FAS saga: Fruit machines and the root of all evil

Apr 24, 2017 07.45PM |
 

by Bertha Henson

IT WAS bound to happen. With news of the millions Tiong Bahru FC amassed from its fruit machines, there have been calls to keep these one-armed bandits confined to the two casinos.

Yet, there are more than 100 clubs – whether it is an NTUC Club or an exclusive country club – which has such misleadingly-named gambling contraptions. And you don’t have to pay a $100 entrance fee to get into the premises.

What you have to do, though, is be a member of said club or society. That’s because the machines are supposed to be “private’’, under the Private Lotteries Act. Located in the basement of People’s Park Centre, with 29 machines, Tiong Bahru FC has more than 18,000 members, according to its latest annual returns filed with the Registry of Societies, as reported by The Straits Times (April 23).

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Given that Tiong Bahru FC reported S$36.8 million in total revenue in the last financial year, that works out to roughly S$1.27 million for each machine, or just over S$100,000 per machine each month. That’s plenty of arm muscle or finger pressing every day in the club.

A check through newspaper reports showed that clubs view them as a big attraction. There’s the National University of Singapore Society Clubhouses, Singapore Cricket Club, Changi Swimming Club, Changi Airport Recreation Club and Keppel Club. NTUC Club has several jackpot rooms all over Singapore, in places such as Ang Mo Kio, Bedok, Tanjong Pagar and Pasir Ris.

Of course, the G exacts its pound of flesh by imposing 9.5 per cent of annual gross turnover. This was put in place in 2011 because, gulp!, clubs said that an earlier proposed 12 per cent duty was too high now that casinos have surfaced in Singapore.

Casinos don’t seem to have affected the clubs’ takings equally. In fact, according to Business Times, the Automobile Association of Singapore had S$4.27 million in 2015, up from S$3.39 million the previous year. It has about the same number of machines as Tiong Bahru FC. So while revenue is growing, its takings are small beer compared to what the football club is raking in.

And this brings us to the question of just what those jackpot machines do for Singapore football – besides minting money. Tiong Bahru FC’s Bill Ng of the $500,000 donation fame, has always made no bones about his financial model for football.

He did the same to Hougang United FC and both clubs can afford to thumb their noses at any subsidy the Football Association of Singapore can funnel. Most S. League clubs operate on an annual budget of between $1.2 million and $1.5 million, and cannot do without the $800,000 annual subsidy.

“The public has to understand that we do not have any other source of revenue at this juncture. Hence the success of jackpot operations is critical,” he told TNP in October last year.

“This is the only artificial revenue that we can rely on at the moment. Any club with an eye towards financial self-sustainability must be prepared to look for alternative revenue streams as we may have to phase it out in the next five years.”

What the jackpot earnings have been spent on now appears to be the subject of police questioning. Besides monthly accounts and yearly audits, it isn’t clear what stipulations were put forth when the clubs obtained their licence to install fruit machines. At the very least, the club should be expected to use the revenue for its own purposes and in its own interest.

If so, it gives rise to the question of whether it is alright for $500,000 to be drawn from the Tiong Bahru FC account for the Asean Football Federation to build a Football Management System.

Mr Ng’s “jackpot” modus operandi is not without detractors who object to using gambling as a way to finance football. That was what Tampines Rovers chairman Krishna Ramachandra said last year about depending on an activity that has been known to wipe out the life savings of retirees.

There is, therefore, a moral issue here, and given the amounts amassed by Tiong Bahru FC, it would be safe to say that the punters aren’t there because they like football. In fact, its 18,000 members is significantly more than the 600 members of Geylang International FC, an S. League club. Another S. League club Balestier Khalsa’s 1,000-plus members also pales in comparison to that of Tiong Bahru FC.

But high-minded words aside, Mr Ramachandra is in a bit of a pickle now because he is on Mr Ng’s Game Changers slate as vice-president. In a TNP report today (Apr 24), he focused on the use of gaming revenue rather than the act of gaming. “I think the authorities have always had very clear and extensive rules and regulations on the jackpot operations.”

“I do not see that as an issue. Ultimately, the clubs need to ensure that they utilise the profits in a responsible manner and one that furthers the mandate of that club, be it a social or recreational or sports club.”

And no, he doesn’t want any rules on fruit machines tightened.

The FAS saga has opened a whole can of worms – both legal and moral.

 

Featured image by Sean Chong.

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