On 7 October 2014, the Remote Gambling Bill 2014 (the “Bill”) was passed in Parliament. The Bill provides the legislative framework to regulate remote gambling activities in Singapore.
What is remote gambling?
The expression “remote gambling” is very widely defined under the Bill (being gambling in which a person participates by the use of remote communication, which includes communication through the Internet and any other kind of electronic or other technology for facilitating communication). However, the Second Minister had stated in his wrap up speech on the Bill that as a matter of principle, the Bill is not intended to cover social games (such as Candy Crush, FarmVille and Monopoly) in which the players do not play to acquire a chance of winning money, and where the game design does not allow the player to convert in-game credits to money or real merchandise outside the game. In this regard, the Second Minister informed Parliament that the Bill will not impede the development of legitimate gaming businesses, and that the Ministry of Home Affairs will work with the Media Development Authority of Singapore and the industry to clarify the application of the law.
Need for regulation
The Second Minister for Home Affairs and Trade & Industry (the “Second Minister”) informed Parliament that the remote gambling market is large and growing fast, with an annual growth of 9% and an estimated size of between US$30 and $40 billion. This translates to about five times the expected growth of conventional terrestrial gambling.
There is greater cause for concern with remote gambling as illegal operators of such activities are commonly associated with other criminal activities including syndicated crime. The additional criminal aspect to such a lucrative activity also heightens the risk of money laundering. There are no restrictions on the types of games or bets offered in this activity. It has also been pointed out that the nature and design of some remote gambling games lend themselves to repetitive play and addictive behaviour.
Main provisions of the Bill
The stated purpose of the Bill is to regulate remote gambling and remote gambling services affecting Singapore. The Bill will prohibit all forms of remote gambling activities, unless exempted, and enable the Singapore Government to introduce a comprehensive set of blocking measures, such as website blocking, payment blocking and advertising bans.
Persons involved in the entire range of remote gambling will have committed an offence, from individual gamblers to facilitators, agents and bookies, to remote gambling operators. The prohibition against remote gambling activities would apply to facilitators and remote gambling operators even if they reside overseas, as long as their customers are in Singapore. Additional protection for young persons, those below 21 years of age, is set out in the Bill.
The Bill also bans remote gambling advertisements and promotions on all forms of media, both electronic and non-electronic, including the Internet, broadcast and print media.
Further, the Bill provides for powers to block access to websites and payment transactions related to unlawful gambling activities.
Obligations of Internet Service Providers
The Bill provides for powers to issue access blocking orders to Internet Service Providers (“ISPs”). The orders will require ISPs to take reasonable steps to disable access to websites identified by the Ministry of Home Affairs. An ISP which does not so comply will be liable for an offence.
Obligations of financial institutions
Because financial transfers are key to gambling transactions, the Bill makes special provisions in this regard requiring action by both financial institutions and financial transaction providers.
The Bill defines the term “financial institution” as any bank or card issuer licensed under the Banking Act, any holder of a stored value facility under the Payment Systems (Oversight) Act, any operator of a payment system designated under the Payment Systems (Oversight) Act or any other person licensed, approved, registered or regulated by the Monetary Authority of Singapore (the “MAS”).
The term “financial transaction provider” is defined in the Bill and includes (i) any creditor, (ii) any card issuer, (iii) any operator of a terminal at which an electronic fund transfer may be initiated, (iv) any operator of a money transmitting business, and (v) any operator or any participant in a payment system or network used to effect a credit transaction, an electronic fund transfer, a stored value product transaction or a money transmitting service, or (vi) any participant in a prescribed payment system, being a payment system that is used or may be used in connection with or to facilitate payment to a remote gambling service. This definition does not include financial institutions.
The Bill provides for the blocking of payment transactions to and from the accounts of remote gambling operators. Payment transaction blocking orders can be issued to financial institutions in relation to remote gambling operators. The Bill enables the blocking of electronic fund transfers as well as transactions via credit and debit cards.
The Bill empowers an authorised officer to direct the MAS to give a financial institution and/or a financial transaction provider a blocking order. Such an order may require the institution or provider not to accept credit extended to the targeted person, not to accept any cheques, bank drafts or similar drawn by or in favour of that person, not to make or accept any electronic funds transfer, or any funds transmission, to or from that person, or to block payments or otherwise prevent or prohibit transactions.
Failure of a financial institution or financial transaction provider to comply with a payment transaction blocking order will be an offence. The Bill also provides a financial institution or a financial transaction provider with criminal and civil immunity for complying with access blocking or payment transaction blocking orders.
Exempt operator regime
The Bill allows for a strictly regulated exempt operator regime despite Singapore’s prohibitive stance on remote gambling, due to concerns that the Bill’s provision would drive remote gambling activities underground and exacerbate law and order concerns. The exempt operator regime features strict qualifying criteria and stringent operating conditions.