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The Applicant Series #8: Online Gambling

The Applicant Series showcases works done by hopeful writers who have applied with inkmypapers over the years. The results and comments will be provided first, followed by the actual essay/report written by the applicant

Applicant’s Results: Failed

Title: Should the government allow STC and Pools to offer online betting?

Comments: As an essay, we would grade this piece a C-. We would like the applicant to focus the use of evidences from Singapore but most notably, some parts of the essay are also not very relevant to the question (not sure why the applicant include the history of gambling). It also didn’t score well as the academic writing style is not great, there are a few spelling and grammatical mistakes here and there and there is a lack of a clear introduction and conclusion.

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Online betting or internet gambling is described as “the business of placing, receiving or otherwise knowingly transmitting a bet or wager by any means which involves the use, at least in part, of the Internet, but does not include the performance of the customary activities of a financial transaction provider, or any interactive computer service or telecommunication service” (U. S. Government Publishing Office, 2012, p. 423).

In Singapore, the government released and initiated the “Remote Gambling Act” which prohibits all forms of remote gambling activity last February 2015. This Act has been created to control the extensive Internet usage and monitor the online activities of the people along with regulating these activities within the boundaries of socially accepted undertakings (“Resolving online betting dilemma, 2016).  However, a person is allowed to apply for a certificate of exemption which licenses the person to operate a Singapore-based remote gambling service, as stated in Section 26 of the Act. Section 26 is grounded by the following premises: (a) the service is provided in the course of carrying on a business in Singapore, (b) the central management and control of the service is in Singapore, or (c) any relevant Internet content is hosted in Singapore. Alongside with these grounds, the suitability of the director or any key officer, nature of the applicant (profit or non-profit entity), consistency of legal and regulatory compliance track record, and the ability of the applicant to provide efficient methods and processes to maintain gaming integrity are also highly deliberated by the Ministry of Home Affairs (MHA) for the approval of exemption (Yap, 2015).

Last July 8, 2015, two of the leading gambling providers in Singapore—Singapore Turf Club (STC) and Singapore Pools Private Limited (Pools), passed their application for exemption to MHA. Despite the previous reluctance of the Singapore government to approve the request, both STC and Pools are now further extending their services by promoting online betting (‘Resolving online betting dilemma”, 2016). 

Since the emergence of online betting, it has created significant increase in the economic status of different regions. Therefore, allowing the two Singapore monopolizing lottery operators—STC and Pools, is expected to produce positive results in the socio-economic status of the country. Moreover, as explained by Tan Chuan-Jin, Minister for Social and Family Development, sanctioning online betting will highly reduce the existence of unregulated and illegal online betting sites (Abdullah, 2016). Thus, legalization of online betting will not only progress the economy of Singapore, but it will also act as a mitigation scheme for illicit sites that are likely intended for exploitation.

The socio-economics effects of online betting has been extensively studied by different academics and discussed in several journals. According to Williams and Wood (n. d.), the advent of online betting started in the early 1990s. A ‘free trade zone’ was designed in 1994 by Caribbean wherein bets made on the phone were accepted on horse racing and sports. Between 1994 and 1995, gambling software called ‘Microgaming’ was developed. Finally, in 1995, CryptoLogic devised coded communication procedures that made safe online monetary transactions possible. Since then, casino gambling games began to propagate in different Internet sites. Moreover, Sports books like Intercops Casino promoted posting odds and placing bets online. In 1996, InterCasino emerged—the very first online casino that accepted real money wager. As the number of online betting sites continued to increase, revenues also increased correspondingly.  Hammer (cited in Williams and Wood, n. d.) explains that in 2000, an approximate revenue of $2.2 billion produced by Internet gambling was recorded as compared to $300 million spawned several years prior.

Casino City (cited in Williams and Wood, n. d.) states that over 2, 500 Internet gambling websites, owned by 465 different companies, were identified in October 2006. Moreover, it shows that 14 to 23 million people wager online. The actual number is further itemized to 28-35% (4 million), 49% (7 million), and 23% (3.3 million). The proportion represents the number of people who gamble online from United States, Asia-Pacific Region, and Europe respectively. Disparately, the growth of revenue generated by the Internet gambling market shows the figure drastically increased from $30 billion in 2010 to $41.4 billion in 2015 (“The Economic Effects of Online Gambling, 2015). Meanwhile, Canada’s revenue in 1990 of $526 million went up to $3.044 billion in 1995. Government revenues from lotteries, casinos, and VLTs increased to $1.3 billion by 1985 from less than $100 million in 1970. Gambling has also helped improve the passive economy of Indian reservations (Basham & White, 2002).

Significant benefits of online betting also incorporate opportunity for employment and taxes. Enough manpower is needed to run a multifaceted online betting website. Hence, need for manpower results to employment opportunities (“The Economic Effects of Online Gambling, 2015). Tan and Murphy (2014) cite that the 15% tax rate (£2 billion) on a remote gambling industry in UK will produce more or less £300 million per year.

With the incessant growing global market of online betting, taking into consideration its moral issues, several disputes have been elevated, regarding its legalization by the government (White & Basham, 2002). According to Ng (2016) of The Straits Times, some consumers believe that the legalization of online betting can aggravate the existing gambling addiction problems, especially among the youth. Addiction may also lead to debt and stealing issues.  Frauds and money laundering matters are also highly probable given the subject of anonymity (McFarland, Paget, Samani, n. d.). Referring to what 43-year-old bank manager Sendha Arumugam said on The Straits Times (cited in Ng, 2016), it is difficult to determine the official websites from fake ones.

However, prohibition of online betting will not resolve the problem of addiction and fraud. In fact, prohibition is presumed to lead to a black market of unfettered sites. This will imply greater danger to consumers because these sites are illicit and unregulated (Tan & Murphy, 2014). According to Minister Tan, as quoted by Abdullah (2016) in The Straits Times, “You can close down sites, but new sites will be set up, sometimes faster than you can close them down.” This has been supported by Tan and Murphy by implying that the government should concentrate more on regulating these sites and producing compliant rules rather than closing them down.

On the other note, Basham and White (2002) claim that the youth addiction to online betting is unsupported. Theoretically, money is required to be deposited before anyone can gamble—may it be an online or physical gambling activity. With the advancement of technology, online betting sites can be blocked and filtered to restrict access at home or in schools.  Furthermore, Abdullah (2016) suggests that addiction can be addressed by setting legal platforms. For instance, those who want to gamble must at least be 21 years old, there must be daily gambling limits, and placing bets on credit will not be allowed.

Lastly, based on the study of Basham and White (2002), for an online gambling site to be profitable, it will need a strong customer base–which is a result of licensed online gambling sites. According to ACIL (cited in Basham & White, 2002), inventing a false identity, together with supporting documents such as passport or driver license, to create and open an account under another person’s identity is difficult. McFarland et al (n. d.) also suggest that collaboration between the government and law-enforcement agencies can prevent and track illegal operators which can result to a safer online betting industry.

The existing problem today is not whether online betting should be allowed or prohibited; but rather how to alleviate the danger being imposed by the growing numbers of online betting sites. Legalizing STC and Pools will not only benefit Singapore in terms of revenues and economic growth, but will also devise a strategic opportunity for the government to regulate, control, and monitor all activities and transactions done by online betting websites. More importantly, legalizing STC and Pools can prevent the consumers from visiting unlicensed sites and therefore protecting them from any forms of fraud.

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