S’pore gambles low crime rate with $10.2 billion casino push

Singapore’s casinos have attracted more than three million visitors, created thousands of jobs and spurred spending at hotels, restaurants and shopping malls. They’re also keeping the courts busy.Shamim Adam & Christian Schmollinger

Singapore’s casinos have attracted more than three million visitors, created thousands of jobs and spurred spending at hotels, restaurants and shopping malls. They’re also keeping the courts busy.

Since the opening of Resorts World Sentosa in February and Marina Bay Sands in April, the island-state has seen cases of fraud, embezzlement and identity theft. Some offenders were fined or sent to prison, three European suspects have jumped bail and two Africans have been charged for cheating the casinos out of about S$140,000 ($102,000).

Named Asia’s most livable city in a Mercer Consulting survey last month, Singapore dropped its 45-year ban on casinos to help double tourism revenue by 2015 and shed what Prime Minister Lee Hsien Loong called an “unexciting” image. One of the world’s safest countries according to the U.S. Overseas Security Advisory Council, Singapore has prepared for a potential increase in loan sharking, pimping and fraud.

“Casinos mean money, money means temptation and temptation means there’s bound to be some sort of crime,” said Song Seng- Wun, an economist at CIMB Research Pte in Singapore. “Is it worth it in terms of its impact and contribution to the Singapore economy? Definitely.”

The $5.5 billion Marina Bay Sands, owned by billionaire Sheldon Adelson’s Las Vegas Sands Corp., hosts its grand opening today after unveiling the casino, some convention facilities, a mall and 963 of 2,560 hotel rooms on April 27. Genting Singapore Plc’s $4.7 billion Resorts World casino on Sentosa island, featuring a Universal Studios Inc. theme park, opened Feb. 14.

‘Undesirable activities’

Singapore’s per-capita crime rate of 684 per 100,000 people in 2008 was about a third that of New York City, Law Minister K. Shanmugam said last year. The “handful” of casino-linked cases so far hasn’t contributed “significantly” to the Singapore Subordinate Courts’ caseload, the court said in an e-mail.

“As the emergence of these cases is a recent phenomenon, the actual impact remains to be seen,” the court said.

Prime Minister Lee rejected a proposal for casinos in 2002 when he was heading a committee to seek growth strategies for Singapore. He said they could lead to “undesirable activities” such as money laundering, illegal lending and organized crime.

Three years later, Lee justified the decision to allow gambling by saying the country had “no choice but to proceed” with the casinos to keep attracting tourists.

Economic boost

The popularity of Macau supports his view. The southern Chinese city surpassed the Las Vegas Strip as the world’s biggest gambling center in 2006. Revenue there may rise 50 percent this year, Karen Tang, an analyst at Deutsche Bank AG, wrote in a June 11 report.

About 3 million to 4 million people have visited Singapore’s casinos so far, according to Jonathan Galaviz, an independent gambling industry strategist. The resorts may add about 0.8 percentage point to Singapore’s gross domestic product this year when fully operational, Song said, helping to reduce a reliance on manufacturing that led to three recessions in a decade. The most recent contraction was the deepest since Singapore’s independence in 1965.

Early visitor numbers at Marina Bay Sands are “more than sustainable,” Adelson said in an interview. About 550,000 people visited the casino in the first 25 days of May with two- thirds either tourists or foreigners living in Singapore.

Tax revenue

The resorts, which the government says employ about 16,000 workers, may generate tax revenue of more than $400 million this year, according to Bloomberg calculations based on estimates provided by Aaron Fischer, CLSA Ltd.’s Hong Kong-based gambling analyst. Fischer estimates the casinos will attract 9.2 million visitors this year and 15.1 million in 2011.

Tourism receipts account for about 5 percent of the economy. The city aims to boost revenue to S$30 billion by 2015 from S$12.8 billion last year, the Singapore Tourism Board said.

Efforts to attract 17 million tourists annually by 2015 from 9.7 million last year may be working. Room and food revenue at the nation’s hotels rose 32 percent to S$223.7 million in April from a year earlier, according to the tourism agency.

“We were never tempted to come to Singapore before, but now there seems to be more things to do and more places to go,” said New Zealand retiree David Brooke after visiting the Marina Bay Sands casino during a three-day visit with his wife, en route to the U.K. “We are thinking of stopping over on our return trip as well.”

Cheating, escorts

Resorts World’s security officers and thousands of cameras watch out for any crime and flouting of casino rules, working “very closely” with authorities, said Robin Goh, a spokesman. A Marina Bay Sands spokeswoman declined to comment.

While Singapore says it’s too early to assess any social impact, local newspapers have detailed punters caught placing bets after a winning number was declared, a Resorts World cashier who stole S$10,000 from the casino and gambled it away, and three Europeans who jumped bail after being charged with cheating at the roulette tables.

The Singapore Police Force is already serving 3,500 so- called exclusion orders prohibiting entry to the casinos to convicted criminals “such as loan shark syndicate members, secret society members, money launderers, pimps and drug traffickers,” Michael Ang, who heads the Casino Crime Investigation Branch, said in an e-mailed response to questions.

Money to spend

Prostitution, which is legal in the country of 5 million, may also increase as casino visitors celebrate or spend their winnings, said Gerrie Lim, author of “Invisible Trade,” a book on Singapore’s high-end escort industry. Public solicitation, pimping or living off the earnings of a prostitute, as well as maintaining a brothel, are illegal in Singapore.

“There will be business travelers, clients, who fly into Singapore and who want to check out the casino, and as part of the entertainment will call to book a few of these girls to come party with them,” Lim said.

William, a 30-year-old former banker and owner of Singapore Model Escorts, expects business to triple.

“People who win money will spend money,” he said, asking that only his first name be used. Escorts earn up to S$1,500 an hour with some bookings lasting as long as 10 hours, he said.

Some of his competitors have geared up for gamblers. Singapore Exquisite Social Escort Services has set up websites offering services under names such as Singapore Casino Escort, Sentosa Casino Escorts and Marina Bay Casino Escorts. Calls to the company were left unanswered.

Problem gambling

Singapore citizens and permanent residents must pay a S$100 daily levy to enter the casinos, or S$2,000 for an annual pass, in a government effort to deter those who can’t afford to gamble. The casinos had collected about S$70 million in entrance fees as of May 10, Vivian Balakrishnan, the minister for community development, youth and sports, said last month.

Malvin Lim, 39 and unemployed, says he’s gambled more than 20 times since they opened, betting as much as S$3,000 each time. He’s lost about S$8,000 at baccarat.

“I’m using my savings to gamble and so far I haven’t had to borrow any money to play,” Lim said.

The National Council on Problem Gambling, set up in 2005, said calls to its helpline have increased “significantly” since Resorts World opened and more people have asked to be added to a list preventing them from entering the casinos.

V. Radakrishnan, a 27-year-old interior designer for offices and pubs, said he’s spent S$13,000 at Resorts World Sentosa’s jackpot machines and baccarat tables. While he’s won about S$6,000 at the slot machines, he said he has yet to “conquer” the baccarat tables.

“It’s just for fun and I don’t mind losing,” Radakrishnan said as he entered the Marina Bay Sands. “I look at it as my contribution to the economy. The government should be happy.”


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