Inside Asian Gaming

INSIDE ASIAN GAMING | February 2011 4 Editorial Inside Asian Gaming is published by Must Read Publications Ltd 8J Ed. Comercial Si Toi 619 Avenida da Praia Grande Macau Tel: (853) 2832 9980 For subscription enquiries, please email subs@asgam.com For advertising enquiries, please email ads@asgam.com or call: (853) 6680 9419 www.asgam.com Inside Asian Gaming is an official media partner of: http://www.gamingstandards.com Publisher Kareem Jalal Director João Costeira Varela Editor Michael Grimes Contributors Desmond Lam, Steve Karoul I. Nelson Rose, Richard Marcus Shenée Tuck, James J. Hodl Andrew MacDonald William R. Eadington Graphic Designer Brenda Chao Photography Ike Michael Grimes We crave your feedback. Please email your comments tomichael@asgam.com Of Canaries and Coal Mines Claims in a civil legal case that illegal junket activity has taken place at Marina Bay Sands is not the ideal birthday present for Las Vegas Sands Corp’s Singapore resort as it approaches its one-year anniversary in April. Generalised claims of illegal junkets in the Singapore market have been made before. The issue has been discussed in this magazine. This time, more specific allegations have surfaced in a court case. High roller Lester Ong Boon Lin claims he doesn’t after all owe LVS S$250,000 in gambling losses because he got the money to play via credit issued by an unlicensed junket. LVS’s instinct will probably be to fight the case. One wonders whether Mr Ong would have been quite so keen to cry wolf with claims of unauthorised junkets at MBS if he had stayed on a winning streak. On several occasions, high rollers at the Lion City’s casinos who suddenly decide they didn’t much like losing large amounts of money have taken Singapore’s reputation for having strong and executable law and used it as a stick with which to beat the casinos by threatening lawsuits. Loser litigation is also an issue in the United States. But in Singapore, once a few test cases have been run and in likelihood thrown out, that trend for loser litigation may die away. Letting theOngBoon Lin caseget to court could, though, be a high risk strategy. It could amount to washing Singapore’s gaming linen in public. That’s something the Singapore government is unlikely to enjoy. The city-state has until now prided itself on running one of the cleanest and best regulated casino gaming jurisdictions in the world. Even if MBS settles this case out of court, it could still face an inquiry by the Casino Regulatory Authority of Singapore (CRA). That body could be placed under significant political pressure at home—including from voices in the still powerful anti-gaming lobby—to investigate further Mr Ong’s claims. Any investigation could also put a crimp in the leeway the casino operators currently have to self-report breaches or potential breaches of the Casino Control Act and its regulations. But without such an investigation and some regulatory clarity on the junket issue, how long before another Ong Boon Lin emerges to threaten the Singapore operators and claim he’s a victim of unauthorised credit issuers? Vexatious or not, what impact if any could these claims have on the possibility of junkets being legitimately licensed in Singapore? We should be wary of making assumptions when answering this question. It would be dangerous, for example, to assume that Singapore would rather set its face against junkets entirely than investigate whether unauthorised ones might have been going on under its nose. It would be equally dangerous, however, to assume that Singapore lawmakers will have the political courage to admit they perhaps underestimated the challenges of running a casino gaming jurisdiction. If Singapore can’t beat the junkets, it should at least consider co-opting them. Singapore could of course press on with its current US-style system of allowing only the casinos themselves to issue the credit. But if that’s not working, and as Mr Ong Boon Lin claims, the current law as it applies to credit issuance is being flouted and held in disrepute, then the price of inaction could be very high. As New York City appears to have proven with the ‘broken windows’ theory of William J. Bratton, the former head of the NYC Transit Police, if you allow graffiti and fare dodging to go unchecked on your bus and subway system, pretty soon afterwards you have more serious crime as a routine occurrence. Singapore could alternatively choose to try and force reality to conform to its own vision of how things should be. It could station gaming inspectors on a permanent basis in casinos’ high limit rooms to oversee those operations. But that would be like being an occupying army without an exit strategy, not to mention expensive to administer and cumbersome and intrusive for players and operators alike. That, in turn, could lose Singapore valuable gaming tax revenue by creating disincentives for wealthy locals and overseas visitors to come and play. Another possibility would be to get the market to police itself, by licensing some junkets. They could then act as canaries in the Singapore gaming ‘coal mine’. Any junket that had gone to the trouble and expense of submitting to all the background checks required for an official licence would chirp like crazy at the first sign of a property being poisoned by illegal junkets. The problem with this is that while Resorts World Sentosa appears willing to work with junkets if properly authorised—a number currently have applications pending with the CRA to work at RWS—MBS has shown no signs so far that it wants them. In any case, using market forces to police markets doesn’t always work—as the global financial crisis of 2008 showed—but it would arguably be the least worst option in this case.