Malaysia considering regulating online gambling to stop tax bleed

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The Malaysian government is pondering over regulating online gambling to help boost their economy. According to an estimate, the government is losing around MYR2 billion ($454 million) a year by not taxing the online gambling sector in the country.

Online gambling is banned under the current Common Gaming Houses Act 1953 (CGHA), the Betting Act 1953, and Syariah Law. The Betting Act bans all forms of gambling unless the company has a legal license to operate. Under this Act, anyone caught running a betting house or involved in one will be penalized with an RM200,000 fine and five years behind the bar.

But due to the economic crisis that the pandemic brought upon the country, the government officials have had a change of heart in recent times. Deputy Communications and Multimedia Minister Datuk Zahidi Zainul Abidin admitted that the government is seeking amendments to the rigid Common Gaming Houses Act 1953, which would help regulate online games involving betting.

Another minister in the Prime Minister’s Department Datuk Seri Wan Junaidi Tuanku Jaafar said the laws are under the jurisdiction of the Finance Ministry and it was contacted about two months ago on offers to amend the law. But they are yet to receive an answer to their proposal. He remarked that taxation will help the economy of the country to great extents and will also solve various issues with roads, drains, and others.

“In principle, the law is under the Finance Ministry’s jurisdiction, but we cannot amend it unless we are given the power to do so. These taxes can be used to solve many problems…issues with roads, drains and other, but the government is unable to do so as it doesn’t have a mechanism,” Zahidi had said to The Star newspaper.

Zahidi first proposed the idea of regulating online gambling in November of last year but it was dismissed by industry insiders in Malaysia as they thought the political situation in the country was too volatile and they would need a united effort by all political parties to push through this proposal which doesn’t seem forthcoming at the moment as the general election is approaching.