Casino In Singapore
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INTRODUCTION
Singapore government reserved its decades-old ban on casino gambling last year in order to attract a greater share of Asian tourism market. They had awarded two licenses- one to operate a casino in Marina Bay and another on the resort island of Sentosa.
As an economic center of Southeast Asia, Singapore plays an essential role in financial market and other related industries. Although Singapore has advantages in its safe environment and highly-developed financial systems and other fields, there are still some undeniable drawbacks because of its limited size of population as well as resources. We will focus on discussing the current situation where Singapore is in and how can Singapore overcome the barriers and make full use of this opportunity to maximum the profit.
STRENGTH
The reason why Singapore government engages to run casinos is that they believe that Singapore owns some advantages compared to other countries. The following are some of the advantages of Singapore to operate casinos well.
First of all, we have noticed that the strong external demand lifted economic growth to 6.4% in 2005(Asia Development outlook 2006). Domestic demand also showed signs of recovery, especially consumption, which was bolstered by strengthening employment and a recovering property market, after the recession during the SARS. And the growth is expected to continue its rapid race in 2006.
Manufacturing expanded by 9.3% in 2005, led by the transport engineering, biomedical manufacturing, and electronics sub sectors. The services sector grew by 5.8% in 2005, underpinned by the strong performance of wholesale and retail trade and of financial services.
Moreover, Singapore is undergoing significant structural adjustment against globalization and increased competition from other regional economies. Singapore government has undertaken a range of structural reforms to diversify the economy and to enhance its competitiveness. Obviously, with the stable growth of GDP, Singapore can perform well in future.
Singapore has quite advanced infrastructure which is continuously-being upgraded by the government in order to complete the transformation of Singapore from a low-tech society to a high-tech society. Similarly, casino cannot run without skillful dealers. SingaporeЎЇs strength is its hardworking, adaptable, goal-oriented, and resilient population. The labor force in Singapore is literate with high computer skills. In addition, the 1994 World Competitiveness Report ranked Singapore number one for its computer literacy rate. Also with the wide-spread use of IT in work place or schools, it is easier to training and to form good distribution channels.
WEAKNESS
Other than the advantages of Singapore, there are ineluctable weaknesses caused by the limited population size as well as the resources.
Any successful casino should attract large numbers of people. Gamblers come to the local casinos by air, car, railroad, etc. in many cases; the profitability of some casinos is restricted because of the lack of the sufficient highways. Besides that, parking issue is another traffic problem. The society must invest a large sum of money into the basic construction or upgrading of roads. Obviously it is difficult especially for Singapore to upgrade or broaden its roads since Singapore is already a mature society with developed public transportation system, any change of the road system will bring a lot of reconstruction or redesign of that and will be highly-cost.
Another problem arises because of the high labor cost in Singapore. The operation of casino needs a lot of employees. The payment of those employees in Singapore will be higher than the payment of workers in other developing countries, such as Malaysia. What is more, other cost includes the cost for recruiting employees, selecting. And since the casino work requires the educated managers who have working experience before, the training fees are necessary, too.
Casinos cause the increasing demand of the cityЎЇs infrastructure. Moreover, because of the large number of visitors, there will be a need for the basic services, such as security guards, police services, which may cause the shortage of those human resources.
OPPORTUNITY
Casinos not only provide entertainment places for people but also lead to economic growth and the improvement of social welfare at large.
There are several benefits from the casino industry. The three of them are the most significant which are tax revenues, employment, and income. Each of the benefits will be discussed in the following paragraphs.
Casino industry is an important economic engine to society for a number of reasons. Casino industry is a kind of labor intensive industry which requires a large number of employees. Besides the greater impact on reducing the unemployment rate, it also creates jobs directly and indirectly. According to the research of (Anderson 1996), it revealed that ÐŽofor every 1 million in revenues, the casino gaming industry creates 13 direct jobs.ÐŽ± What is more, this number only reflect the direct employment within the casino industry include individuals who actually work in the casinos but did not include the jobs created by other related industries, such as hotels, video services, computer software, or even soft drink industries.
Although the casino industry creates many jobs directly, local people are not the principal beneficiaries. The upper management positions which pay the most are typically filled by outsiders while the lower-pay jobs are filled with majority of local residents. Those jobs only provide the minimum wage to the workers. However, some of the earnings of the foreign top managers will inevitably be spent in the local areas. The consumption of the employees within the local society will incentive the production and eventually boosts the multiplier effect.
Tax, which is the most important revenue collected by a society within casinos, is another area where local residents benefit. Take the U.S.A. as an example; there are five states within the United States that do not charge a sales tax, none of them have casino gambling. The sales tax is one of the most rewarding taxes imposed by states. The greater the amount of money spent specifically within the casino industry, the more money