The business of giving: Koh Choon Hui, ex-chairman, Singapore Pools

WHEN Singapore entered what would eventually become an eight-week Circuit Breaker period in April last year to curtail the spread of the coronavirus, almost the entire country - save for essential services - came to a standstill.

Among the throngs of companies hit hard in the pockets by the unprecedented lockdown was local gaming company Singapore Pools.

Gambling, of course, doesn't count as an essential service needed by the masses to survive a pandemic, although the thousands of punters out there who have made the 4D and Toto draws a fixture in their daily lives may beg to differ somewhat.

The Circuit Breaker kicked in on April 7, just a week into the start of Singapore Pools' new financial year. The lottery draws were scrapped. Every betting outlet was shuttered, and online accounts were suspended too.

Singapore Pools restarted online sports betting on June 15 - two weeks after the end of the Circuit Breaker - and horse wagering from June 17. Lottery draws and outlet operations restarted five days later.

The lockdown resulted in the organisation's coffers recording a loss of more than S$2 billion. For the rest of that first quarter, however, it still managed to rake in revenue of more than S$200 million. The total revenue for the 2020 financial year came up to S$9 billion.

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Balancing act

It's a conundrum that the top management of Singapore Pools often find themselves in.

On one hand, the more that people wager on the different products available (lottery, football, horse-racing and motor-racing), the greater the revenue collected and the more that the company has in surpluses to give back to the community.

And yet, on the other hand, it is more desirable if people gamble as little as possible or even not at all, even though this is just wishful thinking.

Koh Choon Hui, who was chairman of Singapore Pools for eight years until the end of June this year, can relate to this delicate balancing act all too well.

"Responsible gambling is at the centre of what we do. We are here to counter illegal gambling, and not to encourage gambling," the 81-year-old tells The Business Times in an interview over lunch at Singapore Pools' head office in Middle Road.

"So when people approach me and say they are my big customers, I always tell them, 'Please don't be'. And even if you are, please just be a small customer. I would say there's really no other business model out there that works like this. We actually don't want you to spend more and more."

Today, there is a growing amount of data about customers' spending and betting patterns, thanks largely to the introduction of legalised online betting in 2016. Previously, when betting was done anonymously and with physical betting slips, it was harder to capture meaningful statistics on how much a typical punter might spend in a given week or month.

For lottery customers these days - those who wager on 4-Digit and Toto, and the monthly Big Sweep - Mr Koh says the average bet size is only a few dollars each.

"I tell people, if you need to have a flutter, buy a S$3 Singapore Sweep ticket. If you're lucky, you win (the grand prize of) S$2.3 million. For Toto, buy (the Ordinary bet type for) S$1. Again, if you're lucky, you can win S$1 million in the first draw, or even S$8 million or more. But don't bet hundreds of dollars."

Keep it quiet

Over the course of his term, Mr Koh has also seen enough to know that Singapore Pools does have the power to positively change the lives of people.

With a Toto draw conducted every Monday and Thursday and at least a million dollars in prize money up for grabs each time, there could be two new millionaires created in the space of four days.

Many of the big lottery winners who come forward to claim their prizes - any amount above S$5,000 must be done in person at the headquarters - are heartlanders, says Mr Koh.

When they collect their cheques, they are offered a service called Care for Winners (for those who win S$100,000 and above), where they receive advice on how to manage their newfound wealth. In a private room, they receive financial planning tips from programme partner MoneySENSE.

"I think most people (we have spoken to) are receptive (of this service). There are some, of course, who will go and treat their friends and families (after they win). I remember one winner in Toa Payoh who won a couple of million dollars, and he went around and gave S$100 to every family in his block. So the entire block knew he struck Toto, even though we told him to keep it confidential," Mr Koh recalls.

"There are also foreign workers who win big, and they post about it on Facebook because they bet on behalf of their friends who were working in Singapore previously. They just want to show that it's true that you can really win a lottery in Singapore. Different people have their reasons in wanting to let others know about their windfall."

Responsible gaming

The story of Singapore Pools dates back more than five decades. It was established 53 years ago - in May 1968 - to curb illegal gambling in Singapore.

The decision was made by the government under then-prime minister Lee Kuan Yew to provide people with a legal avenue to bet on lotteries, as well as help to addressed the problem of triads and illegal gambling syndicates that were rampant at that time.

Singapore Pools is fully owned by the Tote Board, a statutory board under the Ministry of Finance. The various betting products and services are regulated by the Ministry of Home Affairs and the Ministry of Social and Family Development.

Sales channels include a network of branches and third-party retail agents located at supermarkets, provision shops, convenience stores and football clubs, as well as "live" sports entertainment venues.

In 2016, the government gave Singapore Pools the go-ahead to run online betting platforms, with a range of social safeguards in place such as allowing only those above 21 to open accounts and requiring customers to set daily limits on how much they want to wager.

There have been differing opinions on the move to legalise online gambling. For one, it meant that a person could place a bet 24 hours a day, seven days a week from the comfort of home with a touch of a button on his smartphone. It also opened the doors to "live" betting on football matches.

As Mr Koh explained, however, every dollar that Singapore Pools manages to earn is a dollar that it takes away from the illegal bookies. And, in his view, the best way to combat them is to be present online as well.

Beyond the different lottery and sports betting products on offer, he shares that Singapore Pools is not allowed to push out new games or sports to the public unless it has had the green light from the authorities.

"The type of products we can offer is very restricted by the regulations. It is very difficult for us to get the government to approve new products," he says.

Mr Koh lets on that, after football, the next most popular sport that people around the world wager on is professional basketball, specifically the games played in the National Basketball Association (NBA) in the US. There are, however, no plans for Singapore Pools to add this to its list of products.

"We are a responsible gaming company and we do our regular market surveys, where everything is evidence-based and data-informed," he says.

"Let's say there are a thousand people out there betting with illegal bookies on the NBA. If Singapore Pools were to offer NBA betting as well, and the number of people betting on NBA is (expected to be) 10,000, then we will not offer it. This is the kind of internal debate that we have all the time, and how seriously we take it. We are not here to convert new gamblers, even if there is money to be made."

Giving back

As an enterprise, Singapore Pools has a rather unique financial model. Firstly, a person's winnings - now matter how big or small - are not taxable as they are regarded as windfalls, and not income.

Instead, the operator pays the government a 30 per cent tax upfront, and this money is transferred to the Inland Revenue Authority of Singapore every two weeks. This works out to about S$2 billion, together with GST (goods and services tax), every year.

"The tax is taken at the time when a person places a bet, so if you win S$8 million from Toto, that entire sum is yours. When you bet a dollar with us, we already collect 30 cents in betting duty on behalf of the government," says Mr Koh.

Of the remaining 70 cents, two-thirds of that is paid out as prize money. The bulk of what's left goes to charitable causes, and Singapore Pools spends just 3 per cent of every dollar collected on operating expenditure.

"Most operators around the world, they take back about 20 per cent as running costs. For Singapore Pools, being a non-profit, we have kept ourselves lean on purpose so that we can maximise what we can give back. You cannot find another organisation whose operating expenses are only 3 per cent of revenue," says Mr Koh.

It may not ring a bell to many straight away, but Singapore Pools has helped fund the construction of many iconic buildings here over the decades. Through the proceeds of Singapore Sweep and Toto, a sum of S$14.5 million - a huge amount in those days - was raised between 1968 and 1976 to build the National Stadium in Kallang.

Other major projects funded by Singapore Pools include the Indoor Stadium in 1988 and the Esplanade - Theatres On The Bay in 1996. More recently, the company also contributed to the construction of Gardens By The Bay and the new National Stadium at the Sports Hub.

The Tote Board and Singapore Pools have also supported the President's Challenge since its inception in 2000 by funding most of its operating expenses so that every dollar raised goes to President's Challenge beneficiaries.

Last year, as Singapore battled the pandemic, Mr Koh led Singapore Pools' support of the Ministry of Finance's Solidarity Payment Cheque Encashment exercise at 16 community clubs, which helped over 4,500 Singaporeans.

With fundraising drying up due to safe-distancing measures, he turned to Singapore Pools' numerous community partners to chip in. Over S$1 million was disbursed to the needy, including a S$350,000 donation to Community Chest's The Courage Fund and S$200,000 to the Community Foundation of Singapore's Sayang Sayang Fund.

Summing up his time at Singapore Pools, he says he is most proud of the fact that there are competent and capable people in the organisation, "with their heads and hearts in the right places". "I would say we have a strong leadership team in place, where they are all of good character and integrity," he adds.

Lifelong volunteer

Mr Koh may be an octogenarian, but during our lively 90-minute interview, he doesn't show any signs that he is about to call it a day and enjoy his retirement years any time soon.

He's certainly had an eventful career that spans over half-a-century in both the charity and private sectors.

Mr Koh is widely credited for aligning the salary scales of social service workers with those in the civil service when he was acting honorary general secretary and vice-president of the National Council of Social Service in the 1990s, which laid the groundwork for the sector to recruit and retain employees.

He's also well known in the social service circle for being the chairman of Singapore Children's Society (SCS) - a role he has held for a remarkable 43 years and counting.

He joined that charity in 1976 when its former chairman asked for his help with fundraising. Two years later, Mr Koh was asked to take over as the new chairman and he agreed. Little did he know at that time he would still be at the helm to this very day.

At SCS, he revamped Flag Day to boost its donations, and oversaw programmes to help disadvantaged youths. He also ensured that the charity could maintain enough in its reserves to cover at least three years of operating expenses.

SCS had a headcount of about 20 people and an annual expenditure of around S$300,000 when he took over in 1978. Today, the number of employees has grown to 240 and the budget is S$24 million.

While some might find it quite unusual for a person to chair an organisation for 10 or 15 years, much less 43, Mr Koh says serving at a charity is quite different from, say, being an independent director of a corporation.

"At corporations, you get paid a director's fee and some even get stock options. But at a charity, you're a volunteer who is not paid. In fact, you even donate money to the charity in some cases, and give a lot of your time too. So I will say the motives and motivations are totally different," he points out.

Volunteering is clearly in his DNA, and his numerous awards over the years are a testament to that. The father-of-four is a recipient of the Outstanding Lifetime Volunteer Award, the top government award for volunteerism. He was also conferred the Distinguished Service Order award at last year's National Day Awards.

His love for giving back has rubbed off on the nearly 800 full-time employees at Singapore Pools too. Last year, its staff volunteerism rate stood at 70 per cent - nearly double the 37 per cent from the previous year, and higher than the national average of 39 per cent.

Mr Koh is also the founding chairman of iShine Cloud - a charity set up by Singapore Pools to provide other charities here with a suite of solutions via a secure cloud-based IT platform.

With many of Singapore's 2,000 charities struggling to adopt and use technology in their daily operations, either due to a lack of manpower or budget, that is where iShine Cloud has stepped in.

"The aim is to help these charities, especially the smaller ones, digitalise their operations and embrace tech, and become more open and transparent. This, in turn, frees up their time to deliver their services to the needy, instead of doing so much back-office work," he says.

Away from his charity work, Mr Koh remains active in the corporate world. He is chairman of Chubb Insurance Singapore, as well as Catalist-listed interactive technology firm Revez Corporation, biotech company Celligenics, and robotics solutions firm Otsaw Digital.

Mr Koh feels he is in a phase of his life where he wants to pass on his knowledge and experience to nurture the next generation of corporate leaders.

"It's a cliche, but the word 'retirement' is not in my vocabulary. So many people have said to me that I've spent so much time and giving so much to the charity sector and that it's time for me to take a break. But I believe there's no such thing as having done enough," he says.

"As long as one is healthy and strong, and can see meaning and purpose in what you do, you can make a difference to the lives of so many other people. You cannot buy this kind of satisfaction."

KOH CHOON HUI

Former chairman, Singapore Pools

Born in 1940

CAREER HIGHLIGHTS

1973-2012: Established Roche Singapore; last position Chairman and Managing Director

1973-1988: Managing Director, Roche Malaysia

Since 1978 : Chairman, Singapore Children's Society

1980-1992: President, Singapore Association of Pharmaceutical Industries; Council Member, International Federation of Pharmaceutical Manufacturers' Association

1992-2000: Acting Honorary General Secretary and Vice-President, National Council of Social Services

1992-2000: Vice-Chairman, Community Chest

2004-2009: Board member, Tote Board

2005-2021: Chairman, Life Imprisonment Review Board

2005-2021: Chairman, President's Pleasure Review Board

2011: Conferred Meritorious Service Medal at National Day Awards

2013-2021: Chairman, Singapore Pools

2014: Recipient of Outstanding Volunteer Award from Ministry of Social and Family Development

2017: Recipient of Outstanding Lifetime Volunteer Award

2020: Conferred Distinguished Service Order at National Day Awards

CURRENT APPOINTMENTS

Chairman, Chubb Insurance Singapore

Chairman, Revez Corporation

Chairman, Celligenics

Chairman, Otsaw DigitalChairman, i-Shine Cloud