Malaysia Confirms Talks On Online Gambling Liberalisation

November 16, 2021
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After 18 months of silence, the Malaysian government has reaffirmed it is moving toward a regulated online gambling environment to strengthen the fight against illegal activity.

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After 18 months of silence, the Malaysian government has reaffirmed it is moving toward a regulated online gambling environment to strengthen the fight against illegal activity.

Communications and multimedia deputy minister Zahidi Zainul Abidin told the Dewan Rakyat (lower house) of parliament on Monday that legislation is being developed to license operators and expand enforcement.

Zahidi said a proposal has been submitted to the finance ministry to amend the Common Gaming Houses Act 1953 to license online gambling operations.

Resulting tax revenue could bolster the fight against illegal operations, particularly those based overseas, he said.

"For example, the money used by Malaysians for Magnum 4D, lottery draws and other forms of gambling such as casinos in Kuala Lumpur [sic] and Genting Highlands are taxed,” Zahidi said in Malay during parliamentary question time, according to The Star newspaper. No legal casinos exist in Kuala Lumpur.

"But we don't get to collect taxes if the online gambling is conducted abroad from countries such as Indonesia, Philippines and Thailand," he said.

"So there is a proposal to license such activities, as what is happening now is that money belonging to Malaysians is being taken out of the country.”

Under the Common Gaming Houses Act, “we can make an arrest only if gambling is committed in such premises”, the Bernama news agency quoted Zahidi as saying.

“If committed outside a common gaming house, we cannot make the arrest because there is no [applicable] law, let alone for online gambling. So, we have to formulate a new act,” he said.

Zahidi first revealed in May 2020 that the government was considering a degree of liberalisation of the online gambling space for non-Muslim customers in view of “massive tax revenue losses” to illegal operations.

Those comments, delivered during a prime time television interview, were apparently not repeated or clearly acted upon until this week, but meaningful detail of the government’s plan — number of licences, product types and a legislative timetable, for example — remains unavailable.

The Ministry of Communications and Multimedia was unable to expand on Zahidi’s comments when contacted by VIXIO GamblingCompliance on Tuesday.

Zahidi’s comments also come only days after a more punitive statement from deputy home minister Ismail Mohamed Said, who confirmed to the Dewan Rakyat on November 8 that the government is reviewing laws relevant to gambling.

But Ismail Mohamed made no mention of regulation, nor mentioned the participation of Zahidi’s ministry in the review, instead stating that the home ministry is working with the finance ministry “to see if the laws should be amended to ensure they are relevant to current times”.

Meanwhile, in a blow to the land-based gaming industry, Malaysia’s northern Kedah state has announced the prohibition of 4D lottery retail sales.

Effective immediately, 4D lottery outlets will not have their gaming licences renewed.

The move has dismayed some local commentators, who see the ban as a blight on Malaysia’s reputation as a moderate Islamic nation and part of a growing conservatism in some sectors that could impede foreign investment.

"It will serve as a warning sign to investors who will now suspect that there is more Islamisation to come, with more restrictions, more narrow-minded and parochial rules,” former Treasury official Ramon Navaratnam told the Malay Mail on Tuesday.

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