QuickCheck: Is online gambling currently illegal in Malaysia?

ONLINE gambling is almost commonplace and ads for such activities can be seen in dodgy websites, spam email as well as unsolicited SMS and WhatsApp messages.

Is gambling on online casinos and betting sites illegal?

Verdict:

TRUE

Online gambling is illegal under the current Common Gaming Houses Act 1953 (CGHA), the Betting Act 1953 (although the Act does not explicitly cover it) as well as Syariah Law.

The Betting Act is a broad-based one that bans all forms of gambling unless the company has a legal licence to operate and covers telecommunications and other means of transmitting bets between customers and betting houses.

As per this Act, anyone caught running a betting house or caught in one will be penalised with a RM200,000 fine and five years in jail.

The CGHA (with further amendments) is more inclusive than the Betting Act in its coverage of types of gambling. The CGHA defines gaming as “the playing of any game of chance or of mixed chance and skill for money or money’s worth”.

In 2020, the punishment for both illegal gamblers and gambling operators was increased 20-fold, from RM5,000 to RM100,000 and a minimum jail sentence of six months.

Syariah law bans all forms of gambling among Muslims in the country.

Unlike traditional brick-and-mortar operations, however, it is easy for online gambling providers and users to mask their identity online.

Furthermore, regulation of such sites is difficult as all the authorities can do is block offending sites.

However, according to LGMS Berhad chairman and cybersecurity consultant CF Fong, even doing that is difficult.

“They will (just change) their domain name once their servers have been blocked. They can notify their users about the new sites that can pop up quickly. It will be difficult for the authorities to keep track and block (all of) them,” he said.

Fong added that many online gambling sites had their servers hosted abroad, making it harder to identify the owners.

Fong also believes legalising online gambling could lead to other social issues.

“When you allow online gambling, anyone can set up a site and collect money from people. So unless the (act of) gambling is based in (physical) establishments, it will not be feasible to regulate.

“Ethically, I don't think (allowing) it is good because you are encouraging and giving the public more access to gambling,” he said.

On the other hand, the Communications and Multimedia Ministry has estimated that the country loses RM2bil in taxes annually to online gambling.

Deputy Minister Datuk Zahidi Zainul Abidin told The Star in a recent interview that the government was looking into updating the CGHA to better tackle online gambling.

He said it was even considering allowing certain online games that involve “betting” and “gift offers” to be regulated.

He said online games (the non-gambling kind) were very popular in Malaysia and some charge people to play.

“Some of the operators also offer ‘gifts’, and we are hoping to regulate this as well,” he said.

While not strictly gambling per se, some of these games do have gambling-like features, especially those that use loot box mechanics.

In video games, a loot box is a consumable virtual item which can be redeemed for a random selection of in-game items, some of which are highly prized.

These are obtained either through events within the game or directly from the game maker with cash.

Minister in the Prime Minister's Department (Parliament and Law) Datuk Seri Wan Junaidi Tuanku Jaafar said the Finance Ministry was contacted about two months ago, and offers to amend the law on its behalf were made.

“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,” he had said.

Wan Junaidi added that he was awaiting Finance Ministry confirmation on the issue.

He also said the current laws on gambling were outdated, especially when it came to online gaming.

References:

1. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8274414/

2. https://www.lexology.com/library/detail.aspx?g=452f5e91-2251-4a8a-bd07-f55b94e10e9e

3. https://www.thestar.com.my/news/nation/2022/06/22/gruelling-to-navigate-online-gamblingin-cyberspace

4. https://www.thestar.com.my/news/nation/2022/06/22/rm2bil-loss-from-online-gambling

5. https://www.thestar.com.my/tech/tech-news/2022/06/02/groups-urge-us-to-probe-039loot-box039-on-electronic-arts-video-game