Singapore targets online gambling, mulls regulation

Published in: Latest Intelligence

When Singapore Second Minister for Home Affairs S. Iswaran recently announced that the government is studying measures to regulate online gambling, it marked the first real possibility of bringing legal clarity to a booming, but still grey area of activity.
 

The U.K.-based Global Betting and Gaming Consultants estimates that internet gambling in Singapore will grow from US$342 million in 2012 to US$519 million by 2017. Despite the strong growth, current gambling laws in the country make no specific mention of the online sphere.

With concern mounting that online gambling may create social problems in the city-state, legislation looks set to become a priority for the government.  Nothing is imminent though, as the government is conducting a study on the issue, which is expected by year-end.

The current legal ambiguity hasn’t stopped the proliferation of online gambling sites, which accept deposits from Singapore-based players and have a wide range of offerings from sports betting to online casinos.

These sites tend to fall into two categories; those that are licensed and regulated in other countries, and those with no licensing whatsoever.

The nation’s two legal and government-operated betting outlets, Singapore Pools and The Singapore Turf Club, both accept phone betting but do not offer online wagering.

This means all forms of internet gambling are currently unregulated. This unique situation has some lawyers perplexed.

“It does seem odd that Singapore Pools is not allowed by the government to extend its legalised offerings on the internet, when nothing is done to prevent public access to online bookmakers, lottery operators and casinos who are not licensed,” said Mr Lau Kok Keng of law firm Rajah & Tann.

An internet search brings up several of these unlicensed online gambling sites, geared towards serving Singapore players, with some accepting deposits and bets through local bank account transfers.

One such site, which claims to have been in operation for many years, said the lack of any enforcement and the maintenance of a low-profile operation meant it was comfortable taking bets from Singapore-based customers, even though the operation was not, strictly, legal.

Due to the complexity of regulating internet-based activities, Singapore would probably need to take ideas from other countries in shaping legislation, lawyers said.

“Singapore is more a follower than innovator in this area of online gaming regulations,” said Yap Wai Ming, partner at Stamford Law Corporation.

Mr Yap said the ideal model for Singapore may be the one adopted in Australia, where laws specifically prohibit operators from offering and advertising online gaming services to residents, but do not penalize those who gamble online.

He said the U.S. model, shaped by the UIGEA (Unlawful Internet Gambling Enforcement Act), is unlikely to be workable in Singapore, “I don’t think the UIGEA is a model we will adopt as we don’t have the resources of the USA to undertake such a complex task.”

Mr Lau also acknowledged the difficulty in finding a balanced and workable model. “For laws to be effective, they must be capable of enforcement, while striking the right balance between upholding public policy in protection of the vulnerable in society and respecting individual freedom of choice in leisure activities.” he said.

He added current laws should also clarify the status of online gambling with regard to intermediaries, such as ISPs, banks and payment-service providers.

Dr. Munidasa Winslow, a psychiatrist who has counseled problem gamblers, said the government may adopt a selective approach, only allowing operators who are willing to monitor and follow whatever protocols may be put in place.

Dr. Winslow was concerned about the impact of online gaming on the youth demographic, which is twice as susceptible to addiction due to high levels of internet awareness.

Despite the concerns, an outright ban on online gambling is seen as being an impossible task.

“Given the propensity to gamble in Asia generally, I have come to the conclusion that prohibition does not work,” said Warwick Bartlett, Chief Executive of Global Betting and Gaming Consultants.

However, he added regulation is a good thing for the country, as legislation should protect the gambler, as well as the young and the vulnerable.

Mr Gregory Fermont, Bodog Asia General Manager, whose company is licensed and regulated in the Philippines, said well-drafted regulation may attract more investment to Singapore.

“Regulation is always a good thing as long as the government concerned has the right motivation for doing it,” he said.

“If they want to embrace the market in the way the U.K. has to create a thriving industry that will bring companies and jobs to Singapore then we, and many others, would certainly be interested in exploring the market further.”