By Xavier Kong
In the previous part, KiniBiz had a look at the origins of casino big hits, and also the technology behind some of those games. In this issue, KiniBiz looks towards the darker side of things, at the illegal side of gaming, what it means in Malaysia, what is being done about it, as well as how it will affect the players for the casino sector in Malaysia.
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The gaming sector may have started out as a means for people to pass the time, but from that sprung an industry that can, in the span of a day, either build empires, or crumble them to dust. To quote Martin Chua, founder of http://www.MacauCasinoWorld.com: “Everyone is trying to get a touch of the sacred green felt and strike it rich. Gamblers come to Las Vegas to be entertained, but here in Macau, gamblers, especially Chinese gamblers, step into a casino to challenge their destiny!”
But as it is, there are those who attempt alternate ways to challenge their destiny. Yes, KiniBiz refers to the illegal operators who ply their trade on the side, without the sanction of the authorities.
Illegal gambling in Malaysia is defined as gaming in public or gaming in a common gaming house, and each of the offences carries with them a fine of RM5,000, a jail term not exceeding six months, or both.
Also mentioned is the note that the owner or occupier of an illegal gaming center “shall be guilty of an offence and shall, on conviction, be liable to a fine of not less than five thousand ringgit and not more than fifty thousand ringgit and shall also be punished with imprisonment for a term not exceeding three years and in addition shall be liable to a fine of not less than five thousand ringgit and not more than fifty thousand ringgit for every gaming machine seized.”
Online gaming (thankfully, not the PC and console variant) is supposedly illegal in Malaysia as well, but while there is legislature and laws on gambling, the legal material does not specifically address online gambling, according to a study by Dhillon, Jeyakumar, Ridzwan and Ng in 2012.
The study continues to note that while there are laws against the running of a common gaming house, or even patronising one, there is nothing specific regarding online gambling. The study called for a revision of the legislation to close of the legal loophole.
However, frixo.com, an online bookmaking site, mentioned in its article on Malaysian betting that “the (Betting) Act further states that “any person who bets or wagers in a common betting house, or with a bookmaker on any premises or by any means, shall be guilty of an offence.” It could not be any clearer—both bookmaking and sports betting are illegal in Malaysia, online, by phone, over-the-counter or by any other means.“
Government’s response
The government announced amendments to ten bills, three of which were involved with the governing of gaming in Malaysia, the Common Gaming Houses (amendment) Bill 2013, Lotteries (amendment) Bill 2013 and Pool Betting (amendment) Bill 2013, as a bid to provide clearer provisions to tackle crime covered by these laws. The entire amendment was a bid to better handle organised crime in the country.
However, later in 2013, the government withdrew six bills, including the three mentioned above to, according to minister in the prime minister’s department Nancy Shukri, “allow further fine-tuning after taking into account the views of various quarters”.
Another measure taken by the authorities was the establishment of a 200-strong task force by the police, the Special Task Force on Organized Crime, which will be tasked with rooting out illegal gambling operations and online gambling, alongside its duties to shut down organised crime.
The task force was announced by home minister Ahmad Zahid Hamidi, who was said he wanted illegal operators to know “that we mean business.” The home minister continued on to warn illegal operators, “both conventional and online, to close down their business now, and not mess with us.”
The home minister also took the opportunity then, to put local police on notice, asking that they pursue illegal operators more vigilantly, and diligently, lest he send in federal reinforcements to “take over the job.”
Impact on major players
With regards as to how illegal gambling affects the major players, one local analyst noted that the bets at illegal gaming centres are not as big as those high-rollers and VIPs who visit legal casinos. VIPs and high-rollers account for a significant portion of a casino’s revenue, and said analyst mentioned that the illegal centres and operators target the mass market rather than high-rollers.
“Since the casinos will still have their VIPs, which contribute a significant amount of their revenue and profit, illegal centers would not affect legal players too much.” said the analyst, adding that the mass market contributed significantly less towards a casino’s end revenue and profit.
For all that the legal players and the legal authorities do, illegal gaming centers still crop up. Basic economics state that, for there to be a supply, there has to be adequate demand, more so if the supply is fraught with risk.
An analyst from a local research house noted that illegal gaming centers dodge the taxation of a legal gaming centre, and thus can afford to offer bigger prizes.
“Since they don’t pay tax, like the bigger players, they can put up better prizes. It’s all about the money,” said the analyst.
However, another analyst noted a different factor, that location played a role in the demand for common gaming houses.
“It’s a matter of convenience,” said the analyst. “Most illegal places set up in areas readily accessible by their target, the mass market. This convenience is probably one of the reasons there is still demand. Not everyone has the time or ability to go to Genting when they want to play.”
The same analyst also alluded that manufacturers were part of the chain allowing illegal gaming centers and operators to flourish.
“The manufacturers probably play a part as well, otherwise, where would all these illegal operators get the things they need”.
Yesterday: Techy gamblers or gambling techies?
Tomorrow: A day at the casino on the hill
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