|Qn 1||?||mkt failure||dd n ss||mkt failure||dd n ss||mkt failure||dd n ss|
|Qn 2||?||dd n ss||mkt failure||dd n ss||mkt structure||mkt structure||mkt structure|
|Qn 3||?||mkt structure||mkt structure||mkt structure||mkt failure||dd n ss||mkt failure|
|DD n SS||?||property prices||cars||ageing population||sugar||crude oil||modern technology|
|MKT FAILURE||?||Free mkt. Other sources of mkt failure.||Mkt failure in education. Assess reduce subsidy.||Free mkt. Assess price mechanism vs intervention.||Public Goods. Museum in UK and Japan.||Mkt dominance. Evaluate Singapore govt intervention.||Imperfect information immobility. Singapore policies.|
|MKT STRUCTURE||?||Shutdown condition. Recession and firms||MC and Oli. Effect of online shopping.||MC and Oli. Recession and firms||MC and Oli. Which is Singapore?||Popular Band. Price discrimination.||Barriers to entry and price behaviour.|
Gambling – economic and social effects (Example Singapore)
From betting on the results of general elections, the Grand National, the number of corners that England win in one of their World Cup matches or the temperature in London on Christmas Day, we seem to have an almost insatiable desire for gambling on the outcomes of virtually every sporting, political, meteorological event.
Inevitably the rapid expansion of this industry raises important questions about the external costs and benefits of gambling. Some researchers point to the employment and tourism benefits that flow from the growth in demand for gambling services. There is also a fiscal dividend from this booming industry with a predicted $1bn per year of extra tax revenues flowing into the Treasury’s coffers.
But gambling also creates external costs. To mitigate the problem, Singapore sets up the NCPG.
The NCPG is a council comprising 16 members with expertise in psychiatry and psychology, social services, counselling, legal, rehabilitative as well as religious services. The Council’s first two-year term began on 31 August 2005, and it is now in its fifth term:
The Council’s main roles are:
- To provide advice and feedback to MSF on social concerns related to gambling, gambling problems and problem gambling.
- To support and implement effective programmes with regard to:
- Public education on problem gambling;
- Public communications and consultation of stakeholders with regard to gambling, gambling problems and problem gambling;
- Responsible gambling practices of legalised gambling operators;
- Research into problem gambling; and
- Prevention and treatment services for problem gamblers and their families.
- To execute casino exclusions in accordance with the Casino Control Act and within prevailing policies on casino social safeguards.
The usual approach to de-merit goods is to tax consumption, so that the private cost of consumption is increased and demand contracts.
Weighing the benefits and costs of Integrated Resorts in Singapore
Mr Chan Tai Pang, 66, is not your regular punter, but he hit the jackpot when the two Integrated Resorts (IRs) rolled into town.
Mr Chan’s company, Laundry Network, has been providing services to Resorts World Sentosa (RWS) and Marina Bay Sands (MBS) over the last two years or so after clinching the contracts in 2009, months before the IRs opened their doors the following year.
Within the first year, his company’s revenue from providing laundry services for RWS hit S$1 million. That figure has grown to S$6 million a year currently, forming almost a third of its S$16 million total revenue.
The company also made a combined S$9 million when it implemented a uniform management system – which sends and collects uniforms for staff – for both the IRs. Maintenance contracts with both, for this system, are worth a total of S$500,000.
Correspondingly, Mr Chan grew his staff by over 50 per cent, to more than 300 currently – with Singaporeans making up six in 10 of his workers. About 80 employees are dedicated to service RWS – its biggest client by far.
“It was a big turning point for this company as we really grew… It is only because of this demand that we could afford to implement the technology,” said Mr Chan. For instance, the company uses RFID (radio frequency identification) to track the laundry.
It is estimated that the IRs currently contribute about 1.5 per cent to 2 per cent of Singapore’s gross domestic product, a Ministry of Trade and Industry (MTI) spokesperson said. The presence of the IRs also supports more than 40,000 jobs throughout the economy, she added.
Experts TODAY spoke to said that the IRs’ economic performances have met all expectations in terms of tourism growth and job creation for Singaporeans.
But for all the economic benefits – tourist arrivals, new jobs, bumper contracts for Singapore companies, spin-off businesses – that the IRs have generated, the social costs their casino operations have brought remains a minefield for policy-makers.
And after a blistering performance in the initial years – helping their parent companies Genting Singapore (RWS) and Las Vegas Sands (MBS) to record profits – the IRs’ quarterly profits have shrunk in the past months.
With or without the current economic uncertainties, the IRs appear to have hit their peak in terms of generating economic benefits to Singapore, experts said.
Las Vegas-based economist Jonathan Galaviz of Galaviz & Co – which provides economic analysis and feasibility studies for clients in casino gaming – said: “We feel that the IRs in Singapore are near their maximum economic output capability – there is very little orange juice left to squeeze out of these oranges.”
He added: “Whether you look at GDP contribution, employment, or tourism inducement, all these measures point to the IRs as having already provided their maximum upward value to the economic dynamic of the country.”
An MTI spokesperson suggested as much when she noted that while the IRs have opened more attractions since their opening, “we also need to take into account the possibility of the IRs’ novelty effect wearing off”.
Since MBS and RWS came to town, Singapore companies have clinched the bulk of the contracts awarded by the IRs.
To date, RWS said it has awarded some 750 contracts worth a total of S$800 million to local firms, while MBS last year engaged Singapore-based companies for nine out of 10 of its contracts with a combined value of over S$350 million.
For just a single event at MBS, the orders for Sing See Soon Florist & Landscape can be as many as 456 table flowers, said its Vice-President of Sales and Marketing Gracelyn Lin.
The 90-year-old family-run business has dedicated one-eighth of its 55,000 sq ft office grounds in Punggol to store inventory for the IR. It has also hired eight more workers (five are Singaporeans) and adopted a computerised processing system after the company grew some 20 per cent in its first year servicing MBS’ contracts.
Transport company Sun Gee Travel runs MBS’ airport shuttle service for guests and also sends the IR’s overnight shift workers home.
Its director, Mr Ethan Neo, said the company has had to hire more than 20 new drivers after it was engaged by MBS. The company also bought 10 customised luxury buses specially for MBS’ airport shuttle service. The image of his workers has also improved, said Mr Neo, adding that MBS required his drivers to don smart uniforms and look after the needs of its guests.
Jobs for Singaporeans
Close to three-quarters of RWS’ 13,000 employees are Singaporeans and they take up eight in 10 of its PME positions. For MBS, Singaporeans make up more than three-fifths of the 9,400 full-time staff on its payroll.
Mr James Tan, 69, landed a job at the Pantages Theatre in RWS’ Universal Studios Singapore – after the former engineer was turned away by all 10 engineering firms he approached. He had retired for less than three months when he got bored and decided to return to the workforce.
Mr Tan said: “Normally if you are over 50 years old, people say don’t bother going for interviews… I was quite surprised that RWS hired me.”
For five days a week, nine-and-a-half hours each day, he makes sure the premises are clean and orderly and equipment is working. He also does a spot of ushering. Although his pay is not as high as he used to get at his previous job, Mr Tan said the increments he got from RWS have been “quite reasonable” and the bonus has also been “quite substantial”.
The unique experience some jobs in the IRs offer was what made Ms Angeline Foo, 33, leave the teaching profession after 13 years.
The education manager at MBS’ ArtScience Museum creates information material about exhibitions and customises tours and workshops to different groups of visitors, such as schoolchildren.
For instance, she had to design a workshop for students that ties the Titanic exhibition the IR had with the school’s “English Language Week” – Ms Foo centred it around the ship’s postal services.
She said: “It’s difficult to find the same combination of work I do here elsewhere. It’s really exciting and challenging because there’s more exposure – it’s not just physics and mathematics, there’s Andy Warhol and Titanic – and you also have to customise the experience for different visitors.”
Economic benefits vs social costs
A gaming analyst, who declined to be named due to company policy, said there is more room for the IRs to grow – if the government is inclined to let the IRs expand.
Pointing out that the MBS is at 99.8-per-cent hotel occupancy, he said: “If Singapore’s largest hotel is at the highest occupancy, then it means that if we want to grow the business and create more jobs, more hotel rooms and facilities built around the IRs can do it.”
The analyst added that opening up the junket market “a lot more” is another possible way to grow the pie.
Any discussion on the economic benefits generated by the IRs has to involve the social costs of the presence of the casinos. There is no doubt that Singapore has experienced “higher levels of social costs” because of the IRs, said Mr Galaviz.
“The question remains whether the economic benefits of the IRs outweigh these social costs – it is a question that probably can never be answered,” he added.
Member of Parliament Seah Kian Peng, who chairs the Government Parliamentary Committee for Social and Family Development, stressed that economic benefits are “just one part” of the equation. Adding that the social costs need to be continually monitored, he nevertheless said: “The non-casino business has been quite good and has created a lot of value. If it can create jobs, without the ills, then they should bring in more of that.”
As the IRs become a mainstay of the Singapore economy – reaping the rewards as they provide another leg for the slowing economy – Mr Galaviz said: “It will be important for the citizens of Singapore to put direct pressure on the executive management of the IRs to take social responsibility to the Singaporean community more seriously, rather than just pressuring the Government to do so on their behalf.”