In search of buzz, Asia bets on gambling - Tuesday 12th of April 2005

Dazzled by the prospect of soaring tax revenues and an influx of free- spending tourists, Asian governments are starting to drop their bans against casino gambling.

Singapore became the latest country to join the race for Asia's gamblers when it announced Monday that it would license two resort casinos in the wealthy city-state. Prime Minister Lee Hsien Loong told Parliament that it had to keep up with the trend. "We cannot stand still. The whole region is on the move. If we don't change, where will we be in 20 years?"


Spying an opportunity, Thailand, Taiwan, and Japan may follow suit. Even India and Indonesia have floated the idea of Vegas-style casinos to draw tourists and create jobs. For many, the ultimate prize is China, where would-be gamblers, faced with a ban at home, travel far and wide to bet their newfound riches.


Untaxed and unregulated gambling is already rife in Asia, from cock-fighting bouts and horse races, to lotteries and card games.


Proponents of gambling say the attraction of licensed casinos is the ability to tax and control, as well as choke off underground betting. But critics say poorly regulated casinos can become magnets for money laundering and organized crime.


In the past, Asian governments have demurred, swayed by opposition from religious and social groups. But a spurt of casino development in Macao, a former Portuguese colony returned in 1999 to Chinese rule, has reminded Asia of the spending power of the rising Chinese middle class. Last year Macao raked in $5.1 billion in gambling revenue, rivaling figures from Las Vegas, as mainland Chinese beat a path to its 17 casinos.


Governments also recognize that their own citizens are traveling long distances to gamble. "The catalyst was the reform in Macao and the growing affluence of the middle classes [that] are flying to Nevada and Australia to come and gamble," says Jan McMillen, director of the Center for Gambling Research at the Australian National University, in Canberra.


Rolling out the red carpet for casino operators is hardly a risk-free option for Asian governments, though. Social opposition to gambling on both moral and practical grounds is deep-rooted, and proposals to ease the rules have drawn fire. Influential Buddhists oppose the move in Thailand. And in Singapore, where public protest is rare, more than 29,000 people signed a petition against the casinos. Some cabinet members, too, voiced concerns, but it wasn't enough to stop Monday's decision.


Lee Kuan Yew - Singapore's former leader and father of the current prime minister - rejected a similar casino plan in 1965. In his memoirs, he cites his own father, a compulsive blackjack player who pawned his wife's jewelry, as a reason. Today, he backs his son, saying the move is an economic necessity.


Observers say the decision is the biggest to date by Prime Minister Lee, who took office last August and must call elections by 2006. "If [the casino] fails to bring tourists, then it's a major disaster - that's why the stakes are high," says Chua Beng Huat, a professor of sociology at the National University of Singapore.


Government officials say they would deter Singaporeans with a membership fee of $62 a day and monitor local gamblers for signs of addiction. Opponents say this would not go far enough. "There are many ... ways for compulsive gamblers to sidetrack this rule. People can still get hurt," says Arthur Tan, a petition organizer.


Thailand hasn't ruled yet on a recent proposal by a Malaysian company to build a casino near the resort island of Phuket. Prime Minister Thaksin Shinawatra has promised to hold a referendum before overturning Thailand's decades-old ban on gambling houses. At present, only racetracks and national lotteries can accept wagers, though several casinos are conveniently located just across Thailand's borders in Cambodia and Burma.


Singapore's two casino resorts, worth $3 billion and expected to open in 2009, are central to its aim of doubling tourist numbers to 17 million a year, tripling annual tourist spending to $18 billion, and creating about 100,000 jobs. Proponents tout these resorts - which will include theme parks, museums, and malls - as a way for Singapore, a manicured tropical island of condos and malls, to overhaul its conservative reputation and compete with more-exotic Asian destinations.


Singapore has received 19 proposals from major players in the casino business, including Las Vegas giants like MGM Mirage and Wynn Resorts Ltd., eager to get in on the action.


But the claim that casinos can revitalize tourist industries shouldn't be taken at face value, says Ms. McMillen, who has studied Australia's experience. Its first casino opened on the island of Tasmania in 1973 and proved a success that other areas replicated, ending the novelty factor. The result was a short-term boom in tax revenues that bottomed out, leaving a rash of gambling addicts and a social backlash. A similar trend emerged in New Zealand, which also found minimal impact on tourism.


Both countries have since backpedaled. "It's fascinating to look at the rest of the world and wonder if they've learned from our experience," says McMillen.

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