The Ministry of Home Affairs of Singapore (MHA) recently issued a public consultation paper seeking feedback on its proposals to restrict remote gambling in Singapore. Whilst the provision of gambling is prohibited in Singapore under the Common Gaming Houses Act and the Betting Act (unless specifically permitted by way of a licence or exemption), these laws do not expressly apply to remote gambling as they were enacted before the internet era.
The underlying concern expressed in the consultation paper was that remote gambling, which relies on the internet, telephone and other communication technologies to facilitate gambling, is exploding exponentially, particularly with the advent of smartphones and other mobile devices. Remote gambling may be cause of even greater concern than terrestrial gambling as it is easily accessible anytime and anywhere in a society that is increasingly tech-savvy. Studies have shown that the nature and design of the games (in particular casinostyle online games) lend themselves to repetitive play and addictive behaviour. Remote gambling operations may also become a potential source or conduit of funds for illegal activities and syndicated crime.
The key proposals raised in the public consultation are set out below:
- As an extension of Singapore’s current approach to gambling, it is intended that the existing laws governing terrestrial gambling will be expressly extended to remote gambling. Remote gambling will not be permitted unless specifically allowed for by way of an exemption or licence. The MHA is also considering whether to allow an exemption for regulated entities to provide remote gambling and if so, the nature of provisions for a tightly controlled exemption regime with constraints on the type of operator and the imposition of stringent social safeguards.
- It is also intended for new laws to be introduced to regulate and provide for enforcement powers against facilitators, intermediaries and providers of remote gambling services. Measures will be put in place to block access to gambling websites, block payments to remote gambling operators and prohibit advertisements promoting remote gambling.
- The distinction between social gaming and online gambling is also blurring with the increasing popularity of casino-style games on social media platforms. Such casino-style social games may desensitise youths to the dangers and ills of gambling. Public education initiatives to raise awareness of the risks involved in remote gambling and gambling simulation games will be strengthened and intensified to ensure that social gaming and online gambling remain in separate spheres.
The MHA intends to study the experiences of other jurisdictions in respect of online gambling. It was noted that there is a wide spectrum of regulatory approaches taken by different countries. While countries such as France and the United Kingdom have an open remote gambling market permitting licensed operators to offer a wide range of remote gambling products, other countries such as Hong Kong and Norway have taken a more restrictive approach to remote gambling by allowing one or two operators to offer a small number of products, subject to strict regulations and social safeguards.
The regulation of online gambling is likely to pose a challenge for Singapore even as it formulates its approach towards restricting remote gambling. Other jurisdictions have found that the unregulated online gambling market remains sizeable due to the constantly evolving dynamic nature of the online gaming industry and measures to block financial transactions involving unregulated online gambling operators are often bypassed through the use of foreign financial transaction intermediaries. Regulating the internet will always remain a gargantuan task for any government. Banning remote gambling altogether will only drive these operators underground and it does not stop unlicensed operators from constantly changing their URLs to avoid detection. It remains to be seen how effective these restrictions will be or the shape of exemptions that would be granted.
It is possible that remote gambling may be legalised via an exclusive licence to a single operator that is government owned or controlled. This could take the form of Singapore Pools being the only licensed operator. For this to be effective, the Government will have to enforce the closure of all other unlicensed operators. This could potentially be a technologically insurmountable task.
To be effective, some lessons could be borrowed from the introduction of the Unlawful Internet Gambling Enforcement Act (UIGEA) of the United States where the US government understandably choked the lifeline of remote gambling by criminalising all financial institutions or payment gateway providers that assist in processing remote gambling debts. Were Singapore to adopt the UIGEA approach, the financial institutions in Singapore will have to put in additional measures to prevent transactions that facilitate payment of remote gambling debts and consequently we can expect that the banks will take on more compliance costs.
The regulatory landscape in Singapore governing remote gambling is likely to change dramatically in the near future and will indeed be an exciting space to watch in the coming months.