bar himself from entering the casino. We will be the only major jurisdiction, apart from South Australia, to have such a family exclusionary clause. MCYS will

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consult the family sector on how best to operationalise such a measure.

In addition, we will also exclude from the casino persons who are receiving publicly funded social assistance programmes, persons who are bankrupts and persons with a poor credit record. The operational details for such exclusions will also have to be formulated carefully and sensitively.

We will enact legislation to implement these exclusion measures. The Ministry of Home Affairs will set up a casino regulatory agency. Members of this House can be rest assured that these measures will be enforced strictly.

Thirdly, we will prohibit the extension of credit to residents who gamble in the casinos. Future earnings should not be used for gambling. The casino operator will not be allowed to accept credit cards or post-dated cheques, nor will they be permitted to extend credit to local residents. The only exception would be for resident premier players. But to qualify as a premier player, you will have to deposit no less than $100,000 upfront.

Finally, we will not allow any form of advertising of the casino in our local mass media. This is because we do not want advertisements to promote gambling. If you do gamble, do so on your own account with your own money and realise that it is an expenditure, realise that gambling should never come ahead of the more important needs of your family.

Sir, the reality today is that many Singaporeans do gamble. They gamble in casinos nearby, on cruise ships or they gamble on sports, horse racing, 4D, Toto and many other gambling products, both legal and illegal. Fortunately for us, most Singaporeans do not develop problems with their gambling habits. Most Singaporeans are able to exercise self-restraint and to fulfil their responsibilities to their families.

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Nevertheless, there have been tragic incidents when families have been ruined or lives cast away because of this addiction. It is our job to acknowledge this and the Government is therefore committed to specifically identifying and helping these addicts and their families.

Sir, we are not embarking on this project lightly or blindly. We will put in place a national framework to deal with problem gambling. We will impose stringent social safeguards for the casino. We will monitor and enforce these safeguards strictly. We will also commit all the necessary resources to help the more vulnerable members of our society.

The Minister for Home Affairs (Mr Wong Kan Seng): Mr Speaker, Sir, when the idea of a casino was first raised a year ago, I was not for it. My reason against a casino then and now is not one of personal morality or religious belief. Rather, my concern is over the change in the ethos and tone of our society which a casino may bring about.

I am concerned whether a casino would erode the Singaporean work ethic. Our achievements as a nation over the past four decades have been built on hard work and a meritocratic system. We do not want to promote the idea that depending on luck at the gambling table, rather than personal diligence in doing an honest day's work, is the route to making money.

I am concerned that Singapore's image as a safe and secure place will be tarnished. People know us as a safe, secure and wholesome place to bring up families. We have a gold standard reputation which is admired by many who desire a safe and secure home. With a casino, there could be an increase in organised crime and law and order issues, like illegal money lending, prostitution, money laundering and criminal gangs.

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Both Singaporean and foreign criminal elements may think that they can exploit the situation to perpetrate their criminal activities.

Another concern is that a casino in Singapore would increase the incidence of problem gambling. Apart from more families having problems and more individuals facing bankruptcies as a result of casino gambling, there is a strong possibility that such people with gambling problems will turn to crime to feed their gambling habit. A recent study on gambling by the Commercial Affairs Department of the Police found that many pathological gamblers turn to crime to feed their addiction.

One high profile case is Chia Teck Leng, the former finance manager of Asia Pacific Breweries, who was sentenced to 42 years in jail in Singapore's biggest ever case of commercial fraud. He embezzled more than $110 million as he got deeper and deeper into debt while gambling in casinos around the world.

Recently, Chia wrote a paper "Taming the Casino Dragon" to share his thoughts on the casino debate. This was published in the newspapers a couple of days ago. Chia provided an interesting insight into the operations of the casino business. He also suggested various safeguards for the Singaporean punter and against casino-related crime. Chia has had a bitter experience which he has paid dearly in personal and material losses. In a dispassionate manner, he set out the negative impact of a casino on the social and crime fronts. But despite all these, his conclusion is that a casino will have an enormous positive impact for our economy.

The economic case

Sir, the question for Singapore, therefore, is whether we can afford to

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ignore the very significant economic potential of an Integrated Resort with a casino as a boost to our tourism industry. Right from the start, there was consensus in Cabinet that if it was just purely a stand-alone casino, then it was a "no-go".

The Cabinet decided that we should explore, in more tangible terms, whether there is an economic case for an Integrated Resort, so that we could more clearly appreciate how the potential benefits stack up against the potential social cost.

The Singapore Tourism Board's invitation for concepts attracted 19 submissions. Having seen these submissions, the possible investments to be made and the jobs to be created, I can see the potential attraction of the Integrated Resort as an economic case to revitalise our tourism attractions which have become lacklustre over the years. If two Integrated Resorts are built, the prospective investors could invest up to some $5 billion and create about 35,000 jobs for the whole economy. I found the economic case compelling and concluded that these Integrated Resort proposals cannot be lightly dismissed.

The decision

Frankly, a safe option is to maintain the status quo and not to proceed. This way, we defer the issue and avoid making those who have personal, moral or religious objections to the casino unhappy. I understand and respect the views of those who have expressed strong moral, ethical or personal objections. However, I must also take into account the wider and strategic long-term interests of Singapore and all Singaporeans.

What is clear to me is that in an intensely competitive and dynamic economic environment, we cannot afford

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to ignore opportunities for growth. If Singapore sticks to safe options, with tried and tested solutions, we will stagnate. If we fail to seize and act when a window of opportunity opens, we may regret taking such a cautious approach if the projects go to other cities in the region.

The world has undergone great changes and so has our region. For instance, with China booming and its citizens travelling abroad in the millions each year, and with the numbers growing as they become wealthier, I am concerned that we will miss out on the opportunities to attract them to Singapore. We cannot afford not to take steps to advance our economic interests and stay ahead of our neighbours. Just as there are risks in proceeding, we must be clear that there are also costs to Singapore for not acting. Moreover, if we do not try, we will never know whether we would have generated significant economic benefits and, at the same time, managed the social costs.

Sir, it is finally a judgement call, and on the balance of probabilities, we need to act in favour of what brings more benefit to Singapore and Singaporeans. There is no doubt that considerable risks are involved. The robust debates we have had in the media and even in Cabinet show that most of us are aware of that. Having heard all the arguments and studied the economic case, putting aside my personal views, and taking the national perspective, I thought seriously about the options we have and the cost of having or not having an Integrated Resort with a casino. Personally, I am still ambivalent about having the casino. But the significant economic and larger national interests at stake persuaded me that we must give the Integrated Resort with casino option a try.

The PM and Cabinet have taken a decision. I share in the collective

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responsibility for this decision. I will do everything possible to minimise any negative impact which may arise from the Integrated Resort with casino.

Managing the impact

Sir, since last year, the Ministry of Home Affairs and the Police have been studying the possible impact of a casino on the law and order situation in Singapore. Some research studies in other countries have shown that the casino factor has accounted for an increase in crime rates. For example, the Australasian Centre for Policing Research found what appears to be a causal link between excessive gambling behaviour and criminal activity. The nature and frequency of criminal activity seem to be directly related to the extent and duration of involvement in gambling activities.

On the other hand, other studies have shown that communities with casinos are not worse off compared to those without casinos. The United States National Gambling Impact Study Commission's 1999 report analysed data from 100 communities with varying degrees of proximity to casino gambling, and concluded that casino gambling has had no effect on the rates of serious, violent or property crimes.

The evidence from the various research studies is, therefore, inconclusive. It would appear that, while having a casino in Singapore raises the possibility that there could be a negative impact on the law and order situation here, it is not a foregone conclusion. Study visits by the Ministry of Home Affairs and the Police to various jurisdictions with casinos in the United States, Australia and the United Kingdom seem to suggest that, with proper controls and adequate resources, casino-related law and order problems are manageable and can largely remain under control.

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Singapore's record in dealing with crime

Sir, Singapore has been able to deal with other social vices and negative addictions in the past. Our response to narcotics and illegal drugs, which are highly lucrative businesses controlled by international syndicates, has been decisive and effective. Sustained action against secret societies and organised crime has kept the situation under control.

We will adopt the same strategy of comprehensive, tough and decisive action against any threats to our law and order situation arising from the casino. We will also work closely with the Ministry of Community Development, Youth and Sports and the Ministry of Health to implement the comprehensive national framework to deal with the social impact of gambling, including casino gambling. While the Ministry of Home Affairs will oversee the regulatory and enforcement aspects of casino gambling, the Ministry of Community Development, Youth and Sports will cover the social safeguards and preventive public education aspects. In addition, the Ministry of Community Development, Youth and Sports and the Ministry of Health will look at the treatment of those with gambling problems. All three Ministries will work closely together to implement this framework.

MHA's plan of action

Sir, let me now highlight what the Ministry of Home Affairs plans to do to deal with potential law and order issues relating to the casino.

Singapore will not be the first country to have a casino. We can, therefore, benefit from benchmarking ourselves against other jurisdictions that have much more experience in regulating casino operations. The Ministry of Home Affairs

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and the Police have studied the structures and strategies of law enforcement agencies in the United States, Australia and the United Kingdom. We will adapt the best practices for Singapore. As we gain greater experience, we will refine them to fit our social context and circumstances.

Casino Regulatory Authority

One of the key institutions to help manage the social impact of having a casino in Singapore will be the casino regulator. The Ministry of Home Affairs will set up a new regulatory agency to regulate the casino. The casino regulator will put in place a strict regulatory regime to ensure that the casino remains free from criminal influence and that illegal activities on the premises are kept under control.

The full details on the casino regulatory regime are still being worked out. Today, I shall highlight some key measures that the regulator will implement to regulate the casino operations.

Sir, we recognise that having the right owners, managers and employees will be important to pre-empt the infiltration of criminal elements and money laundering syndicates into the casino operations. The regulator will, therefore, screen the principal shareholders, directors, key managers and employees involved in gaming, not just once-off, but over regular intervals.

The regulator will also monitor the casino's relationship with its vendors, suppliers and agents. Contracts between the casino and its vendors and suppliers above a certain threshold will be scrutinised. The regulator will have the right to require that the casino does not enter into contracts with vendors and suppliers which are deemed unsuitable,

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due to suspicious backgrounds, or known involvement in criminal activities. Casino agents or junket operators who bring in premium players from overseas will also be screened and licensed.

To combat money laundering activities, we will adopt international best practices in tracking suspicious transactions. The regulator will require the casino to record transactions of S$5,000 and above. Transactions of S$10,000 and above and all other suspicious transactions will have to be reported to the regulator. The casino will also be required to keep all relevant records for a minimum period of seven years. In addition, the casino will be required to set up a dedicated security team and a comprehensive CCTV surveillance system to ensure security within the casino premises.

The regulator will also work closely with the Ministry of Community Development, Youth and Sports to ensure that the social safeguards are strictly enforced. The Minister for Community Development, Youth and Sports has elaborated on these earlier on.

Enhanced law enforcement

Sir, the regulator will work closely with the Police to manage the law and order situation within the casino. In addition, the Police will implement measures to ensure that the overall law and order situation remains under control.

Police will set up a dedicated Casino Investigation Branch within the Criminal Investigation Department (CID) to detect and investigate crimes that take place in the casino. We will have Police presence on the periphery of the casino to deter robbery and snatch theft cases, as well as prevent the proliferation of vice and illegal money lending activities. Where necessary, CCTV systems will be installed in the surrounding areas to enhance

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security. Police will also build up its intelligence capabilities and strengthen cooperation with other police forces to exchange information and intelligence on gaming syndicates and other related criminal activity.

Police will take sustained enforcement actions against prostitution, adopting a zero-tolerance approach towards women soliciting in the areas around the casino. The casino will also be required to take the necessary measures to prevent women from soliciting within the casino.

On the issue of illegal money lending, we will take a holistic approach to tackle the situation. The Ministry of Home Affairs has been studying this issue for some time now. Last year, independently from the casino debate, Police established a dedicated taskforce to look into measures to deal more resolutely with illegal money lending and harassment activities. We are exploring the introduction of tougher legislation to deal with illegal money lenders. Other measures being studied include tightening the change of address procedures and installing CCTVs when innocent victims are harassed by illegal money lenders.

Strong action will be taken against any criminal syndicate leaders, whether local or foreign, who try to exploit the presence of casino operations. If necessary, we will detain them under the Criminal Law (Temporary Provisions) Act and confiscate all ill-gotten gains using the Corruption, Drug Trafficking and other Serious Crimes (Confiscation of Benefits) Act. In addition, we will consider enacting new laws or amending existing ones to deal with any threat to the law and order situation.

On problem gambling

However, we must also proactively develop our understanding on how we can prevent or minimise the risks of those for whom harmless, recreational gambling can become compulsive and pathological.

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As part of the Ministry's efforts to assess the potential impact of casino gambling, the Commercial Affairs Department recently interviewed ten prison inmates who had committed commercial crimes like criminal breach of trust, money laundering, cheating and forgery and who had gambling problems. The study aimed to gain a better understanding of the factors that led such persons to become pathological gamblers and eventually resort to crime. More of such studies need to be conducted.

Singaporeans must be aware of the dangers and the warning signs so that they can keep themselves, as well as their family members and friends, out of trouble by seeking timely help in counselling and treatment when needed.

Mr Speaker, Sir, dealing with casino-related criminal activities will be a new and challenging task for the Ministry of Home Affairs and the Police. We will be scaling up our capabilities and preparing ourselves to deal with the situation. Our study of other jurisdictions with casinos shows that, with proper controls and adequate resources, casino-related law and order problems can be kept under control. Also, our proven track record in clamping down on secret societies and drug syndicates gives us a measure of confidence that our police officers can deal firmly with these problems.

I would like to assure this House and the people of Singapore that my Ministry will spare no effort to help ensure that Singapore remains a safe and secure best home for all Singaporeans.

The Minister-in-charge of Muslim Affairs (Assoc. Prof. Dr Yaacob Ibrahim): Mr Speaker, Sir, I would first like to thank the Prime Minister for his detailed explanation on the Government's decision on the Integrated Resort, and the rationale for

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having a casino as part of the resort. Sir, I have met with various groups in the Malay/Muslim community and heard many views on this issue. Taking into account these views, I would like to respond on what this decision means for our Muslim community here, going forward.

Sir, the Singapore Muslim community has built up our way of life founded on Islamic beliefs and principles, and the Singapore system has provided opportunities for all. We have worked diligently over the years to contribute to Singapore's success. We have striven to preserve our values and, at the same time, made practical adjustments amidst changing social circumstances. Our approach, which is true to our religion, and yet pragmatic in its outlook, has enabled us to live as good Muslims in a multi-racial and multi-religious society, and contribute to Singapore's economic and social development over the years.

The idea of having a casino in Singapore has met with considerable concerns within the Muslim community. As Muslims, we are against gambling. Many respected members of the community have rightly expressed concerns on a possible casino because Islam prohibits gambling. Others have also pointed to the possible social ills that this proposal could potentially bring about and have, therefore, opposed the proposal.

Hence, having raised our concerns, many in our Muslim community will be disappointed with the decision to proceed with the proposal. Nevertheless, there are many things that exist around us which we do not agree with as Muslims, but accept as part of the wider landscape. Gambling, drinking and other activities that Muslims consider vices are not banned in Singapore. We understand that in our multi-ethnic and multi-religious

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society, it is not tenable for Government policies to be dictated by the views of one or any groups. If we go down that road, then should we ban abortion or the use of condoms because some religious groups are against them? Or, should we ban the sale of meat in line with the convictions of groups who believe that animals should not be slaughtered for food? It is in the interest of all Singaporeans that policies are not dictated by the views of any group.

Along these lines, the way we approach the casino issue should be consistent with the way we have approached similar issues, such as the consumption of alcohol. We recognise that it is haram or forbidden,

socially undesirable, but nonetheless an accepted social practice in some communities. Is it tenable, therefore, for the Government to go all out and ban such vices? No. Does Government limit access to and educate us against such vices? Yes. Does it protect vulnerable members of society from such vices? The answer again is yes. In the case of alcohol, for example, licensing requirements and age requirements restrict access to alcohol consumption. Likewise, regulatory provisions will apply to casinos. Age requirements, provisions for the exclusion of vulnerable individuals and other measures will restrict access to the casino and protect vulnerable members of society. As with other addictions, the Government will also provide social services and rehabilitation support to gambling addicts and their families.

In examining the casino issue, we must also be mindful of the realities on the ground. Gambling - be it 4D, soccer betting or mahjong games - has been part and parcel of life in Singapore for many years. Hence, the argument that the casino will radically erode moral values is quite debatable. People who currently do not engage in gambling activities, due to firmly held moral or

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religious convictions, will not suddenly decide to gamble even if there is a casino. On the other hand, those who enjoy gambling are already doing so in Singapore and offshore. They will continue to do so, whether or not we have a casino.

As for the Malay/Muslim community, we know that we have the choice both as a community and as individuals not to engage in gambling. We will continue with our efforts to educate and inculcate in our community sound spiritual and moral values through the various Malay/Muslim community organisations. MUIS has, for instance, been enhancing its religious education programmes to guide our children and youth to live as good Muslims and integral members of society. It will continue to address various social challenges through its Friday sermons or khutbahs . At the same time, Muslims as individuals have a choice and a duty to shun all activities we consider as vices, including gambling. We can and should live according to sound principles and values, derived from our religion as our spiritual and moral ballast amidst changes around us.

While the casino debate is important, we should keep the big picture in view. The casino targets tourists and those who can afford it. MCYS' survey shows that, in comparison to the other communities, the vast majority of Malays are not involved in gambling. The community's priorities lie in addressing issues such as education and employment, and social issues such as youth development and drug addiction. Just as many Malay/Muslim organisations have raised strong concerns against the casino, I hope we can be equally passionate about lending support towards our on-going efforts to deal with critical challenges such as divorce and youth disengagement. These pose a much more tangible and greater danger to our community.

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In recent weeks, Senior Minister Goh Chok Tong has welcomed the voices of concern raised against the casino project, saying that this shows that Singapore has citizens with values that will provide the moral ballast to the country. Deputy Prime Minister Tony Tan has expressed confidence that the Muslim community's religious values and practices are an asset to the nation. And we have heard earlier our own Prime Minister stating the positive role that religious groups have in Singapore. These are signals to the Muslim community that we have a role to play in shaping the moral and cultural landscape of our country, and that the role is respected. In the coming months, there will be many opportunities for Singaporeans to contribute to the efforts to minimise the social costs of the proposed casino. The Malay/Muslim community will do its part. Our values have a place as Singapore moves ahead. But we must distinguish between personal and public morality. What we believe is good and right for the society, we should share with others in a gracious and respectful way through dialogue and education, without imposing on others.

It was not easy for the Government to come to its decision on the casino issue. And in arriving at this decision to proceed with the integrated resort, our Government has been mindful of the potential social effects the casino can have on Singaporeans and our families. Deliberations have been long and thorough. The Government is putting in social safeguards primarily because it has a duty to protect the vulnerable in our society. The Government does not intend to promote gambling, and is in fact fully aware of the possible social costs of having a casino. It is not about to sacrifice 40 years of achievements in nation-building. But we recognise that there are changes in the social and economic landscape that require a difficult decision to be made now. There are new economic imperatives which have

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compelled us to revisit our assumptions. The integrated resort with a gaming facility will create new opportunities for Singapore, along with a new set of challenges that need to be addressed squarely.

The Muslim community cannot agree to gambling, but it will also not stand in the way of the Government's decision. The integrated resort involves creative, worthwhile offerings for the whole family, and the casino is just one small part. We will not reject the integrated resort, just because of the presence of the casino. The community will have to take responsibility and ownership of this new challenge, and ensure that members of the community are educated on the social ills associated with gambling. With our collective efforts, we can be confident that we can maintain our values and our way of life as a community. We can be confident of the ability of Muslims to make the right choices and be good Muslims at all times, in any environment. More than that, we can be confident that the community will continue to be a positive influence on, and a contributor to, the wider society. The presence of a casino will not change this. Our resilience as a community has seen us through many challenges over the past decades. I

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am confident it will see us through this challenge as well.

Sir, there is a Malay proverb that says " Usul menunjukkan asal ". What this means is that the Muslim community's response on this issue will go to show our own unique identity as a community in a wider Singaporean family.