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Singapore Slings: Island Nation Takes a Shot at Remote Gaming Regulations

By David B. Hoppe, Managing Partner, Gamma Law, San Francisco, US

The Singapore government recently enacted the Gambling Control Act 2022 (GCA22) and the Gambling Regulatory Authority of Singapore Act 2022 (GRAS22) to add more consumer protections and include new games and products, especially those conducted online.

Background

 

Taking effect on August 1, 2022, the Acts aim to accomplish three primary goals:

  1. Ensure gambling trends and technology-based products are included in the country’s laws and regulations.

GCA22 updated the definitions of key terms used in existing legislation, changing language deemed too restrictive and exclusive of emerging gambling games, formats, and activities. For example, the definition of “betting” under the now-repealed Betting Act of 1960 addressed only horse racing and other sporting events. There was no way lawmakers in 1960 could have anticipated the rise of online bookmakers, fantasy sports, e-sports, and other modern gaming platforms.

  1. Maintain consistency in how regulators treat different gambling games and products.

Of interest to emerging technology companies, the new law covers electronic games of chance and platforms that offer gambling services online.

  1. Formalize a licensing regimen to replace disparate gambling permits and exemption policies.

Under the old regime, private establishments were not required to apply for a license in order to allow gambling on their premises. They were able to allow gambling as long as they met certain stipulated conditions. Private establishments are now required to apply for a license and undergo a screening process in order to assess their eligibility to hold a gambling operator license in Singapore.

Implications for US Regulation

The recent update to the Singapore gambling law is one of the most comprehensive in modern times.

Regulators in the US, Japan, China, and other major gaming/gambling centers may use the Singapore blueprint as a template for re-evaluating their own regulations.

The regulatory framework for online gambling in the US varies from state to state. West Virginia, Utah, Hawaii, Indiana, Tennessee, Alaska, and others, for example, prohibit online gambling.

On the other hand, there are certain states where gambling is legal but only with a license or under regulation: Nevada, Colorado, Delaware, Michigan, and others.

Interestingly, online sports betting has been legalized in all 50 states. Before that, sports betting was legal only in Nevada. Nonetheless, very few states have legalized online horse race betting.

The following section delves into the key lessons regulators in the US and Japan might learn from the Singapore GCA22.

 

Definition of Gambling

US states differ slightly on what constitutes gambling activities and which ones are legal within their jurisdictions.

One of the most common forms of legal gambling in the United States is single-state and multi-state lottery games. Nevada, however, forbids lotteries and many online fantasy sports betting platforms, likely in an effort to protect the state’s casinos from outside competition. Like Singapore before the recent update, many states’ definitions of gambling were established before the rise of online platforms, blockchain gaming, and other technological developments.

States might look for guidance from the GCA22 in updating their definitions to expand their coverage and inclusion of online activities and digital communications that facilitate new forms of wagering.

Specifically, states may seek to license institutions that operate esports tournaments and establish ground rules for betting on these competitions. GCA22 widened its definition of "betting" to include “the outcome of a race, competition, sporting event or other event or process.” This adoption of a technology-neutral stance ensured that the definition covered both existing and emerging gambling products. Perhaps some states in the US would benefit by adopting a technologically neutral definition of gambling.

Unlike the US, the Japan criminal code does not define gambling. Nonetheless, the general rule is that gambling activities operated by the government are acceptable, whilst any gambling operation by a private entity is illegal. This lack of definition of gambling leads to a lot of ambiguity. Hence, even Japan might draw inspiration from the Singapore GCA22 and enact a forward-looking definition of gambling.

Licensing

GCA22 has introduced certain licensing regimes pertaining to gambling operators.

Gambling establishments now must apply for licenses and undergo screening of key personnel so regulators can assess their suitability to hold gambling operator licenses. Gambling operators in the US are subject to state laws and may have to obtain state licensure. However, further to a recent ruling by the Department of Justice (DOJ), online betting or online gambling in the US is governed by the Wire Act of 1961. This means that states can only offer their services to their residents. Wagering transactions may not cross state or national borders.

In light of the DOJ latest ruling on online betting and online gambling, it is likely that regulators in the US will revisit this issue and introduce a licensing regime similar to that introduced by Singapore. It is proposed that US-based regulators pattern their licensing regime on Singapore’s and consolidate various gambling products and entities (such as slot machines in recreational clubs, Singapore pools’ products, and gambling at private establishments) under a single umbrella.

At the moment, gambling regulation in the US remains quite fragmented.   

Conclusion

The gambling industry in the US is very robust. It is extremely important for US regulators to enact laws that address current and future developments, as the US gambling industry is keen on pursuing innovative and engaging ways of interacting with consumers and promoting its brand through various media channels.

The Singapore GCA22 is a welcome development, as there has been a surge in esports, gambling, and the like in the US. Before advocating for any reforms in US gambling law, it is best to consult with a law firm specializing in esports, online gambling, and emerging technologies, as they would be able to guide you on the types of reforms required.

The author may be contacted by e-mail at ‘This email address is being protected from spambots. You need JavaScript enabled to view it.


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