Online Gambling As Casino Faces Closure Threats

Malaysia Moves To Regulate Online Gambling As Casino Faces Closure Threats

The Malaysian government recently re-emphasized its plans to shift from an ill-concealed online gambling sector to a legal one in an effort to boost efforts combating such illicit operations and to collect taxes from them. This move has come at a time the only casino in the country is under the throttle of an influential Islamic political party which may close it down entirely.

Malaysian Communications and multimedia deputy minister Zahidi Zainul Abidin told the Malaysian parliament that the legislation on licensing online gambling operations and enhancing the enforcement capacities are in the making. A paper has been presented to the finance ministry to revise the Common Gaming Houses Act 1953 which would permit the selling of licences to the Internet gambling agencies.

To this Zahidi said that the resultant tax base could complement other efforts aimed at fighting the illicit businesses especially that which are conducted online from other countries. He also informed that although the vices like lotteries and functioning based institutions of casinos are existing in Malaysia and these institutions of gambling are being taxed hence the income gained from these vices are taxable, the same cannot be said for the online gambling done internationally. The discussed proposal of licensing scheme can help to get rid of this problem and keep Malaysian gambling funds in Malaysia.

The shift towards regulation happens after 18 months of no talk, ever since Zahidi floated the idea of liberalizing the online gambling segment for non-Muslim customers in May 2020. Yet, non of key issues as the number of licences, types of products, and the lapse of the legislative process has been established.

As the government looks at options of how to regulate online gambling the only casino in the country faces threats of closure due to pressure from Islamic parties. Perlis-based PAS which currently has power in four of the thirteen Malaysian states has threatened to close down the casino should it clinch the Pahang state in the looming general elections.

PAS Pahang’s deputy commissioner, Andansura Rabu, in PAS annual congress said that gambling is bad and needs to be shut down. Such a position corresponds with the party’s goal to attract majority of Malaysians, who are Muslims, and per Islamic Sharia, gambling is prohibited. PAS has emerged as the largest Malay nationalist party in the lower house of Malaysia’s parliament obtaining forty-three out of two hundred and twenty-two parliamentary seats in the 2022 parliamentary elections.

The Genting Berhad’s Resorts World Genting casino has been licensed since 1969 and the license must be renewed after every three months. The casino has been a major source of revenue to the Malaysian government through taxes that are accrued from gambling income, duties on casino machinery and annual fees charges. According to Genting Group, Malaysia leisure and hospitality business revenue in 2023 stood at 6.42 billion ringgit ($1.4 billion) broad based on mainly gaming revenue.

However, the subject of gambling has not lost its sensitivity in Malaysian politics identified with economic gains. In January this year, the Prime Minister Anwar Ibrahim categorically dismissed the news about the construction of the second casino in Malaysia and indicated that the country should not need new gambling facilities and should occupy itself with energy transition and AI for the further development of the country.

Such a possibility of the shut down of the only casino in Malaysia implies that the country and more specifically the tourism sector would be threatening. Nevertheless, it is noteworthy to indicate that other countries in the region like Singapore, Vietnam and Philippines have adopted casino gambling as a tool in their tourism and or commercialization policies. New casino projects are now being discussed in the Philippines with the view to surpassing Singapore on Asia’s gambling hub list second only to Macau.

The Malaysian government will continue to experience these tensions – gambling’s economic incentive versus religious and ethnic sensitivity – when it comes to online gambling and land-based gambling alike. The next elections and the positions of secular and religious forces may have the leading impact on the future of gambling in the country.

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