Singapore: Going for Broke: Not One Casino, but Two Integrated Resorts

2005

Dr Terence Lee

18 April 2005 should be marked as an historical milestone on Singapore's social, economic and political calendar. It was the day that Prime Minister Lee Hsien Loong announced his government's long-awaited decision on whether it would proceed to build Singapore's first casino.

The event, as it turned out, was well calibrated and designed to extract maximum media coverage and political mileage. The Prime Minister announced in Parliament that his Cabinet had decided to proceed with the construction of not one casino, but two mega-size 'Integrated Resorts' that would come with casino cum gaming components occupying no more than 3 to 5 per cent of the total floor area. This maximum allowable space was couched as a 'safeguard' to ensure that the resorts will be seen as family-friendly entertainment venues, and not gambling dens that could be associated with organised crime and other vices.

Other measures that will be introduced to protect Singaporeans against the ills of casino gambling include a high entrance fee of S$100 per day or S$2,000 a year and a ban on credit. In addition, those in financial distress, or receiving social assistance, will be kept out. Singaporeans will also be allowed to exclude themselves or their family members.

With a bold affirmation that he would carry the ultimate responsibility for the decision, Prime Minister Lee - who had only been in the premier's seat for a little more than eight months at the time of the announcement - displayed a potent mix of candour and political expedience. Further shoring-up available rationales for his decision, Lee argued that the two Integrated Resorts would entice foreign tourists to extend their stay in Singapore, and thus increase tourism takings. It would also, as he puts it, tip 'investor mindset toward accepting that Singapore is transforming into a diversified service-based economy'.

As it was always about boosting a lack-lustre economy, many Singaporeans believed - and continue to believe - that the decision was made as soon as it was flagged for public and parliamentary debate. The extensive public feedback and the deeply polarised debates that ensued were therefore (as I had pointed out in the January 2005 issue of Asian Analysis) an act of gestural politics, where rhetoric is more important than its substance. Nevertheless, as some commentators have expected, Singaporeans were commended for participating in the debate in a rational and constructive fashion.

The term 'Integrated Resort' was used sparingly by the Singapore media prior to the decision, but in the aftermath of PM Lee's announcement, the government - and the media - had almost completely jettisoned the less favourable and baggage-laden 'casino'. This 'Integrated Resort' nomenclature brought a new 'spin' to the issue. The ills of gambling and its impact on a highly regulated society that was hitherto insulated from a host of contrary vices were backgrounded. In its place, Singaporeans were urged to see the 'bigger picture' that included various possibilities. These include inter alia foreign investments of S$5 billion for the 2 resorts combined, glitzy proposals submitted by global players in the casino-cum-resort business, new iconic structures that would reshape Singapore's urban cityscape and create a new buzz as well as a well-publicised promise that 35,000 new jobs would be created (although the number of these jobs going to Singaporeans remain uncertain).

In the final analysis, the decision was made primarily on 'gut feel'. As PM Lee himself admitted: 'This is a judgement, not a mathematical calculation. We see the trends and feel the need to move'. This statement is undoubtedly noteworthy for a society premised on the ideology of pragmatism. Indeed, all semblances were discarded when the government decided to 'go for broke' with two mega-resorts that would make news headlines around the business world.

The key message that the government was - and still is - trying to convey to the rest of the world is that a new and vibrant Singapore is in the making. The reality, though, is that Singapore is facing unprecedented levels of economic competition in the region, and may be edged out in the medium to long term if it does not 'move'.

Going forward, the risks involved in building the Integrated Resorts will be well worth taking only if the message of a 'new' Singapore gets across to the intended audiences without too much distortion or interference. Not only are the resorts expected to live up to the hype, it would be prudent for the government to continue to engage Singaporeans through the development process to ensure that the social costs are well and truly managed. The political costs may be too high otherwise.

WATCHPOINT: In the short term, it will be interesting to observe the extent to which Singaporeans will be informed and consulted through the development process of the Integrated Resorts. In the medium to long term, will the government adhere to the various 'rules' to limit the social impact of gambling, or will further justifications be made to relax them for the benefit of the economy?

 

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