MHA proposing to amend gambling laws on social gambling, online games and claw machines

Poker cards in play. (Photo: CNA)

SINGAPORE: The Ministry of Home Affairs (MHA) is inviting the public to give feedback on proposed amendments to gambling laws that cover social gambling, online games and claw machines.

MHA is also proposing to raise penalties for repeat offenders who facilitate or operate illegal gambling services, and amend the definition of gambling so that it can cover emerging products.

MHA said on Monday (Jul 12) that it will amend the legislation later this year to ensure that Singapore's laws and regulations remain effective in the face of evolving gambling products and business models.

This comes after the ministry said in April last year that it will set up a new gambling regulator by 2021, as well as review and amend gambling legislation within the same period.

Gambling-related crimes remain low, MHA said, with the number of people arrested for illegal gambling activities remaining stable from 2011 to 2020.

Problem gambling also remains "under control", it said, pointing to surveys that show problem and pathological gambling rates have remained relatively stable, at around 1 per cent.

"To continue to enjoy these good outcomes, we need to make sure that our laws and regulations can address two trends in the gambling landscape," MHA said.

"First, advancements in technology. The Internet and mobile computing have made gambling products more accessible.

"Second, the boundaries between gambling and gaming have blurred. Business models have adapted to suit changing customer preferences by introducing gambling elements in products that are traditionally not perceived as gambling."

SOCIAL GAMBLING

MHA said it currently takes a practical approach towards gambling and will only regulate or prohibit when there is a risk to law and order or potential to cause social harm.

Hence, the ministry intends to explicitly permit physical social gambling among family and friends as it poses "low" law and order concerns.

"We will take strong enforcement action against syndicates which exploit this exemption to conduct illegal gambling activities," it said.

Currently, the Common Gaming Houses Act does not define private gambling, although it prohibits gambling in a common gaming house, which includes any place kept or used for gaming, habitual gaming and public lottery.

"We recognise that gambling amongst family and friends in homes is socially acceptable amongst many Singaporeans," MHA added.

MHA also considered permitting online social gambling among families and friends, including gambling over the Internet, but will propose not to.

"Explicit exemption of online social gambling will pose enforcement difficulties, as it will be difficult to establish if individuals are sufficiently and meaningfully acquainted with each other in the online context to qualify as social gambling," MHA stated.

Currently, the Remote Gambling Act prohibits online social gambling.

ONLINE GAMES WITH VIRTUAL PRIZES

For online games, MHA is focusing on those that allow virtual items to be transferred out, and potentially be exchanged for money or money’s worth on a third-party hosted exchange.

MHA is proposing to introduce conditions to ensure that transferable virtual items are retained in the context of gameplay and entertainment, as intended by game developers.

"Online games of chance that allow players to use virtual items from other games as a form of stake on casino games or match outcomes, such as skin-betting sites, will not be allowed," it said.

MHA is also proposing to allow in-game monetisation facilities for free-to-play games, where players do not have to pay to play or receive virtual prizes, subject to conditions similar to those imposed on currently exempted business promotion lucky draws.

The proposed changes come as it is increasingly common for online and video games to incorporate in-game micro-transactions like loot boxes that can resemble gambling, MHA said.

Currently, the law does not consider such games of chance with virtual prizes as gambling as long as there are no in-game monetisation facilities that allow players to exchange virtual prizes for real-world payouts.

MYSTERY BOXES, ARCADE GAMES AND CLAW MACHINES

MHA is proposing introducing a S$100 cap on the value of prizes for mystery boxes, arcade games and claw machines.

"This cap will be sufficient to address the inducement effect of high-value prizes, without increasing the regulatory burden on operators," it said.

This comes as mystery boxes, arcade games and claw machines have started to offer high-value prizes that can be easily traded for cash, like smartphones and game consoles.

This has the potential to induce gambling behaviour, especially as these machines could feature elements of chance, MHA said.

"We are careful not to over-regulate. We recognise that many Singaporeans consider mystery boxes, arcade games and claw machines as a form of entertainment," the ministry added.

"However, there remains a need for safeguards to ensure that these activities do not induce gambling behaviour and cause social problems."

GAMBLING PENALTIES

MHA is proposing to raise penalties for repeat offenders who facilitate or operate illegal gambling services to increase deterrence. The increased penalties will not apply to punters of illegal gambling services "for now", it said.

The Remote Gambling Act currently provides a three-tier penalty structure for illegal online gambling. The highest penalties are imposed on operators, as their culpability is greater than that of agents, followed by punters.

MHA is also proposing to apply this penalty structure across all forms of gambling activity, to ensure consistency between online and physical gambling activities.

DEFINITION OF GAMBLING

Finally, MHA is proposing to amend the definition of gambling to make it technology-neutral, so that it can cover existing and emerging gambling products.

Currently, the definition of gambling differs across different pieces of legislation, as these were enacted at different points of time and for different gambling products, MHA said.

"This broader definition of gambling may, however, cover products that MHA has no intention of treating as gambling products, for example, financial products already regulated by Monetary Authority of Singapore," it added.

"We will carve out these products from the definition of gambling."

The public can submit feedback by Aug 10 via email at MHA_Gambling_Feedback@mha.gov.sg.

This article was originally published on Channel NewsAsia, 12 July 2021. Its inclusion on this website is solely for education purposes.

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