Singapore's squeaky clean government on Monday okayed the country's first casinos, making the city-state the latest Asian nation to succumb to the legalized gambling bug.
Singapore's plans for two casino-cum-resorts, which should open some time in 2009, sparked a rare outcry and heated debate in a country where the government is accustomed to no opposition to its sage, far-sighted policies.
The main question raised by the casino opponents was whether it is morally right for the state to encourage and benefit from one of the deadly sins -- gambling. Singapore's government opted for a pragmatic response.
ILLUSTRATION: MOUNTAIN PEOPLE
"Will we have trouble with a casino? Yes. The bigger question is, will we have no trouble if we don't have casinos?" said senior statesman and founding prime minister Lee Kuan Yew (
Lee, of course, has a point.
Legalized gambling is spreading fast in Asia, and those nations that go against the flow will see their habitual gamblers take their cash elsewhere, out of reach for their own tax collectors.
Currently there are casinos legally operating in Australia, Macau, Malaysia, the Philippines, Cambodia, Myanmar and even tiny Laos.
These countries are not just catering to their own gamblers but are earning revenues off tourists -- habitual gamblers from other countries.
Macau provides a good example of a gambling haven in Asia that has benefited hugely from legalized casinos.
Gambling was first legalized in Macau in 1847, largely because the enclave's then Portuguese-run government realized it was losing out to Hong Kong in its traditional money spinners -- trade and shipping.
Last year Macau's 16 casinos notched up 42.3 Macau patacas (US$5.3 billion) in revenues, just a whisker less than Las Vegas's gaming revenues. And 35 percent of those revenues went to the government in taxes.
Gaming, including casinos, horse and dog racing and lotteries, accounted for almost 36 percent of Macau's GDP last year.
Macau has pushed through legislation in recent years that has increasingly regulated the gaming business, raising standards to approximate Nevada and New Jersey Gaming Commission regulations, a process that has arguably been sped up by the entry of the Las Vegas Sands group in the enclave.
Sands opened its first Macau casino in May last year and plans another US$1.8 billion casino-hotel complex by 2007.
But more needs to be done on the regulatory side. For instance, Macau has yet to pass an anti-money laundering law, and there is little doubt that big players, including powerful entities from China, are using the territory to wash their dirty cash.
There also are questions about triad participation in the casinos' VIP rooms, where the high rollers play. The VIP rooms account for 50 to 70 percent of Macau's casino revenues.
The VIP rooms are filled by "junkets," or tour groups of high rollers brought in from China and Southeast Asia, who promise to spend hefty amounts gambling.
"The junkets are completely controlled by the triads," said one risk analyst familiar with Macau's casinos. "They bring them in and they collect the credit."
That's something for the Sands to ponder. The US-based casino group had a soft opening of their own VIP rooms in Macau two months ago.
The historical connection between casinos, legal or illegal, and organized crime, has been well documented, and Singapore's bureaucrats will need to make sure it is missing from their own gambling plans.
"Singapore is doing a pretty good job so far," said independent consultant Ronald Tan, with more than 30 years in the gaming and hospital industry. "The government will take the right steps" to prevent problems such as money-laundering or an underworld element that occurs elsewhere, he predicted.
The Philippines, which has allowed legal casinos for decades, provides another regional example.
The Philippine Amusement and Gaming Corp (PAGCOR), which operates legalized gambling in the Philippines, hands over to the government at least 100 billion pesos (US$1.8 billion) in revenue annually, the agency said.
Revenues generated by PAGCOR fund poverty-alleviation projects such as building classrooms, production of textbooks for public schools, providing livelihood projects and building low-cost housing.
There is little concern in the Philippines about casinos being used for money laundering or for causing an upsurge in organized crime, partly because crime syndicates already control the more widespread illegal gambling operations.
But legislators, who want all gambling legalized, are coming up against opposition from the Catholic church.
"More and more Filipinos have sunk deeper into poverty because of gambling," said Archbishop Oscar Cruz. "Gambling is a scam. It gives false hopes. Only gambling operators get rich precisely because they don't gamble."
That's true enough, but maybe legalized gambling makes a good case for "buyer beware."
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