Introduction

As part of its ongoing efforts to ensure that Singapore's laws and regulations remain effective in the face of evolving gambling products and business models, the Ministry of Home Affairs (MHA) announced on 12 July 2021 that it is proposing amendments to gambling laws (expected to come into force later this year 2021).

Explaining the rationale for the proposed amendments, the MHA identified two trends in the gambling landscape - first, advancements in technology with the Internet and mobile computing making gambling products more accessible; second, the blurring of the boundaries between gambling and gaming, with business models adapting to suit changing customer preferences by introducing gambling elements in products that are traditionally not perceived as gambling.

The proposed amendments are in the following areas:

1. Definition of gambling
2. Social gambling
3. Games with gambling elements
4. Penalties across gambling legislation

This article set out the key highlights of the proposed amendments.

Definition of Gambling

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. The MHA proposes to amend the definition of gambling to make it technology-neutral, so that it can cover existing and emerging gambling products. This broader definition of gambling may, however, cover products that MHA has no intention of treating as gambling products (e.g. financial products already regulated by Monetary Authority of Singapore). Such products will therefore be carved out from the definition of gambling. This approach has also been adopted in other jurisdictions, such as the United Kingdom, Australia, Switzerland, and Denmark.

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”.

MHA also considered permitting online social gambling among families and friends, including gambling over the Internet, but will propose not to. Currently, the Remote Gambling Act prohibits online social gambling. The rationale for maintaining this prohibition: "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.

Games with Gambling Elements

In view of the blurring boundaries between gambling and gaming are blurring, the MHA proposes the following measures to maintain the balance between allowing entertainment and safeguarding against gambling inducement, for each of these products:

(A) Mystery Boxes.

Mystery boxes are similar to lotteries, particularly mystery boxes that promise high-value prizes that can easily be traded for cash, such as smart phones and game consoles. As the value of prizes increase, their potential to induce gambling behavior increases.

(B) Arcade Games and Claw Machines.

Arcades have started to offer high-value prizes such as smart phones to entice patrons. This trend, coupled with the fact that arcade games and claw machines can have elements of chance, is of concern as it brings the operation of these machines close to gambling.

MHA proposes to introduce a prize cap of S$100 for mystery boxes, arcade games and claw machines.

(C) Online Games of Chance with Virtual Prizes.

It is increasingly common for online and video games to incorporate in-game micro transactions (e.g. loot boxes) that can resemble gambling. Currently, our laws and regulations do 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 (i.e. money, or items that can be exchanged for money). The MHA proposes the following:

1. Firstly to update laws and regulations to address virtual items that can be transferred out of the game, and potentially be exchanged for money or money’s worth on a third-party hosted exchange. Conditions will be introduced 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.
2. Secondly in-game monetisation facilities for free-to-play games (i.e. players do not have to pay to play or receive virtual prizes) are proposed to be allowed, subject to conditions similar to those imposed on currently-exempted business promotion lucky draws (which will remain exempted in the new legislation).

Penalties across Gambling Legislation

The MHA propose to rationalise penalties across various gambling legislation. The Remote Gambling Act 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. This penalty structure which differentiates between punters, agents, and operators is proposed to be applied across all forms of gambling activity, so as to ensure consistency between online and physical gambling activities.

The MHA also proposes to raise penalties for repeat offenders who facilitate or operate illegal gambling services, to increase deterrence.

Public feedback

The public are invited to submit feedback to the MHA on the proposed amendments by 10 August 2022 via email at MHA_Gambling_Feedback@mha.gov.sg.