Stricter rules for jackpot machines: S-League clubs steel themselves for leaner times ahead

Jackpot machines at Gombak United Football Club. Clubs typically spend between $1 million and $1.2 million a year, with $800,000 from Football Association of Singapore subsidies. The rest is raised through sponsorship and jackpot operations.
Jackpot machines at Gombak United Football Club. Clubs typically spend between $1 million and $1.2 million a year, with $800,000 from Football Association of Singapore subsidies. The rest is raised through sponsorship and jackpot operations.PHOTO: THE STRAITS TIMES

Resigned to jackpot curbs affecting earnings, they are hunting for sponsors, seeking to operate more efficiently

S-League clubs are bracing themselves for tougher times ahead.

Most of the local clubs with jackpot operations are expecting their earnings to drop following Thursday's news that the Ministry of Home Affairs is tightening regulations surrounding jackpot operations. The new rules will be rolled out over the next two years.

With some of the moves aimed at restricting access, the clubs are resigned to losing a chunk of their jackpot takings.

Clubs typically spend between $1 million and $1.2 million a year, with $800,000 from Football Association of Singapore (FAS) subsidies. The rest is raised through sponsorship and jackpot operations.

The FAS council will meet national sports agency Sport Singapore (SportSG) next month to find out how much funding it will receive for the 2018 S-League season.

SportSG is now the gatekeeper of the subsidies the FAS receives annually from the Tote Board, which are reportedly worth $25 million, and the quantum of funding that clubs will receive is uncertain thus far.

Geylang International's general manager Andrew Ang called the situation a double whammy.

STIFF COMPETITION FOR SPONSORSHIP

The short period of time doesn't help, and with so many clubs affected at one go and seeking other funding sources, the competition (for sponsorship support) will be stiff.

ASSOCIATE PROFESSOR ANG SWEE HOON of the National University of Singapore Business School.

BUDGETING CHALLENGE

We will have to take a more conservative approach when we plan the budget for next year. We need to take a hard look at where our revenues are coming from and then plan our budget, given these uncertainties we face in our funding.

MR ANDREW ANG, Geylang International's general manager.

 
 

He said: "It is a dark cloud that is hanging ahead of us on the horizon.

"We will have to take a more conservative approach when we plan the budget for next year. We need to take a hard look at where our revenues are coming from and then plan our budget, given these uncertainties we face in our funding.

"If our funds are cut, then ultimately, the players and staff would suffer."

He said that in recent years, the Bedok-based club has been trying to reduce its reliance on jackpot takings, of which 30 per cent, or about $300,000, goes towards player salaries.

He added that Geylang has already made moves to wean itself off jackpot operations.

"We have been engaging and finding more sponsors," he said. "Next year, we have got small companies to advertise with us in smaller amounts, from $3,000 to $5,000. So, we are looking to do more in this approach."

Balestier Khalsa chairman S. Thavaneson, who is also an FAS vice-president, agreed that the clubs will be forced to tighten their purse strings.

He said: "All of us will be affected by these new regulations. Incomes will drop, but we will have to work within this. We need to cut our budget and be more efficient in our club operations and manpower."

Associate Professor Ang Swee Hoon of the National University of Singapore Business School said the clubs have their work cut out for them.

She said: "The short period of time doesn't help and, with so many clubs affected at one go and seeking other funding sources, the competition (for sponsorship support) will be stiff."

She suggested clubs diversify their business streams and explore projects such as starting a cafe business, noting: "Depending on one source (of income) is not advisable. Having said that, the club should not diversify too much such that it puts a strain on its resources."

She also noted that "each club must find a distinctive advantage that it may have over other clubs", whether it be a proximity advantage if it is targeting people who live close to the club, or a project that the club is known for or specialises in, such as coaching services.

The expected budget cuts will also add to the worries of S-League players, who already face uncertainty in their careers because many are signed on either one- or two-year contracts.

While Home United's national winger Faris Ramli, 24, believes his club will manage the issue well, he noted: "Most of us players are concerned with what is going to happen next season and about our future."

Hougang United's Fabian Kwok, 28, who also works as a marketing executive at Komoco Motors, said the uncertainly over wages will hurt the image of the sport.

He said: "It will affect the people who want to play football as a career.

"Football in Singapore is not that attractive as a career, so if the wages are lower, then definitely it will turn more people away."

• Additional reporting by Nicholas De Silva

A version of this article appeared in the print edition of The Straits Times on July 22, 2017, with the headline 'S-League clubs steel themselves for leaner times ahead'. Print Edition | Subscribe