ONLINE GAMING

• Citation: (2011) 23 SAcLJ 74
• Published date: 01 December 2011
• Date: 01 December 2011
• Author: Hannah Yee Fen LIM BSc, LLB, LLM (Hons) (University of Sydney); Visiting Professor of Law, Faculty of Law, National University of Singapore; Principal Consultant, Galexia, Sydney, Australia.

The State of Play in Singapore

This article will examine the legality of online gambling in Singapore, whether operated out of or merely conducted within Singapore. It will include comparative analyses where relevant. The four principal statutes in Singapore that govern gaming are the Common Gaming Houses Act (Cap 49, 1985 Rev Ed) (“CGHA”), the Betting Act (Cap 21, 1985 Rev Ed), the Private Lotteries Act (Cap 250, 1985 Rev Ed) and the Betting and Sweepstakes Duties Act (Cap 22, 1999 Rev Ed). This article will focus on the CGHA and the Betting Act as they are the two most relevant pieces of legislation to online gambling. Each of these statutes deal with a different aspect of gambling and a particular gambling activity may fall under more than one statute. The various forms of gambling and gaming will be expounded and the statutes will be applied to each type of gambling, together with an analysis of the equivalent online gambling activity. It will be apparent from the arguments presented below that perhaps the CGHA and the Betting Act can be meaningfully combined for the sake of brevity and clarity.

I. Introduction

1 This article will examine the legality of online gambling in Singapore, whether operated out of or merely conducted within Singapore. It will include comparative analyses where relevant. The four principal statutes in Singapore that govern gaming are the Common

Gaming Houses Act1 (“CGHA”), the Betting Act,2 the Private Lotteries Act3 and the Betting and Sweepstakes Duties Act.4 This article will focus on the CGHA and the Betting Act as they are the two most relevant pieces of legislation to online gambling. Each of these statutes deal with a different aspect of gambling and a particular gambling activity may fall under more than one statute. The various forms of gambling and gaming will be expounded and the statutes will be applied to each type of gambling, together with an analysis of the equivalent online gambling activity. It will be apparent from the arguments presented below that perhaps the CGHA and the Betting Act can be meaningfully combined for the sake of brevity and clarity.

2 The term “gaming” refers to a wide range of activities. Section 2 of the CGHA5 defines “gaming” with its grammatical variations and cognate expressions as “the playing of any game of chance or of mixed chance and skill for money or money‘s worth”. The focus is thus on what is a game of chance or of mixed chance and skill. Traditionally, games of chance or of mixed chance and skill have referred to lotteries, wagers and casino-style games such as roulette. Many jurisdictions have laws that ban or regulate some or all of these activities in their traditional form in the physical world context. Each of these traditional games of chance or of mixed chance and skill will be discussed in the following sections to ascertain if each falls within the definition of “gaming” and hence within the statutes in Singapore. It will be agued that the laws in Singapore currently do cover various types of online gambling although it does so in a haphazard and incongruent way. The legal landscape would be much clearer if the Betting Act6 and the CGHA are combined and streamlined.

II. Lotteries

3 The CGHA7 in s 2 defines “lottery” to include “any game, method, device, scheme or competition whereby money or money‘s worth is distributed or allotted in any manner depending upon or to be determined by chance or lot, whether the same is held, drawn, exercised or managed within or without Singapore”. The emphasis here again is on a game of chance or mixed chance for money or money‘s worth.

A. Traditional lotteries

4 Lotteries usually involve money being given up in exchange for an opportunity to win a prize through typically the method of being drawn by chance; ie, it is akin to drawing lots for a prize. The prize can be a monetary amount or anything else such as a car or house. The most common types of lotteries are those operated by governments where one buys a ticket at a set price such as in the Singapore Sweep.8 Each ticket is numbered and if the number of the ticket is drawn, a prize is awarded. These are popular partly due to their simplicity. Moreover, government-run lotteries in particular attract customer trust in operations since the governmental backing signals an honest, reliable operation.9

5 A popular type of these lotteries is charity lotteries. In Australia, one of the oldest charity lotteries is the BoysTown lotteries, the proceeds of which goes towards BoysTown‘s services which provide care and support for disadvantaged young Australians and their families. BoysTown runs 15 lotteries each year - ten House Lotteries and five Prestige Car Lotteries with the prizes being luxury homes and luxury cars respectively; which although are not money, they are certainly money‘s worth. Each ticket costs $15 and there are generally only three winners in each draw.10 BoysTown lotteries are trusted as they have been in operation since 1961.11 Charity raffles are required to be operated pursuant to rules laid down by governmental authorities.

6 Playing most forms of lottery would come within the definition of gaming under the CGHA12 even though the prize may be cars and homes and not monetary because s 2 of the CGHA includes “for money‘s worth” in the definition. And all lottery winners are determined through chance and the tickets are drawn by chance. Hence, there is no question that traditional lotteries come within the purview of the CGHA.

B. Selecting numbers

7 Selecting numbers is also a form of lottery. It typically involves players choosing, say, six numbers out of 45, and if all the selected

numbers are drawn, the player wins first prize. In some countries such as Australia, the drawings are televised to bolster confidence in the integrity of the operation. To win a lesser prize, some lesser number of the drawn numbers must be chosen.13 As the winning numbers are achieved through the process of a draw, it is again a game of chance.

8 The 4D game in Singapore is a combination of the traditional lottery and selecting numbers style of play. Players choose the four-digit number they desire and if the number is drawn, they win a prize. Again there is no skill involved as it is pure chance. Hence, games involving selecting numbers come within the purview of the CGHA.14

C. Scratchers

9 Newer forms of lotteries that have come onto the market in recent years are the scratchers. These are played by players scratching off a latex covering to reveal whether the player has won. Typically, they uncover hidden symbols and if there are three of the same kind of symbols revealed, then the player has won a prize.15 They are similar in play style to the older forms of paper instant tickets such as the pull-tab and the punchboard. Pull-tabs are still used in bingo operations in some countries, and the concept is similar to scratchers, in that players pull off a piece of paper rather than scratch off the latex covering. These would be games of chance as it is already determined when the tickets are printed whether or not a particular ticket is a winning ticket. Hence, scratchers also come within the purview of the CGHA.16

D. Slot machines

10 Slot machines can in some ways be considered a variant of lotteries, scratchers, pull-tabs, and punchboards. When a player buys a scratcher, it consists of data stored on the piece of paper albeit hidden by latex. Similarly, when a player puts a coin or credit into a slot machine, data is already stored in the onboard computer of the slot machine. And when one “spins” the slot machine to get the result, the process is the same as scratching off the latex. The major difference between the slot machine and the other forms of lotteries is that the odds on the slot machines take more effort to control and supervise because of the sheer number of machines to check and the ease in which the odds can be changed with just a small change in one line of the programming code.

It is for this reason that many would not consider them as lotteries and would class them as casino-style games which will be considered below. But they are nevertheless games of chance for money which would be covered by the CGHA.17

E. Legal position of online sale of lotteries - Comparative perspective

11 In many jurisdictions, lotteries are often made expressly legal by statutes and regulations although the usual prohibitions on minors purchasing lotteries apply. For example, in the US, 4218 of the 50 states and the District of Columbia allow lotteries.19 In some states, archaic laws make it a crime to possess an out-of-state lottery ticket although these laws are rarely enforced.20 Some countries and states like New York have laws that declare cross-border lotteries illegal. So when an out-ofstate internet lottery operator accepts lottery purchases from customers from a state with prohibitions against selling lottery tickets, it would likely be violating the local law.21

12 In some jurisdictions, regulations specifically allow off-line lottery tickets to be sold online such as the BoysTown lotteries in Australia,22 while in other jurisdictions such as California, charities are expressly prohibited from selling raffle tickets online.

13 Some online lottery operations specifically limit their sales to local residents whereas others deliberately cast the net wide. For example, the Lottery of Finland, Veikkaus Oy,23 attempts to restrict its players to locals by requiring players to have a Finnish bank account and the website is entirely in Finnish with the exception of one page24 entitled “Finnish lottery for Finns” which merely explains the background and rationale for the gambling setup in Finland.

14 At the other end of the spectrum, the website allows players to play the major official national and state lotteries from around the world. A player can choose from the Australian Lotto, to...