17 Apr 2009

Speech by Mr Richard Magnus, Chairman CRA


Deputy Prime Minister and Minister for Home Affairs Mr. Wong Kan Seng,
Senior Minister of State for Law & Home Affairs, Associate Professor Ho Peng Kee,
Distinguished Guests,
CRA colleagues,
Ladies and Gentlemen,

Good Afternoon,


It is my great honour to welcome you to the inaugural CRA Workplan Seminar. As mentioned in the opening video, this is a challenging time for the business development and landscape of Singapore; to use a modern term the casino industry is an exceptionalism. The two casinos are due to open at the end of this year and early 2010. The Casino Control Act became fully operational on 1 July 2008 and we have just turned 1-year old as a statutory body on 2 April 2009.

2. This Workplan Seminar allows us to take stock of what we have done over the past year; review what needs to be done; revisit our challenges and our industry practices; as well as determine whether we are on track in meeting our statutory duties and public policies.

Learning The Business: Key Take-aways

3. Since my appointment as Chairman CRA, I have had a number of opportunities to learn more about the casino business and the industry. In September last year, I attended the 2008 International Association of Gaming Regulators Annual Conference in Rome. It has been an enriching experience for me as I listened to and had dialogues with members of various international gaming commissions, industry players, policy makers, bankers and gaming lawyers from the US, UK, Western and Eastern Europe, Africa, the Caribbean and Macau. I also had closer discussions with our counterparts in Nevada and New Jersey, the FBI Las Vegas office and a new industry player in New Jersey. Separately, I have also met up with the top management of the two Singapore IR operators and went on site to view the developments of Marina Bay Sands. These have been my key take-aways.

4. As it is, Singapore is rapidly emerging as a land-based gaming jurisdiction that will be frequented by international patrons. As the regulator of the casinos, we need to be clear of the outcomes we intend to achieve with respect to our law and order, and social and economic policies. With such clarity, we can then ensure that the implementation of the regulatory processes across the continuum of casino operations, from probity investigation to licensing, from compliance to enforcement, is consistent and well structured, calibrated, strict and yet fair. We have in fact already set the culture and tone earlier in 2005 when we conducted strict probity checks on the bidders for the Request for Proposals. Following that, we have to ensure that our regulatory governance model is right - from the start - because our entire infrastructure to be developed hinges on it.

5. In this regard, the Casino Control Act (CCA) that we have put together is comprehensive for our purposes. Unlike other gaming jurisdictions in which most regulators are under economic or revenue units, our Act and the CRA is under the responsibility of the Ministry of Home Affairs. This is right for Singapore. The Act is based on the Government Protection Model[1] with some value add-ons from the Gambler Protection Model[2]. In other words, the Act aims to protect the industry by ensuring that gaming in the casinos is conducted honestly and is free from crime. It also tries to protect Singaporeans from gambling beyond their means. The objectives and policy goals of the Act have been clearly enunciated by Deputy Prime Minister and Minister for Home Affairs, in the 2nd Reading Speech of the Casino Control Bill. This is something that we should not take for granted as there are jurisdictions that have been changing their governance modality and this had caused difficulties to the industry. We have learnt from this, and sought to avoid these problems.

6. To carry out our regulatory duties effectively, inter-agency collaboration with the social services, police as well as other law enforcement agencies is a sine qua non. This cooperation also provides institutional checks and balances to our various competing interests. This lack of collaboration is found in some jurisdictions; resulting in various problems: vice, corruption, high gambling addiction and poor law and order. Sustaining and institutionalising our multi-disciplinary approach is important against an industry where the nature of business is long term. In addition, sharing of information with other developed gaming jurisdictions is essential. It is also necessary for us to benchmark ourselves against well experienced and internationally recognised gaming jurisdictions and against stringent international requirements set by international bodies such as the Financial Action Task Force, to ensure that our legislation and regulatory practices are up to mark.

7. As the regulator of a new industry, we also need to jump start our domain knowledge in the economics of casino operations and gaming. These include the regulation and control of casinos, the mathematics of casino game rules, the different casino organisational structures, and casino management, such as casino marketing, casino cage operations, casino revenue and reporting of cash transactions etc. Besides understanding the business, we also need to keep ourselves abreast on the latest developments and research in the industry, such as research on gaming behaviour, utility analysis of gaming motivation, social intelligence, and the latest technology used in gaming.

8. Fortunately, over the past 3 years, we have been building up a core team of officers who have learnt the business well and are able to impart their knowledge to the newer officers to hasten the steep learning process. A comprehensive and intensive training preparation plan has also been specifically developed to train and prepare our officers over the next 6 months to regulate the two casinos.

9. Many a times, we have looked beyond Singapore to other experienced regulators to develop our mastery. Our officers have been sent on study visits and training attachments to our more experienced counterparts in top-tiered jurisdictions where there are large scale casinos such as Nevada, New Jersey, Victoria and New South Wales. The CRA Board has also made it a point to visit some of these jurisdictions to gain a better understanding of the industry and of the business of regulating the casinos.

10.I am heartened to receive positive feedback from our fellow regulators that our officers have visited, complimenting our officers on their knowledge pick up abilities and keen desire to learn. This definitely stands us in good stead to regulate the two casinos when they are operational. Despite the fact that the casinos in Singapore are not yet in operations, CE CRA has been elected to the Steering Committee for the International Association of Gaming Regulators. This is of strategic import to us as it allows the CRA to tap on to a hinterland of knowledge, and experience and affords us training opportunities and the opportunity to benchmark ourselves.

Legislation to Regulate the Casinos

11. Early this year, the CRA finalised the Technical Standards for Electronic Gaming Machines (EGMs). EGMs deployed in our casinos must be fair, secure, reliable and auditable. The standards which we have put out describe key technical requirements that serve to achieve this. In the casino industry IT uses and application are a core nerve of the operations. Over the next few months, there will be many more such regulations and standards which we will be publishing.

12. A tremendous amount of work and effort has to be put in before a single standard or regulation could be promulgated. Each standard or regulation is a culmination of our research, learning and understanding from our overseas counterparts and consultation and feedback from the industry stakeholders. It also requires careful thought and sensible examination to ensure that the regulations, policies and practices are relevant and applicable to our local context, and achieve our objectives. Nonetheless, we will do this in good time before the opening of the two casinos in late 2009 and early 2010.

Focus of the CRA Board

13. The CRA began as a division in the Ministry of Home Affairs in June 2005 following the government's decision to build two IRs with casinos here. Since it became a statutory board on 2 April 2008, my Board members and I have focused our efforts on establishing sound corporate governance within the organisation, building up its capacity and finalising the legal groundwork for regulating the various aspects of the casino.

14. On building up the CRA's capacity, we have ramped up our recruitment efforts and I am delighted to share that we are currently over 70 strong. This is well past the halfway mark of the full staff strength we aim to achieve before the opening of the casinos. At our last recruitment drive, we received overwhelming responses from applicants who are keen to join us. There were more than 2,000 applications for the 40 over positions that we advertised for.

15. Having said that, we are very stringent in our recruitment efforts as we have to ensure that the right people with the right attitude and values join the CRA. This is because the industry is a challenging and sensitive one; our officers must possess high integrity and have the mental resilience not to fall prey to temptations. That is why integrity is a core value that we prize.

Sustaining the CRA Pioneering Spirit

16. I have also observed that, regardless of their background, age and experience, one of the primary reasons why people join us is that they are keen to be pioneers in the industry. Most of them want to play a part in shaping the policies and regulations that the two casinos will have to adhere to and to leave their legacy behind. This pioneering spirit has been exemplified in the innovation of the Casino Licensing Application System or CLAS - where technology is used to minimise the hassle and tedium of filling out the voluminous Personal History Declaration Form to achieve efficiency for both the regulator and operator, a pro-business initiative without compromising on security. Such technology is the first of its kind to be used by a casino regulator and in Asia-Pacific. Moving forward, we will continue to keep this pioneering spirit alive within the organisation.


17. To our CRA colleagues, as we gear up and prepare for the opening of the two casinos, it is necessary to emphasise that we must not lose sight of the importance for all of us to remain rooted and closely aligned to the Home Team Mission of maintaining safety and security in Singapore. For this afternoon's seminar, I urge you to share your views openly and to raise any questions that you may have during the Panel Discussion. As the video had aptly portrayed, let us continue to keep up our momentum, like the team of triathletes training for their maiden race, as we forge ahead in the coming months with our preparations for the opening of the two casinos.

18. Thank you.

[1] In the Government Protection Model, the government provides regulation to protect the gaming industry and the economic interests of the state. The Government's role in protecting the industry is to ensure that the industry is both free from crime and honest (.e.g. through licensing, strict enforcement, etc). In this model, the state's revenues are also protected through stringent accounting, audit and reporting requirements.

[2] In the Gambler Protection Model, the central notion is that the casinos should not exploit the public by encouraging them to gamble or exploit gamblers by encouraging them to gamble beyond their means.