Moving to

I'm moving to Mostly.

I plan to use that site as a "self-marketing website" of sorts and to manage content in a way that I would otherwise not be able to do on blogger alone.

This blog will stay, ostensibly for more provisional ideas prior to refinement. I'll be gradually moving content (I still like) over to the other website. =)

Sunday, July 15, 2012

On Casino Entry: Lessons from Credit Card Approval Requirements

Earlier this month, Minister of State for Finance Josephine Teo revealed to Parliament that casino entry levy fees collected by the government in the past 18 months reached S$288 million. (A daily entry levy of S$100 and annual entry levy of S$2,000 is imposed on Singaporeans and permanent residents seeking to enter the casinos.)

It strikes me that while the casinos were advertised to be an additional draw in our tourism portfolio, with an "effective" barrier to locals frittering away their hard-earned (and low by international standards) salaries in the form of levies, they have nevertheless "been very effective at drawing locals".

I believe that this is undesirable and it is important that more effective barriers to entry be put up to prevent gambling-led destitution. One way to do this is hinted at by another, albeit more pleasant, route to ruinous debt: the credit card.

Under the Monetary Authority of Singapore (MAS) guidelines, to be eligible to apply for a credit card, one needs to be (i) at least 21 years old and (ii) earn an annual declared income of at least S$30,000 for citizens and S$45,000 for PRs. In addition to the minimum requirements set by the MAS, individual banks may impose additional requirements for card holding.

This regulation makes it more likely that card holders have the capacity to afford the easy spending that credit cards facilitate. Furthermore, ones monthly salary also goes into determining one's credit limit. Similar income based requirements would be more suitable than a flat S$100 daily levy.

Singapore Citizens and PRs who wish to gamble should first become "members" of the casino, with membership being granted on the basis of a minimum annual salary which should be checked on an annual basis (e.g. via CPF contributions). Furthermore, a "member's" annual salary should determine a monthly chip exchange limit.

This might let those between jobs slip through the cracks somewhat, but the regular CPF contribution checks should close the gap quickly enough.

At this point, I have no good answer for how to handle retirees. It may be too intrusive to look at entire CPF balances to determine chip exchange limits. However, annuity sizes might provide a guide for doing this.

I think we have to be smarter about dealing with the gambling problem. What we have is grossly insufficient.


Anonymous said...

This is indeed a good suggestion,appreciate if you can feedback to Ms J.Tan.

7-8 said...

This method does not really work by itself, and it is better to use it in conjunction with the entry fee levy.

Even if a person is earning $60K a year that fact alone is not going to stop him from becoming a gambling addict. In fact, for the middle class people, they might get complacent and say, "I earn this much money every year, surely I can afford it." People running up debts of hundreds of thousand dollars is not uncommon.

There are unconfirmed rumours that the entry fee levy is bypassed because the casino compensates for that by giving a Singaporean punter a $200 "credit" when they check in, thus effectively cancelling out the entry levy. Given that you cannot check cash transactions it is hard to police this.