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     FrontPage Edition: Wed 20 April 2005

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Singapore to have two IRs with a casino each

Source: www.gov.sg

Excerpted from

Ministerial Statement by Prime Minister Lee Hsien Loong 18 Apr 2005

PROPOSAL TO DEVELOP INTEGRATED RESORTS

"...Today, I will explain how the Cabinet reached this decision, and the key considerations that caused us to change our longstanding policy not to allow casinos in Singapore.
"I also want to acknowledge the concerns of those who oppose or have expressed reservations about an 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.....
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.
"In 1985, when Singapore experienced a severe recession, the idea to open a casino on Sentosa came up, not for the first time. Mr Goh Chok Tong, who was then the First Deputy Prime Minister, turned down the proposal.
"In 2002, I chaired the Economic Review Committee (ERC) looking for new strategies to grow our economy. Mr Wee Ee-chao 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.'
Changing Circumstances
"But the issue did not go away. MTI which is responsible for the economy was getting worried as the competition environment changed. 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 (from 8% in the Asia Pacific region in 1998 to 6% in 2002).
"Tourists are spending less time in Singapore. They used to stay an average of about 4 days in 1991, but now they stay only for 3 days. In contrast, on average, they are staying for about 4 days in Hong Kong, 5 days in London and almost a week in New York City. We are losing attractiveness as a tourist destination.....
Cities Re-inventing Themselves
"The second major development is that cities all round the world are reinventing themselves.....
"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 aplenty, but realising them is not so easy. As Mr Philip Ng said in a forum organised by 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 in Asia, instead of being a cosmopolitan hub of the region, then many good jobs will be lost, and all Singaporeans will suffer. 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 IR is one significant idea we must consider, that will help us reinvent Singapore.
Not A Casino But An IR
"This leads to my third point, which is that we are not considering a casino, but an IR – an integrated resort.
"Some of media coverage of this debate has focussed on whether or not the government will approve “casinos”. This 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, perhaps 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 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. They may be tourists, executives or businessmen, who go to enjoy the resort, or 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 make the entire project financially viable. As a result, there is no need for government grants or subsidies for the IR. The investors will put in the money, and take the commercial risk.....
Results of Request For Concepts (RFC)
"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 – i.e. people who are coming for Meetings, Incentive tours, Conventions and Exhibitions. This is a high value market, because MICE visitors spend much more per person than other tourists.
"The Bayfront site (12.2 ha) is larger than Suntec City (11.7ha). Investors are prepared to put in 2 to 4 billion dollars to develop the entire area, filling it with hotels, shopping malls, convention and exhibition space, even museums and theatres.....
Assessment
"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 spin-offs 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.....
Evaluating The Downsides
Social Implications
"We must 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.
"Every year, Singaporeans spend $6 billion on legal gambling in Singapore, and another $1.5 billion in cruises and offshore casinos. 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 IRs is unlikely to exceed $1 billion a year, or 15% of the current level. 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 will probably be less.....
"We seriously considered banning Singaporeans altogether from gambling in the IRs, but decided against it. This is because 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 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 decided to use price, and charge a high entrance fee, $100 per day or $2,000 a year. $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.....
Brand Name
"The second risk of allowing IRs is that we may tarnish the Singapore brand 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.....
"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.....
Values
"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 4 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, we have to 'open the windows, breathe in the fresh air, and at the same time fight the flies and insects.'.....
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 stands. 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 Singaporeans to make. Each person is free to follow his conscience, and follow 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. But the Government has to balance the economic pluses against the social fallout and the intangible impact on values, and make an overall judgment whether to proceed. For the Government, the key consideration is what serves our national interest in the long term.....
The Decision
"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. They are quite mistaken.
"In fact the Cabinet started off mostly against the IRs. 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 RFC, we knew that we had to take the bids very seriously, and that if we said no there would be serious consequences.....
"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 the decision....."

Full Text of Speech

Source: Singapore Government Press Release 18 Apr 2005

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