INDUSTRY OPINION

Singapore on cusp of regulatory overhaul

Wai Ming Yap*

On 3 April 2020, the Ministry of Home Affairs of Singapore (MHA) announced that it will be reconstituting the Casino Regulatory Authority (CRA) to establish the Gambling Regulatory Authority (GRA) by 2021. The GRA will have an expanded mandate to regulate the entire gambling landscape in Singapore and aims to consolidate and optimize gambling regulatory resources within a single agency.

The MHA also announced that it would be amending all gambling legislation by 2021 to ensure that its regulatory mechanisms can effectively address evolving gambling products and business models, including the need to regulate products such as “mystery boxes” and reviewing the penalties for offences to ensure consistency across land-based and online gambling.

It is anticipated that there will be significant changes made to the gambling regulatory landscape in Singapore by 2021 with the establishment of the GRA and the amendments to existing gambling legislation.

Gambling regulation in Singapore is currently overseen by various government agencies. The CRA regulates the operations of Singapore’s land-based casinos, the Gambling Regulatory Unit of the Ministry of Home Affairs regulates remote gambling activities and private lotteries, while the Singapore Totalisator Board oversees the horse betting, sports betting and other betting services operated by its wholly-owned subsidiary, Singapore Pools (Private) Limited.

Gambling is regulated in Singapore under a patchwork of different laws depending on whether the gambling activity is land-based or remote. For land-based gambling, the Betting Act regulates common betting-houses, betting in public places and bookmaking, the Common Gaming Houses Act regulates common gaming houses, public gaming and public lotteries, the Private Lotteries Act regulates private lotteries, and the Casino Control Act regulates the two licensed landbased casinos in Singapore.

As a result, the gambling landscape in Singapore has not always kept pace with the growth in non-traditional gambling products. The distinction between gambling products and skill-based gaming products is becoming increasingly blurred. For example, various mobile gaming products have incorporated elements of gambling, while traditional gambling products have been reimagined to incorporate skills-based elements (e.g. slot machines with joysticks). In recent times, experts in Singapore have raised concerns that loot boxes are linked to problem gambling because of the “risk-reward factor” inherent in their mechanisms.

These concerns are compounded given that these loot boxes are an increasingly common feature of mobile phone games which are hugely popular in Singapore. Despite these concerns, “loot boxes” are not expressly addressed or regulated under existing gambling legislation in Singapore.

As part of the MHA’s review and amendment of existing gambling legislation, we are likely to see an expansion of existing legislation, or the introduction of new legislation to regulate non-traditional gambling products, such as “loot boxes”. A number of other jurisdictions such as the UK, Japan and China have already adopted regulations in respect of loot boxes, such as by requiring the drop rates for “loot boxes” to be disclosed or introducing age and other restrictions. Other countries such as Belgium have banned “loot boxes.”

Any regulation of such gaming products with gambling elements will need to be carefully balanced against the interests of the gaming industry and game developers. Singapore has generally been supportive of legitimate gaming businesses (as opposed to the casino style gambling and sports betting business) and has introduced initiatives to ensure the continued growth and development of the gaming industry particularly e-sports.

We may also see regulation being introduced in respect of betting on e-sports events which is becoming increasingly popular in Asia. Currently, e-sports betting is not expressly covered by existing gambling legislation in Singapore.

It is also possible that we may see a consolidation of the various gambling legislations in order to streamline the gambling regulatory landscape in Singapore. We may also see stricter anti-money laundering and terrorism financing regulations being put in place in relation to gambling operations.

The consolidation of the regulation of gambling within a single agency, the GRA, is likely to result in a more holistic, comprehensive and streamlined regulatory approach towards gambling policies and issues. It is expected that the GRA will be able to respond more expeditiously to regulate emerging gambling products. Given that non-traditional gambling products are constantly evolving, a single agency may be to act more quickly to review and regulate these products.

However, it is not anticipated that there will be any significant relaxation of the strict regulation of gambling in Singapore. In Singapore, all forms of remote gambling are prohibited unless exempted, while land-based gambling is only permitted in licensed casinos and betting outlets. The MHA emphasized in its announcement that notwithstanding the proposed updates in law, the MHA will retain a “generally prohibitive stance towards gambling, and continue to maintain a riskbased regulatory approach towards existing gambling operators”.

The MHA has indicated that it will engage key stakeholders to take on board their views in the coming years, including gambling operators, religious organisations, social service agencies, and members of the public. Stakeholders may wish to keep a close watch on the upcoming changes to the Singapore gaming regulatory landscape and to provide feedback and proposals when public consultations are announced.

*Wai Ming Yap is a partner at Morgan, Lewis & Bockius LLP and is also the Managing Director at Morgan Lewis Stamford LLC, a Singapore law corporation affiliated with Morgan, Lewis & Bockius. Copyright 2020. Morgan, Lewis & Bockius LLP. All Rights Reserved. This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.