Islamic Party's Success Jeopardises Online Reform In Malaysia

November 22, 2022
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The possibility of online gambling regulation in Malaysia may have been extinguished for the foreseeable future, following shock gains by a leading Islamic party in Saturday’s national elections.

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The possibility of online gambling regulation in Malaysia may have been extinguished for the foreseeable future, following shock gains by a leading Islamic party in Saturday’s (November 19) national elections.

The conservative Parti Islam Se-Malaysia (Pan-Malaysian Islamic Party, PAS) won 49 seats in the 220-seat chamber, surprising observers by becoming the largest individual party in the legislature.

PAS’ rise from regional obscurity now places extreme pressure on cautious government moves to liberalise online gambling for non-Muslim Malaysians as a countermeasure to illegal gambling.

The surprise surge of support for PAS emboldened the leader of its Perikatan Nasional (PN) coalition, Muhyiddin Yassin, to announce he could form government over Anwar Ibrahim’s Pakatan Harapan (PH) coalition, which secured eight more seats, by appealing to other parties.

PAS almost doubled the number of seats won by the United Malays National Organisation (UMNO), a once-unstoppable political force under 97-year-old former Prime Minister Mahathir Mohamad, who lost his seat on Saturday.

Malaysia’s hung parliament is likely to give PAS a disproportionate amount of influence over policymaking and bodes poorly for the gambling industry and other “vice” segments, such as alcoholic beverages, that PAS has criticised in the past.

Gaming and beverage stocks fell sharply after the poll, with Genting Malaysia, operator of integrated resort Resorts World Genting, falling up to 10.7 percent on Monday before recovering to 6.3 percent below its opening price. The stock was slightly above that recovering level at publication time today.

Lottery and lottery equipment giant Sports Toto was down 9.6 percent from Friday’s close at publication time, nearing a low not seen since 1993, Bloomberg reported.

James Chin, a professor of Asian Studies at the University of Tasmania, said the unexpected rise of PAS as a “major power broker” has “major implications for the country as it steadies itself to grapple with global economic headwinds and geopolitical tensions”.

“We are seeing a sea change in Malaysian politics. PAS’ brand of conservative religious politics has become more attractive; political Islam has become mainstream in Malaysia,” Chin wrote for Singapore’s CNA news channel.

Chin said PAS may demand key ministries “with the potential to fundamentally change Malaysia if it pushes for more religion-based public policies”.

He added that the once remotely situated party, based well away from sites of major foreign investment, could be forced to moderate its tone with its new-found power, especially given its history of antagonism toward Chinese Malaysians, who dominate the gaming sector.

However, the future of online gambling operations, whether domestic- or foreign-facing, would remain a prime target of the party if it stands by its opposition to state-approved gambling interests.

Cabinet officials in recent years have been pushing for online gambling reform as part of an overhaul of archaic gambling legislation to stem massive losses in consolidated revenue.

The main supporter of regulation has been communications and multimedia deputy minister Zahidi Zainul Abidin, who broached the possibility in May 2020.

Zahidi was expelled from the UMNO earlier this month for standing in his seat as an independent, before losing the seat on Saturday with less than 2 percent of the vote.

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