Introduction
Gambling refers to the exchange of money based on an event whose outcome is uncertain (Frey, 1998). The primary reason behind gambling is to win more money though this is not always the case (Frey, 1998). Moreover, some engage in it as a leisure activity and therefore the whole idea of gambling has money as its identity. Gambling is therefore a phenomenon that is existent in both developed and developed countries though the money involved in the developed countries is considerable (Frey, 1998). Most countries have seen the opportunity that gambling provides and have either harnessed it as an industry or as a means of supporting other industries with the aim of economic growth (Frey, 1998).
History
The gaming history in Macau stretches back a couple of centuries. Macau was referred to by many as the East’s La Vegas (Clelow & Samagalki, 1997). This was before gaming started and by 2006 the revenues generated by gaming were more than 71% of the regions total revenue (Clelow & Samagalki, 1997). In recent years there have been several occasion where the revenues that have arisen fro the gaming in Macau have exceeded Las Vegas’ thus it is arguably the gaming capital of the world. The reason for the success have been varied though government support has played a significant role in the resounding success. The robust investments by investors and the general trend in gaming that has a preference for Asia are the other reasons behind the success.
The gaming industry in Macau traces its roots back in the mid 16th century when it first opened its harbours to allow for visitors (Clelow & Samagalki, 1997). During that time gaming was only popular among the construction workers (who were predominantly from China), domestic helps and harbour workers (Clelow & Samagalki, 1997). It was rather an ordinary persons game, the gambling stalls were all over due to the lack of rules to govern them (Marshall Cavendish Corporation, 2007).
The major operators of the stalls were bankers. After Hong Kong was taken by the British in the early 1840’s, Macao’s role as a trading port diminished as Hong Kong became a more preferred port (Marshall Cavendish Corporation, 2007). In 1847, Macao, then under the Portuguese government legalised gaming as a measure aimed at diversification and reviving its harbours (Marshall Cavendish Corporation, 2007). More than 200 gaming businesses were operating by 1850, the end of the 19th century witnessed the boom of the gaming industry and started and was among the world’s prominent gaming zones (Songer, 2006).
The Hong Heng Company won the monopoly to operate all casino games in 1930 (Songer, 2006). The company started immediately and is considered the pioneer of gaming as it brought order to an industry that was rather sprawling with many players. Some of the notable changes were the renovation and refurbishment of Casinos and the inclusion of shows and other social functions and shows in the gaming areas (Songer, 2006). Fan Che Pang in 1932 pioneered the dawn of greyhound racing (Songer, 2006).
He and several America later formed a club that dealt exclusively on dog racing and even built a stadium for the same. These efforts were fruitless in ensuring popularity as the games were new to most of the gamers. The government in 1937 passed a decree that allowed the integration of various games, several companies applied and received the concession and this saw the introduction of various games especially the western kind of games (Songer, 2006).
The Sino-Japanese war that started almost concurrently affected Hong Kong a great deal, several games were suspended as they depended on patrons from Hong Kong (Songer, 2006). The 119th Governor of Macau, in the 2nd month of 1961 designated Macau a status of a permanent gaming zone, and thus the region was charged with low tax rates as gaming was regarded as a tourism attraction and a major contributor of the GDP (Victorica, 1990). Jaime Silvério Marques further defined gaming as any game whose results are unpredictable and one wins by pure luck (Victorica, 1990).
In 1961 just before the expiry of the monopoly concession Marques enacted a decree that liberalised gaming to public bidding (Victorica, 1990). Two companies joined for bidding, the company that won the bid was granted the concession and went ahead to operate in gaming. The reopening of the Greyhound racing was done in the same year as Yat Yuen Canine Club opened officially in ugust1963 (Victorica, 1990).
The Casino monopoly was registered in 1962 and the first casino under this policy opened in the same year. This policy dominated Macao’s gaming industry for over forty years, in its first decade of operation more than ten games were authorised to be played in Casinos (Victorica, 1990). They include Baccarat, Fantan and Balack Jack. Pachiko was introduced in the turn of the century, the year 1998, which also saw the approval by the government to allow for betting in football just before the world cup in France (Songer, 2006). The STDM had taken over jockey and by the turn of the century it was the largest operator in gaming.
Before Macao returned to be under the sovereignty of China in 1999, several discussions and studies relating to the practical aspects of liberalising the gaming sector have been going on. The government had already considered the possibility and were awaiting a decision on what direction the gaming industry would take (Songer, 2006). Even before this legislation had been passed in 1986 that limited the number of concessions granted to three (Songer, 2006).
In 1999 the Macao special administrative region was set up, an international consultancy firm was invited to conduct studies on the perspectives of the gaming industry in Macao (Songer, 2006). A gaming committee was formed in July 200 and charged with the responsibility of conducting studies on the growth, legality, administration and policies that relate to gaming (Songer, 2006). In the next month Arthur Andersen Worldwide was hired to study the development of the industry and provide recommendations that would act as a guideline for the government’s opinion.
In exactly one year the government passed a law that stipulated the requirements for operation, eligibility of shareholders, management and taxation of all gaming related ventures (Songer, 2006). When the STDM expired on the last day of 2002 the Macao SAR granted 3 gaming concessions, this was an effort directed at influencing new dynamics to the gaming industry and creation of a strong foundation for the future development of the gaming industry (Songer, 2006).
The chief executive in October 2001 signed a regulation that made it possible to bid openly for operations and passed on rules that set the eligibility and financial requirements of the companies that may wish to participate in the gaming industry (Songer, 2006). As a result of this law the Casino Concession committee came into play under executive orders. The committee was charged with the responsibility of coordination of work especially the tender process and recommending to the chief executive after the grant of the concessions. The committee legally started the tendering process on the 2nd day of November that same year and ended it in December (Songer, 2006).
Several bidder with capital from all over the world were interested in the bid, some that had insufficient documentation were disqualified. The STDM concession contract was extended by three months since the SAR failed to grant the concession as had been scheduled. The result of the bid was announced on the 8 February 2002 and the successful applicants were SJM, Galaxy Casino and the Wynn resort. The contracts were signed within the next four months.
In December 2002 Macao SAR allowed Galaxy casino to hold a concession with Venetians Macau. after which several sub-concession followed this initial one in 2005 and 2006. after the announcement of the companies that successfully won the concession besides SJM it took the others quite sometime to construct their casinos and facilities a total of 47 casinos were constructed 28 of which were located in Macao (Songer, 2006). SJM has the largest share of the total. The results have led to the growth of Macao as a major tourist destination and a gamer’s paradise.
History of Casinos: Singapore
Singapore is one of Asia’s notable cities, it is a typical tropical city full with colour and is favourite tourist destination for most tourists due to its colourful scenery and pleasant whether. In April 2006 Singapore said that it would be legalising casinos to pave way for the construction two resorts, this legislation was contrary to the public opinion and it was directed towards promotion of tourism (Austen, 2008).
The prime minister informed the parliament that the state had decided to lift the ban that had been imposing on casino gambling since 1965 (Austen, 2008). This was a rather uncharacteristic approach as the party that was responsible for the abolition of the casino is has been in power ever since. The rationale is that the casinos would attract more Chinese tourist as they have more enthusiasm for gambling. The result is noticeable as more tourists are flowing into Singapore though Thailand poses a major threat to its new found market.
This approach is seen as a long term effort to make Singapore’s economy towards higher service industry as it has lost manufacturing competitiveness to its neighbouring China. To come of the manufacturing mentality, the leaders decided to approach its development agenda from a lifestyle approach with as much creativity. It was part of a strategy to promote and develop the tourism industry and thus promote the economic growth.
This was part of what can be considered a liberating time because the recent years a bans on magazine that have long been considered obscene by the general Singapore public has been lifted and many other measures put in place to promote tourism. The number of investors that are willing to invest in Singapore casino’s is by no means small; Asia has become haven for all willing and able to invest in the Casino industry due to the ever increasing buying power and high income levels that have led to a large propensity for big spending. Approximately twenty gaming consortium have already responded to the governments tender for proposal.
Some of the bidders have already counteracted designers to help them design the resorts. This is seen as a government effort to provide opportunity for investors to aid the attraction of tourists, who accounts for 6% of the country’s economy though many economists are of the view that such a figure is an understatement of the sectors importance in offsetting the effects of not dealing in foreign trade (Turnbull, 2007).
The importance and growth of tourism is limited by the number of tourist sites (Bucklay, 2004), therefore most tourists have used it a central point in exploring other regions for it is the hub for air travel in the region. Thus the move is seen as a way of giving tourists a reason to stop and stay a little bit in Singapore. The government plan is aimed at two separate resorts; One off Singapore’s South coast and the other on a major business district that is bristling with hotels, businesses, art centres and cultural locations (Turnbull, 2007).
One private company bid for both sites as part of a venture with a government controlled company. Other bidders included Kerzner international, Wynn Resort and an Australian casino operator. Economists predicted that the casinos would have an impact that will be felt by the economy directly. The cost of building a single casino is estimated at $1.9 billion and the revenue collected from such an investment is estimated at $2.1 per annum, a third of which will be from foreign tourists.
The project is seen to be beneficial to both construction, tourism, retail and hotel industries. The revenue to the central government in terms of taxes is approximated at about $864000 per year. The lift of the ban did not augur well with the conservatives in its population. Though the casinos had been outlawed the Singaporeans have been gambling for quite sometime (Smith, 2000). Widespread gambling on illegal soccer matches prompted the entry of the government into the sectors and now it runs a lottery and off-track betting on horses. Many in the rather conservative population feared that the lift on the ban and promotion of the casino industry would lead to increase in organised crimes, drugs and gambling addiction that were characteristic of Singaporeans before the ban on gambling was put in place in 1965.
Many of its citizens also travel abroad to game especially in Macau, though most advocacy groups feel that the lift is a sacrifice of the family well being to foreign casino operators. The plan to lift the plan was a rather unilateral affair as the prime minister rejected a call for a national referendum on the subject, most ministers in the government supported it as a good strategy for the high culture approach has failed thus the implementation of a pop culture.
Under Raffles the inhabitants of Singapore were keen on engaging in gambling. One of the most common gaming activity was cock fighting. Raffles considered gambling as the worst vices though his counterpart saw gambling as an opportunity to increase on the revenues and 1820 licences were issued to gambling businesses while Raffles was out of town. The licenses were sold at over $94 a piece and tax levied on the tables.
The different views on gambling led to arguments between raffles and his counterpart, in 1823 Raffles ordered the closure of all gambling business as per the regulation no. 4 of that year that prohibited gambling in any form as a means of eliminating the ‘vice’. He viewed gaming as responsible for the moral degradation of the society and thus any form of gambling or participation in such was prohibited by the law. The punishment associated with breaking this rule were severe and included confiscation of property and flogging of both operators and gamblers.
Farquhar was replaced by Crawfurd in 1823 as the British Resident, he supported Farquar idea on gambling much to the delight of operators and gamblers. In his first year Crawfurd permitted ten gambling dens to be operational within the town and by 1886 gambling was the most lucrative business as it contributed to over half of the total tax revenue. The jury in 1827 after the end of Crawfurd’s term demanded the prohibition of gambling as it viewed it as immoral and a nuisance to the society. Though the ban was effected in 1823 gambling flourished underground as several gambling houses were operational, notably in church street alone there were more than twenty houses.
Appeals were brought forward to restore gambling but to no avail. Resident councillors, press and governors were at the forefront in lobbying for its reintroduction (Songer, 2006). Some of the arguments brought forward by those appealing for its restoration were to the effect that underground gambling was going on with the full knowledge of the police and therefore its reintroduction will bring no major differences, some proposed that legalisation will increase the number of female immigrants as the Chinese will be accompanied by their wives to Singapore.
Eventually the Singapore government gave in and reintroduced gaming though with strict regulations which were always reviewed and made harsher by the minute. The regulations targeted both private gaming houses and lotteries that were open to the public. In 1965, after its independence from the British colonial rule, the newly instituted government banned all forms of gabling and casinos (Radel, 2004). This legislation was lifted in 2006.
Comparison
In both countries the governing authority have and continue to play a major role in the development of the gaming industry. The good government policy and the control of the gaming industry are the two factors that have promoted the growth of Macau to its present status. The government having declared it a low taxation zone made it possible for most investors to harness the opportunity and thus the creation of an environment that attracts both gamers and ordinary tourist.
The government of Macau has from time immemorial supported gaming in various ways, the recent liberalisation of the gaming industry is a perfect example. Furthermore, issues that deal with the gaming industry in Macau are dealt with by the government in a very professional manner as consultancy firms, studies, committees and professional are involved in the formulation and implementation of policies related to gaming. On the other hand, the Singapore governments both under self rule and under the rule of the British have hindered the development of gaming as a mainstream industry either by imposing tougher rules on gamers or banning it.
But the recent legalisation on casinos is seen at a step towards recognition of the industry as a potential contributor to the development of Singapore’s economy by promoting tourism. Furthermore, a difference comes in the way the two countries go about policy making, in Macau’s case there is professionalism but in Singapore’s case professionalism is lacking and the decision to lift the casino ban is more like an executive directive made without any consideration or consultation with professionals or citizens.
Both boast of a long history of gaming though the nature of gaming in the two countries is varied. In Macao gaming was done in various forms as at the 18th century, in the Singapore’s gaming at the same time was limited to only animal fights, therefore it is clear that Macau’s gaming arena was way developed relative to Singapore’s as at the beginning of the 20th century. Furthermore, Macau’s gaming history is far richer than Singapore as it involves a number of both internal and external occurrences that affected the development of the gaming industry, on the contrary the gaming industry in Singapore has long been an internal affair though the new measures are aimed at the involvement of the external environment.
Culture determines to a great extent the success of gaming industry in both cases. Macau was inhabited by immigrants from mainland China, the home of gaming. Therefore, the culture created in Macau is gaming friendly, furthermore in the 16th century gaming was left for the common man and therefore the roots are well developed and gaming is integrated in their culture. On the contrary, the conservative nature of the Singapore community is a major hindrance to the development of the gaming industry, the culture views gaming as a social vice and has thus hindered its development over the years.
Comparison data.
Development and Problems
Gaming is a form of culture and is therefore visible to the gamers. A culture that supports gaming like the one seen in Macau will ensure it grows to be the greatest gaming destination in the world. On the other hand, the negative attitude shown by the people of Singapore towards gaming culture will surely hinder its development irrespective of the government’s view. Furthermore, the policy development process is very deterministic in the growth of the gaming industry.
The Macau’s formulation process is fully professionalised and involves lots of research on the right strategic directions to be implemented and the legal framework governing the gaming industry is well developed. Contrary to Macau, the Singapore policy formulation lacks in professionalism and is rather unilateral. Moreover, the reason behind the legalisation of gaming is to promote tourism rather than to develop gaming as an industry, this is different in Macau where gaming is an industry in itself.
Given these facts, gaming in Macau will develop rapid growth in the next couple of years, the only problem that this development may face is the infrastructure base to support the high development. The Singapore gaming sector will face many problems due to its conflict with the culture and the government priority that views it as a measure towards the development of tourism. The development will be very slow and the competition from Thailand may also cause a big problem to its establishment.
Conclusion
Gaming is a very profitable venture and may contribute immensely to a country’s gross domestic product. The contribution may be as a direct revenue earner or as an indirect earner through other industries like the construction, tourism and hotel. Just like in any other situation than involves harnessing an opportunity, the history, culture and strategic plan all come into play in determination of the feasibility and success in the exploitation of the opportunity. Therefore, all parties that consider the development of gaming as a venture or industry must look keenly into these areas.
Bibliography
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Clelow, C. & Samagalki, A. (1997) Hong Kong & Macau: A Survival Kit, Lonely Planet.
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Marshall Cavendish Corporation (2007) World and Peoples: East & South Asia, London, Marshall Cavendish.
Radel, R. S. (2004) Common Gaming Ordinance, Singapore, Kelly & Walsh.
Smith, K. (2000) Singapore: Laws & Institutions, London, Cox & Baylis.
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