Bring in tougher laws for illegal gaming operators

With an estimated Rm3bil lost annually action needs to be taken

IT’S time for the budget again.

If there is a sector that needs an honest and realistic review, it has to be the gaming industry.

An estimated Rm3bil is lost in tax revenue annually from the government coffers because of illegal betting syndicates.

Yet nothing much has been done to fight these operators.

For a start, it is perplexing that the Common Gaming Houses Act 1953 (CGHA) has yet to be revised.

The other existing laws, such as the Lotteries Act 1952 and Betting Act 1953, are older than the country’s age.

The penalty for illegal gambling under this archaic law is a paltry fine of up to RM5,000, a maximum six-month jail sentence, or both, while operators can be fined up to RM50,000, jailed up to three years, or both.

With such a light punishment, why would that be a deterrent to operators that are raking in billions of ringgit?

There’s no minimum in the penalty to be meted out.

Thus, if the law is interpreted as “up to RM5,000 or RM50,000,” it can also mean it could be a mere RM1,000 as an example.

Likewise, “jail of up to three years” can also mean no jail sentence at all.

To put it simply, the present laws are not tailored to deal with illegal gambling and more so as these operations are now conducted in cyberspace beyond national borders.

Online gaming, including even online casinos, are widespread with these operators cleverly changing their domain names regularly to prevent detection or their domains being blocked.

The six licensed number forecast operators (NFOS) that pay huge taxes have also found themselves in a tight spot.

They are the Peninsular-based Magnum, Sports Toto and Damacai with the other three being Special Cashsweep, Sabah88 and Sandakan4d, with operations in Sabah and Sarawak.

These legal operators, operating in a highly regulated environment, had an estimated revenue of over Rm9bil previously with sales tax amounting to Rm2bil annually.

Except for Damacai, owned by Pan Malaysian Pools Sdn Bhd, which is governed by the Totaliser Board, none of the other operators are allowed to accept calls and have bets placed via the mobile phone.

But the irony is even the illegal small-time neighbourhood operator can take bets via Whatsapp from their clients.

The reality is that there is a need to draw up tougher laws to deal with online gaming, as even the Anti-money Laundering Act 2001 and Prevention of Crime Act 1959 are not designed to deal with illegal gambling and more so if they were conducted in cyberspace.

Singapore, for example, has its Remote Gambling Act, to curb online gambling while its laws allow banks to bar transactions or payments to online gambling operators while those associated with the business, including those managing operations as a third party, would also face consequences, according to a report in The Star.

Under Singaporean law, those caught can be fined heavily, with amounts ranging from S$20,000 (RM65,000) to S$500,000 (Rm1.6mil), and jail terms of up to seven years.

The reality is that illegal 4D betting syndicates have grown larger and more sophisticated over the last decade, while existing laws remain unchanged.

The government and legitimate NFOS continue to lose huge chunks of money because of inaction.

In June, Deputy Finance Minister Datuk Zahidi Zainul Abidin said the government was looking at updating the CGHA to better tackle online gambling.

It was heartening to hear Zahidi say that the Ministry of Finance (MOF) was even considering allowing certain online games involving “betting’’ and ‘’gift offers’’ to be regulated, while the Minister in the Prime Minister’s Department Datuk Seri Wan Junaidi Tuanku Jaafar said he was awaiting the MOF for the proposed amendments.

He agreed that the current laws on gaming were outdated especially when it came to online gaming.

We need to adopt a realistic approach to the gaming industry as we are talking about a huge amount of revenue and taxes.

The business is already a stifling one and a difficult one to operate, but the reality is that any indifference by the government would only benefit the criminal operators as well as corrupt enforcement officials.

Calls by religious groups or politicians to close down legitimate NFO outlets won’t be helpful either. It would have a counter-effect actually.

There was no difference from the Prohibition of the 1930s in the United States, when it tried to ban alcohol as it drove drinking underground with the beneficiaries being the illegals.

More than ever, as the government seeks to increase its revenue and tax collections for 2023, the MOF can allow existing NFOS to operate in a more flexible approach.

For a start, it does not make sense they are still unable to accept bets online in the digital age.

It also needs to carry this out with a proposed amendment to the CGHA to make it tougher for illegal gaming operators.

The reality is that there is a need to draw up tougher laws to deal with online gaming, as even the Anti-money Laundering Act 2001 and Prevention of Crime Act 1959 are not designed to deal with illegal gambling.