Getting to the Starting Line - Singapore’s Journey & Beyond 24 November 2011

Getting to the Starting Line -Getting to the Starting Line -Singapore’s Journey & BeyondSingapore’s Journey & Beyond

24 November 2011 24 November 2011

Scope of Sharing

1) Introduction to Casino Regulatory Authority (CRA)

2) Singapore’s Integrated Resorts – Why?

3) CRA’s Journey

4) Singapore Casinos’ Opening & Learning Points for CRA

5) Q&A

(I) INTRODUCTION TO CASINO REGULATORY AUTHORITY (CRA)

Casino Regulatory Authority

CRA - Statutory Board under Ministry of Home Affairs

• Governed by statutes • Allows funding by the industry (casino licence fees)• Provides flexibility

• in dealing with industry operators, reacting to ground situations

• in exercising operating and administrative authority as an independent body

Ensure that the management &

operation of the casinos remain free from

criminal influence or exploitation;

Ensure that gaming in the casinos is

conducted honestly

Contain & control the potential of the casinos to cause harm to minors, vulnerable persons

& society at large.

1 2

3

CRA’s Mission

e.g. Strict penalties against cheating, Prevention of Money Laundering

controls

Patrons & others

Junket promoters(Licensing)

Other vendors/suppliers(Approval of contracts)

Electronic gaming machinemanufacturers/suppliers

(Approval)

Testing labs(Recognition)

Business dealings with casinos

Operators(Licensing)

Main shareholders (Approval)

Special employees (Licensing) Casino

Scope of Regulation

To prevent criminal infiltration and ensure honest gaming

• Limiting entry access• Entry levy• Exclusion orders (CP EO,

NCPG EO, CRA EO)• No minors (<21 years

old)

• Forfeiture of winnings

• Credit restrictions

• Advertising restrictions

• No ATMs in casinos

• Voluntary loss limit system

• Responsible gambling measures

Scope of Regulation

Social Safeguards: to contain and control the potential of a casino to cause harm to minors, vulnerable persons & society at large

• Chairman Mr. Richard Magnus and 15 members

• Advises and provides strategic guidance to the management of CRA to meet its objectives

• Board meets quarterly• Policy and operational issues scrutinised• Strategic directions established• Decisions on major issues tabled to Board for approval• Establish sound corporate governance

CRA Board

Organisation Structure

(II) Singapore’s Integrated Resorts – Why?

History of Gaming (Singapore)Time Period• 1830s and rest of 19th

century: Widespread gaming in Singapore

• 1929 : Restricted legal outlet at Singapore Turf Club

• 1950s and 1960s: Rampant Illegal Gaming and Substantive Changes to Gaming Laws

• 1968: Legalisation of Lotteries and Establishment of Singapore Pools

• Gaming in the 21st Century: By and large prohibited, except where exemptions or permits were sought– Betting Act, Betting and Sweepstake Duties Act,

Common Gaming Houses Act,– Lottery (4-digit, Toto, Singapore Sweep, football

betting) allowed • considered “leisure activities”

• 2010: Opening of the two Integrated Resorts (IRs) with casinos: − Legalise gambling (Approved games) in casinos

History of Gaming (Singapore)

Prior reasons for proposal of casinos (Timeline)

Proposals for Casinos – Early Stages

Time Impetus

1985 • Severe recession in Singapore

2002 • Look for new strategies to grow our economy

2004 • Competition in Economy, similar to 2002

• Ministry of Trade and Industry (MTI) proposed for Integrated Resort (with IR)

• Changing Circumstances • Losing ground in tourism. • No tourism infrastructure

projects that are crowd pullers.

• Cities around the world are reinventing themselves • New York, Paris, Shanghai,

Hong Kong, etc• Japan, S Korea, India,

Thailand Taiwan, Philippines – may legalise / liberalise casino gaming

Why Integrated Resorts for Singapore

• Boost Singapore’s attractiveness as a tourist destination

• Significant Economic Benefits for Singapore• Investments• Economic Spin Offs• Tourism receipts• Jobs

Why Integrated Resorts for Singapore

Why Integrated Resorts for Singapore

The IRs will have all kinds of amenities – hotels, restaurants, shopping, convention space, even theatres, museums and theme parks. They attract hundreds of thousands of visitors per year. The great majority will not be there to gamble. But within this large development and slew of activities, there is one small but essential part which offers gaming and which helps make the entire project financially viable. As a result, there is no need for government grants or subsidies.

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... There will be spin-offs to the rest of the economy.

--- Prime Minister Lee Hsien LoongApril 2005

Significant Economic Benefits of the IR

20,000

US$10b

10,000 direct jobs per IR (when 100% open)

Investment by both IRs

Two-stage Process• Request for Concept (or RFC)

• process whereby interested bidders presented concept proposals for the Integrated Resorts

• Not binding offers• 80+ concepts presented – YES!

• Request for Proposals (or RFP)• Tender document containing rules, guidelines,

conditions etc, under which Integrated Resorts and casinos will be built

Assessment

• Spelled out desired outcomes of IR• Iconic development, unique and differentiated• Compelling mix of attractions, entertainment, MICE

facilities, hotel, retail, F&B• Bring in strong affiliates with strong credentials

• Branding, programming, design, content, etc. • Enhance Singapore’s image/reputation as dynamic

tourist destination• Attract foreign visitors to casino; keep resident

participation small proportion• Locked in key provisions; later in Casino Control Act

RFP

RFP - Key Provisions for Casino Gaming• Casino concession – 30 years• Remain suitable throughout concession period• Casino tax

• 15% GGR• 5% GGR for premium players

• Issuance of casino licence• 50% Development Investment has been paid• 50% of proposed gross floor area completed

RFP

RFP - Key Provisions for Casino Gaming• Allowed for 2 casino licences• Review of casino licence every 3 years• Non-transferable casino licence• Maximum gaming area – 15,000 sqm• Casino regulations and licence fees• Security, law and order requirements• Social safeguards

RFP

Marina Bay Sands(MBS)

Resorts World at Sentosa (RWS)

Marina Bay Sands (MBS)

Two Integrated Resorts Established• Two Integrated Resorts with casinos allowed

• Tourist-directed

• Integrated Resort Concept

• Casinos - but one of many amenities

Sweden Singapore

4 casinos 2 casinos

Lotteries and horse racing are regulated by the Lotteries Act of 1994 and the Casino Act of 1999.

Lotteries - Toto, Singapore Sweep regulated under the Betting and Sweepstake Act, Common Gaming House Act and Private Lotteries Act

Population: about 9.4 million(off Wikipedia)

Population: 5.18 million

Largest of the four casinos in Sweden – Casino Cosmopol Stockholm - offers 37,674 square feet of gaming space (i.e. 3,500 square metres)

Both of Singapore’s casinos are allowed a maximum of 15,000 square metres of gaming space

Some Brief Comparisons…

• Videos of opening of RWS and MBS

(III) CRA’s Journey to Casino Opening

Timeline Event

2004 • MTI’s proposal for Integrated Resorts

2006 • Casino Control Act passed in Parliament (Feb 06)

• Marina Bay IR awarded to Las Vegas on 26 May 2006

• Sentosa IR awarded to Genting International and Star Cruises on 8 Dec 2006

2008 • CRA established (2 Apr 08)• Casino Control Act came into effect (Jul

08)

2010 • RWS casino opens (14 Feb 2010)• MBS casino opens (27 Apr 2010)

Key milestones leading towards opening

• Casino Control Act has five main areas• Constitution of the CRA• Licensing Regimes• Casino Operations• Casino Tax• Social Safeguards

• From 2008 onwards, promulgated the necessary subsidiary legislation to support the Casino Control Act• 15 Casino Control Regulations• Over 30 sets of game rules• 7 technical standards• 8 technical notices

Extensive Preparations

• 6 Feb 2010 - awarded casino licence to Resorts World Sentosa

• 26 Apr 2010 - awarded casino licence to Marina Bay Sands

• Lead-up to casino openings -• issued more than 6500 Special Employee Licences• approved more than:

o 2600 Electronic Gaming Machines, o 40 types of Gaming equipment,o 24 Gaming Machine manufacturers & suppliers,o 6 Singapore Recognised Testing Laboratores

Extensive Preparations

1) Learning from International Counterparts• Extensive study visits (US, Australia, Macau, UK)• Requests for information• Training attachments• Training Symposiums• G2E• Participation in overseas regulatory fora

• International Association of Gaming Regulators (IAGR)• Australasian Casino and Gaming Regulators (ACGR)

Extensive Preparations

2) Extensive research by CRA staff

• Active research of multi-jurisdictional practices, especially best practices

• Deep probing – rationale, mistakes made, what could have been done better if you had the chance to do it all over again.

Extensive Preparations

3) Leveraging on Expertise• Hiring specialists, e.g. probity investigations• Cooperation with Regulators and local Law

Enforcement Agencies (LEAs)• Regulator-to-regulator cooperation

• Attachment of two Queensland inspectors to CRA during opening period

• Bi-annual CRA-CID Training Symposiums - invited speakers and participants from reference regulators (law enforcement and regulation units)

4) Active Engagement of Industry and Operators• CRA’s Technology Forum• Regular consultations and operator meetings

Extensive Preparations

(IV) Singapore Casinos’ Opening & Learning Points for CRA

1) CRA as a Statutory Board under Ministry of Home Affairs (MHA)• role to keep crime out of casinos closely tied to enforcement

(thus our affiliation with law and order/ security-related Home Ministry)

• ready pool of officers with relevant expertise from the different divisions and departments under the purview of the Home Ministry

2) CRA’s firm regulatory stance - compliance before commerce• firm but fair• benchmarked against best practices of foreign jurisdictions• casino operator has primary responsibility to comply

Learning Points

3) Close & early engagement with casino operator is crucial • e.g. approval of gaming equipment, licensing of

special employees• prioritisation of operator needs• close coordination of operators’ timelines with CRA’s• setting of regulator expectations

Learning Points

4) Training of CRA inspectors & good internal preparations are key• no major surprises• aggressively sent our officers overseas to learn• CRA developed comprehensive checklist to guide pre-

opening prep • table-top exercise for CRA management• table-top exercise, mock casino, test session for

operator

Learning Points

5) Engagement of specialist expertise/advice complemented CRA’s lack of practical experience

(e.g. Australian ex-regulators, SGG consultants) • available for on-the-spot consulting• walked through opening 7 days with CRA for 1st casino

opening• By 2nd casino opening, CRA was able to see it through on

its own

Learning Points

Learning Points6) Useful to have CRA team on-site to closely monitor

opening period • CRA Mgt were on-site for first 7 days• daily meetings with CE of the casino operators & mgt • point out deficiencies so that they could remedy quickly• respond to & clarify operators’ operational queries• show operators that CRA is on top of situation & closely

monitoring

7) Good coordination between CRA & Police • investigations into offences, crowd management• RWS’ opening on 14 Feb 2010, the first day of CNY, saw

large crowds turning up at the casino.

• CRA reacted swiftly with SPF & worked with RWS to devise a more effective crowd management system.

8) Useful to have technical expertise on-site (e.g. gaming manufacturers, systems engineers)

- allowed for fast response- e.g. during the opening week, the volume of activity was so heavy that there was a shortage of slots and electronics table game terminals to meet patron demand. Many patrons had actually queued to play, which is an uncommon sight during casino openings. - This called for minimum recovery time in terms of resolving technical glitches and having the technical expertise from the manufacturers onsite effectively alleviated the pressure experienced during the opening.

Learning Points

Learning Points

9) Important to internally review what CRA did right, could improve- CRA conducted internal after action review, by Division &

across whole of CRA

10) Important to firmly place onus on casino operator to comply with regulatory requirements – strong message reiterated to operators’ mgt – highlighting observations to keep operators on its toes &

in compliance mode (e.g. dealers forgetting to announce closing of bets)

11) Be firm but fair– CRA exercised flexibility in dealing with technical

breaches, such as software faults, so long as gaming integrity is preserved

– expected teething issues, got operator to remedy (provided not intentional or willful)

Learning Points

Clarifying our regulatory stance• Continuous review and strengthening of the regime

– moving towards a more outcome based approach• Forging strategic partnerships within and outside of

Singapore– deepening of our expertise – keep apace with rapid industry developments

(particularly Asia) • Enhancing its organisational capabilities.

– develop new capabilities, grow existing capabilities• Encourage operators to engage regulators, take ownership

and do their part as responsible operators

Beyond Opening…..

Social safeguards

Tax/Finance Economic/Tourism

Security & Law Enforcement

SPF CNB

Forging Partnerships

Singapore

3) Local partnerships

2) International Networks

Australasia Casino & GamingRegulator

s

1) Referenced Jurisdictions

Australia

United States

New JerseyDivision of Gaming

Enforcement

Nevada Gaming Control Board

Forging Partnerships

• Singapore hosts IAGR 2012 • Date: 21-24 October 2012• Venue: Pan Pacific Hotel• Visit www.iagr.org for more information

IAGR 2012

(V) Q&A