Move to Allow Casino Operators’ to Increase their Approved Gaming Area

14 Mr Christopher de Souza asked the Minister for Trade and Industry (a) what are the reasons for providing Marina Bay Sands and Resorts World Sentosa with the option to increase their Approved Gaming Area by 2,000 square meters and 500 square meters respectively; (b) whether a study has been carried out to examine whether an increase in gaming area would cause a rise in problem gambling; and (c) what further measures will be put in place to help ensure that problem gambling will be deterred.

15 Assoc Prof Daniel Goh Pei Siong asked the Minister for Trade and Industry why the expansion of gaming areas for the two casinos by 2,000 square meters for Marina Bay Sands (MBS) and 500 square meters for Resorts World Sentosa (RWS) and the increase in gambling machines from 2,500 to 3,500 for MBS and 3,300 for RWS are necessary for the commercial viability of the proposed expansion of the Integrated Resorts.

16 Mr Dennis Tan Lip Fong asked the Minister for Trade and Industry (a) why did the Casino Regulatory Authority allow MBS and RWS to increase their approved gaming area by 13% and 3% respectively, and their slot machines by 40% and 34% respectively; and (b) prior to the approvals, were any stakeholders consulted in respect of the possible social implications on Singaporeans arising from the proposed increases and, if so, who were these stakeholders.

17 Mr Gan Thiam Poh asked ask the Minister for Trade and Industry (a) how does the Government ensure that the land cost to be paid by the existing Integrated Resort (IR) operators is fair without calling for a public tender; (b) what is the estimated increase in tax revenue that both IRs are expected to generate with the additional investment; (c) whether the increase in tax revenue will be able to support the increased health care needs of Singaporeans; and (d) whether the increase in casino entry fees can be channelled to meet the increased health care needs of Singaporeans.

18 Assoc Prof Daniel Goh Pei Siong asked the Minister for Trade and Industry (a) how much land has been allocated for the proposed expansion of MBS and RWS; (b) how much will MBS and RWS be paying for the land; and (c) how much additional land cost will each have to pay for the expansion of the gaming areas of the casinos.

The Senior Minister of State for Trade and Industry (Mr Chee Hong Tat) (for the Minister for Trade and Industry): Mr Speaker, Sir, may I have your permission to take Question Nos 14 to 18 together?

Mr Speaker: Please do.

Mr Chee Hong Tat: Thank you, Sir. The business model of an Integrated Resort (IR) combines a controlled proportion of gaming activities with a wide range of high quality non-gaming amenities such as theatres, theme parks, museums, hotels, MICE facilities, restaurants and retail shops. Gaming activities are an important source of revenue for the operators, contributing more than two-thirds of their total revenue. The gaming revenue makes it commercially viable for them to offer the non-gaming facilities, as one integrated package.

The two IRs have not decided to activate their additional gaming options. If both IRs exercise their options for additional gaming area in full, gaming area as a proportion of total floor area will drop from 3% today to 2.3%, as the expansion of the non-gaming area is much larger. The IRs have also stated that the additional gaming provisions will be targeted at higher tier, non-mass market players, who are mostly tourists.

Based on the Gambling Participation Survey conducted by the National Council on Problem Gambling (NCPG), the probable problem and pathological gambling rate of Singapore residents has decreased from 2.6% in 2011 to 0.9% in 2017. This includes all forms of gambling such as casino, horse racing and online gambling.

The Government takes a serious view on tackling problem gambling and will continue to work closely with our community partners to help affected individuals and families. We had discussed with them before making the announcement. The Government will also be strengthening our social safeguards. Minister Desmond Lee has explained how we are doing so in his reply to Mr Seah Kian Peng.

Sir, the S$9 billion investment by the two IRs will introduce additional world class attractions and experiences for both tourists and locals. These are expected to attract an additional 500,000 international visitors each year and contribute S$500 million annually to Singapore’s economy. The investments will also create up to 5,000 new jobs directly and increase business opportunities for Singapore companies.

When there are substantial investments that can benefit our economy and our workers, the Government is open to directly allocate land to these investors. This is a longstanding policy that has been extended to both local and foreign companies across different industries. The IRs will pay fair market value for their land, as determined by the Chief Valuer in accordance with market conditions and established valuation principles.

The expansion site for Marina Bay Sands is 3.3 hectares, at a cost of $1.3 billion. Resorts World Sentosa has set aside a budget of $1 billion to intensify the use of existing land and purchase around one hectare of new land.

If the IRs choose to activate their options for additional gaming area, they will have to pay additional costs for these areas. The amount payable will be determined by the Chief Valuer based on prevailing market conditions when the option is exercised.

Sir, Mr Gan also asked about funding for healthcare needs. As the Minister for Finance had explained at Budget 2018 and Budget 2019, Singapore's healthcare spending will rise with an ageing population and advances in medical treatment, drugs and technologies. We need to be well-prepared for this, by building additional healthcare capacity and ensuring that we have sufficient financial resources to fund the higher healthcare spending in a sustainable manner.

This will require a structural increase in our operating revenue. Our revenue base is diverse and resilient, including taxes on personal and corporate income, consumption and property. The tax revenue from the two IRs are one of the many sources of overall tax revenue. The diverse sources of revenue are supported by a diversified economy. As we continue to grow Singapore's economy, we will adopt a multi-pronged strategy, with many different sectors and trading partners.

Mr Speaker: Assoc Prof Daniel Goh.

Assoc Prof Daniel Goh Pei Siong (Non-Constituency Member): Thank you, Mr Speaker. I thank the Senior Minister of State. My question is regarding the gaming areas. So, am I correct to say that if the gaming area is not expanded then the world class attractions would be projected to be loss-making?

Mr Chee Hong Tat: Sir, I thank the Member for his supplementary question. The IR business model, as I explained in my answer, means it is an integrated package. You need the gaming activities to come together with the non-gaming activities so that it is commercially viable for the operators. Currently, more than two-thirds of their total revenue comes from gaming. So, for the new facilities, the theme parks, the 15,000-seater arena, these are expensive facilities which without the gaming provisions, the additional gaming provisions as options for the operators, they may not find it commercially viable to make these additional investments to create these additional jobs. This was actually explained by the CEO of MBS and I quote him, he said, "The casino revenue generation is very important because it pays for things that sometimes lose money, sometimes have a very low return, or that are just very expensive."

Mr Speaker: Mr Dennis Tan.

Mr Dennis Tan Lip Fong (Non-Constituency Member): Just to clarify with Senior Minister of State, Mr Speaker. On the second part of my question, prior to the approvals, were any stakeholders consulted in respect of possible social implications on Singaporeans arising from the proposed increases and, if so, who were these stakeholders? May I ask the Senior Minister of State to answer this question?

Mr Chee Hong Tat: Sir, we had engaged the National Council on Problem Gambling and also key stakeholders from religious groups and voluntary welfare organisations before the announcement was made. These are our key partners because they are the people who are on the ground dealing with the issue of problem gambling, helping the families and the affected individuals. And when we discussed with them, they told us that they understood why we had to do this in a package. They welcomed the additional social safeguards that the Government will be introducing and, more importantly, I think there was a commitment that we should continue to work together hand-in-hand to help tackle the problem of gambling, including online gambling, new types of risks facing Singaporeans. We work hand-in-hand and we work together to help the affected individuals and their families.

Mr Speaker: Mr Dennis Tan.

Mr Dennis Tan Lip Fong: Thank you, Mr Speaker. Just one last clarification. Were there any objections or reservations expressed by any of these stakeholders and, if so, who were they?

Mr Chee Hong Tat: Sir, I think I have explained in my answer earlier. They understood why we had to do this as a package. They noted that the rate of problem gambling has been coming down but, as Minister Desmond Lee explained, just because the rate has come down does not mean that we, therefore, become complacent, we continue to take a serious view on how we can tackle this problem together. So, the community partners, the religious groups, the voluntary welfare groups said that they welcome the additional social safeguards – the increase in the levy, the additional safeguards. Importantly, I think we need to continue to work together to tackle this problem hand-in-hand.

Mr Speaker: Mr Gan Thiam Poh

Mr Gan Thiam Poh (Ang Mo Kio): I do not think my question had been answered. How do you determine the land cost because this is without tender? And the second question is what is the projected revenue for the additional investments? Is there any projection?

Mr Chee Hong Tat: Sir, I have answered the question actually. Land cost will be determined by the Chief Valuer based on the market value. This is again a long-standing practice. The IRs will pay the fair market value as determined by the Chief Valuer. The second part of the question: of course, we made some projections in terms of with the increase in the number of visitors, tourists, what is the additional value-add to Singapore's economy. I mentioned the number $500 million annually. But the exact number depends also on the on the global economy, depends on how well we grow our tourism sector because, mind you, the IRs are not the only thing we are going to develop to grow our tourism sector. We also have Mandai. We also have the Greater Southern Waterfront. We are going to rejuvenate Orchard Road. We are looking at a new tourism site at Jurong Lake District and many others.

2.00 pm

Mr Speaker: End of Question Time. Ministerial Statement. Minister for Defence.

[Pursuant to Standing Order No 22(3), Written Answers to Question Nos 19, 21-22, 25, 27-28, 33, 35, 41-44, 47-48, 51, 54-55, 57, 59-63 and 65-66 on the Order Paper are reproduced in the Appendix. Question Nos 20, 23-24, 26, 29-32, 34, 36-40, 45-46, 49-50, 52-53,56, 58 and 64 have been postponed to the sitting of Parliament on 7 May 2019.]