I'm sure not many of you will feel sorry for the rich feller who lost $26M at the casino recently. The media reported that the married high roller who turned up at RWS with a girlfriend lost this massive amount over a period of 3 days. There are several things to learn from the story. People can lose control at the casino and gamble away their lifesavings. You cannot count on the casino to limit the social costs of its existence because a large part of its profits comes from problem gamblers. For every Henry Quek (the chap who lost $26M), there are hundreds, if not thousands, of ordinary Joes who lost more than they can affort and whose families have to suffer the effects of those losses.
I read a brokerage report on Genting early this year . The analyst rated the stock a sell because he believed investors are overly optimistic about Genting prospects and his back of the envelope calculation showed little chance of Genting breaking even this year. Boy was he wrong! Genting reported blockbuster profits of $396M in the latest quarter and revenues of $860M[Link]. If this continues Genting will report profits in excess of $1B for the whole year. This is performance far exceeded the highest expectations of analysts that cover the company. The govt will be collecting plenty of corporate tax from Genting and its shareholders are cheering the success of the company. But who pays the price?
The high profits of Genting means that its casino is filled everyday by gamblers. It is not known how many are Singaporeans, like Henry Quek and how many are foreigners. There is plenty of harm to go around. I don't think you should be too happy even if some of the profits come from foreigners. It is not good to have foreign workers who are supposed to be here to earn a living and better their lives back home to lose money at the casino. We have seen quite a few crimes committed by people who lost money at the casino.
We were told the main benefit the casino is to create jobs for Singaporeans (not tax revenue for the govt?) but if you visit the casino, many of the jobs are taken up by foreigners and this whole thing about job creation may be a farce because Singapore has to import foreigners to fill many of the jobs available. The real problem is with structural unemployment among older workers which is linked to the large number of younger workers employers are able to import instead of employing older workers.
You notice how quiet the Singapore’s National Council On Problem Gambling (NCPG) is in recent months. When was the last time you saw an anti-gambling ad? Given what is going on at the casinos, the NCPG should be doing its job to tell Singaporeans about the harm of casino gambling and run an anti-casino gambling campaign. The NCPG has a paltry annual budget of $2.5M (vs Genting's $396M quarterly profits) - this money is probably not even enough to buy the free drinks and snacks the RWS gives out at its casino to attract gamblers. This govt is not serious about solving the problem of gambling. The NCPG was formed in 2005 only to reduce the resistance towards having casinos.... looking at Genting's huge revenue and profits, do you think things are under control?