Thursday, April 07, 2005

Speech presented in 5 March Casino Forum

A very good afternoon to James, my fellow comrades and citizens who have gathered here today for this casino forum.

I am tasked to present the reasons and rationale behind the anti-casino movement. Before I go on, I would like to comment on the online petition initiative by FACTS. Their slogan screams through the net, “Do you want your children to grow up learning that it is OK to gamble?” I have my personal slogan, “If you don’t want your children to be a gambler, why would you support the casino that makes others’ children to become gamblers?” Many proponents of casino will cry foul at such slogans and term them as “Moralist garbage”. Nevertheless, this “Moralist garbage” does appeal to many Singaporeans. At least twenty-seven thousand Singaporeans have signed against Casino in Singapore via FACTS web site so far. Their social activism is really commendable.

Many people thought that putting up a case against casino is a very simple task. It is definitely not so. We have to tackle the issue from a multi-dimensional platform. Throwing slogans around is just not enough. As members of a socially responsible political party, we have to be answerable to everyone, including those who are unemployed and hopeful about the prospects that a casino in Singapore would bring to them.

There are two main objectives in wanting to build a casino.

1) To earn Tourist money with little Social Cost. The most successful casinos are those who attract more foreign patrons as compared to locals. 80% of the patrons to casinos in Nevada are foreigners or from other states. Only 20% are locals. Similar composition applies to casinos in Macau.
2) To curb outflow of local gambling money. It is said that Singaporeans have gambled away US$900million in casinos worldwide. It is thus the primary reason why we want our own casino to capture part of this gambling money.

I would like to present the three main perspectives (apart from the moralist stand) that we think that are appropriate to address the casino issue.

1) Social Cost & Economic Benefits Analysis (The one in Yellow boxes)
2) Economic Viability & Problems (The one in Blue Boxes)
3) Dynamic Analysis (The one in Red Boxes)

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The most common argument arises from the first perspective: Social Cost & Economic Benefits Analysis. It is not an easy analysis to start with. Our well paid ministers and civil servants have chose to sidetrack away from this analysis simply because social costs and economic benefits are difficult to estimate. How do we actually quantify the cost to society when someone takes his own life due to debts derived from casino gambling?

We should not take our citizens as mere digits. They are our brothers and sisters sharing this same piece of land with us. But it is inevitable for us to use statistical findings to counter those proponents of casino as they only understand “facts and figures”, nothing else. I will refrain from presenting all those mind-boggling statistics but concentrate on the findings and conclusions.

The fundamental root of Social Cost is addiction to gambling. Professor Gary Loveman, CEO of Harrah’s Entertainment, one of the key players in the US gaming industry, said that, “If 100 Singaporean residents walk into a casino, they are not equally likely to become addicts. In fact, virtually none of them will ever become addicted, because psychiatrically, they’re just not predisposed to addictions.” (This is reported in Business Times 8th Jan 2005.) I beg to differ. I would like to demonstrate how addiction arises out of gambling. People gamble because of greed, no matter how little there is. When one gamble, you either win or lose. When you win, you would think that lady luck is with you and you will want to win more. More greed, more gamble. If you lose, you are annoyed and think that you could win back what you lose. So, you continue to gamble. When the frequency of engagement on the gaming table increases, the attachment on winning more or winning back increases. Thus, no matter you win or lose, you will develop intense attachment to gambling. It is true that there are people who are more resistant to addiction but most people would fall into gambling addiction with intensified enticing through the gambling process.

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This addiction is one of the biggest sources of income for casinos. According to the “National Gambling Impact Study Commission Report” commissioned by the US government, more than 30% of casino revenues are generated from problem and pathological gamblers.

Gary Loveman also said that there is only about 1 to 2 per cent of the casino customers will become psychologically addicted to gambling. This is inaccurate as in the NGISC report, it is reported that there is about 1 to 2 percent of TOTAL ADULT POPULATION in US that are considered to be pathological gamblers. Pathological gamblers are individuals with very serious mental disorder in terms of psychological addictions. There is another category of problem gamblers whom may not suffer grave mental disorder but yet are potential source of social problem and cost. If we take this group into account, the potential size of problem and pathological gamblers is about 5% to 9% of TOTAL ADULT POPULATION. More importantly, NGISC felt that they might have underestimated the real situation when it is expected for respondents to hide their gambling problems.

There are more interesting findings from NGISC:

1) If there is a gambling facilities or casino within 50 miles of the community, the incidence of problem and pathological gamblers are doubled.

2) Seven of the nine communities investigated stated that the number of problem and pathological gamblers increased after the introduction of nearby casino gambling.

3) Male, young people and those with lower educational level are more prone to become problem or pathological gamblers.

The problem of gambling addiction manifests itself by affecting those surrounding the problem or pathological gamblers. The multiplier effect is believed to be 4 or 5. This means that more than 20% to 30% of the population would be affected.

There are studies that tried to quantify the social-economic cost into dollars and cents but most of them are deemed as understating the cost. There is one study done in 1998 which come to a conclusion that on average, the social cost is about S$20,000 per compulsive gamblers per annum. This is a very conservative estimate but when applied to Singapore, it may cost as much as S$0.7 billion to S$1 billion of social cost per annum. At this moment, I must say it is really inhuman to quantify human sufferings into dollars and cents but we have to do it for argument sake.

The PAP government has never refute the fact that casino may impose great significant social cost. It has instead tried to divert public focus to our own maturity. When that failed, they have chosen the path of moderation by coming up with a list of safeguards. It would be very unattractive to casino operator if we ban Singaporeans from Casino. There are casinos in Korea that banned local Koreans but they barely survive. Thus, to the government, the next second best solution is to impose safeguards.

Imposing safeguards may compromise our second objective of curbing the outflow of gambling money. Furthermore, the safeguards may not be effective at all. If one has to pay to get into the casino, it is natural for one to “optimize” his stay in the casino! That may result in more gambling and create more problem or pathological gamblers in the end. How to execute these safeguards in practice would be a challenge to both the authority as well as the casino operator. The safeguards are unlikely to be sustainable. Would the government promise not to relax the safeguards even when the whole casino-integrated resort start to lose money? Most likely, with government vested interests in the whole project via GLCs, it would be forced to relax such safeguards ultimately.

One school of thought argues that the casino-integrated resort will not be beneficial to us simply because it would cannibalize on our local economy and create problems. Monies that might have been spent on other stuffs would have end up in the casino. Tourists would have spent less on local retail outlets. Singaporeans have already spent one of the highest per capital amount on convenient gambling. The casino will aggravate the situation further.

If the casino-integrated resort provides free or subsidized hotel accommodations to its patrons, existing hotels and hospitality sector ‘s business would definitely be affected.

There are research done in US that put doubts on the economic contributions claimed to come from casino. It is not difficult for us to believe that the initial investment would make contributions to our economic growth. However, in the long run, this may not be the case when the casino-resort cannibalized on other sectors and cause loss of productivity by creating problem or pathological gamblers. Work ethics may be adversely affected.

More importantly, casino will create some economic-financial problems to the economy. Money laundering will increase and the casino would become a great place for briberies to be channeled effectively. Loan sharks business will definitely enjoy a boom while bankruptcies will increase. These are the potential negative externalities of having a casino here.

The viability of the Casino-integrated resort will depend heavily on the projected regional economic development as well as how our neighboring countries react to our set up. There is basically no entry barrier for any countries to build similar Casino-integrated resorts. We will lose our niche if our neighbors so decide to build their own versions of Casino-integrated resorts in one of their renowned tourist spots. And if that happens, we will face a big problem as demonstrated in our dynamic analysis.

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Our neighbors will be attracted by the very same reasons as we did, to go into casino business as they will not stand there and do nothing to stop all the gambling money coming to us. As we know, the Casino integrated resort is a high stake and high-risk project. The non-gambling attractions may not be economically viable without the cross-subsidies from the casino. We may end up losing money when our neighbors decide to compete with us. They have the inherent endowed advantages with many tourist spots available in their land. We may be forced to do away with all the safeguards so to make up for the lost revenues and thus the social cost burden on the society will increase tremendously. If not, our billion-dollar investment in this Casino-integrated resort will end up bleeding us to death. As shown in the slide, the Nash equilibrium will mean that we all end up as suckers. It is the casino operators who will gain all. This region is considered as a new territory for the gaming industry. Are we stupid enough to allow ourselves to be used by the gaming industry as the thin edge of the wedge to open up this region as their new market? I hope not.

I have just provided a summary of most of the points that has been brought up by the anti-casino camp. My conclusion for the above points is very simple.

If anyone talks about Freedom of choice, about how matured citizens on this land would deal with a casino, he has missed the point totally. Nobody is curbing anybody's rights to gamble in a casino. You could just take a boat trip to Batam or just get a ticket onto the cruise to nowhere. This is never an issue at all.

The argument against casino made here is not from a moral point of view. The moral perspective is merely a small part of the whole argument. The biggest issue is that after we have invested billions of dollars into this venture and eventually find out that our neighbours will outdo us, we will have no choice but to open up the casino for Singaporeans in order to get your investment sustainable in the long run! That's the problem. When that happens, casino will become the parasite industry of Singapore.

It is simply not possible for us to be "MORE ATTRACTIVE" to tourists with a casino in Singapore. People would rather go to HK's Disneyland then take a short boat trip to Macau. Even Bali in Indonesia would be a much better place to build casinos! There are just too many tourist attractions in Indonesia and Malaysia where they could build casinos to make them more attractive! We will lose out in the end and we will become suckers eventually. We will be stuck with a multi-billion dollar Casino-Trojan horse that would require us to sell our soul in order to save us from bleeding big. More families would be affected adversely, more people young and old would suffer in silence or agony.

Gambling will erode the moral fabric of our nation. Our people must be taught that wealth is accumulated through hard work, not via lady luck. If PAP government think that they could do a quick fix to their dismay economic performance in creating jobs by building this Casino-integrated resort, they would be making the biggest honest mistake ever. They are just simply putting the whole nation’s welfare as a stake on the gambling table.

Goh Meng Seng


Anonymous said...

You don't like gambling, so cannot built casino for your or my children.
If I don't like Worker's Party, can I request you dismantle the Worker's Party for the sake of my children because I don't want WP to influence my children with bad things?

Anonymous said...

Goh Meng Seng made a very good point about the casino matter. well said! i am against having a casino in singapore. it doesnt matter whether you are from the opposition party or not, i just dont want to have casinos in our country! it is like asking the devil to move into our neighbourhood. i rather that singapore be boring than be sorry in the end.

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Anonymous said...

good work .i am against having a Casino In Singapore.strong points u've got there .

Anonymous said...

Look at Las vegas and macau, what has the society become? Gambling is no good and how many people can resist after the 1st win. Temptation is great unless you are able to control yourself and how many people can tell itself to stop when lady luck is with you. I compare drinking coffee, some people need to drink coffee in order to keep awake. This is a mild example of addiction. Addiction is a habitual exercise which a person is unable to change overnight to overcome it. Therefore, this applies to gambling.My advise is don't touch it. But the opening of the casino is for revenue earning as singapore has the only resource is the geographical location. Think, Think, Think for younger generation. I hope WP can think and act for a better proposal to replace the IR. Create jobs and learning environment for the young

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