The government of Malaysia is losing an estimated RYM3 billion (US$767.6 million) in annual tax revenue to illegal 4D betting operators in the country, local media has reported.
According to The Sun Daily, the “boom” of illegal 4D operators in Malaysia is not only taking a huge chunk of profits from licensed gaming companies, but it also denies the government billions in tax revenue.
A gaming executive told the news outlet that the legal market, which makes an estimated RYM9 billion in profits, pays about RYM2 billion in taxes. The unlicensed sector, on the other hand, allegedly makes “about 1.5 times larger.”
“The government is losing about RYM3 billion in duties and taxes each year, in the same way revenue is lost through the activities of syndicates that smuggle cigarettes and liquor into the country and evade taxes,” the executive said, according to the report.
A source with knowledge of the illicit 4D activities in the country pointed to the “slack in enforcement,” which he said allows the runners—who earn a commission of between 20 percent and 30 percent from each bet—to operate “blatantly in public places.”
Illegal online gambling, aka the “new kid on the block,” also isn’t helping the country’s tax coffers, according to the gaming executive.
The government has already laid out its plans to revamp the archaic gambling laws that will see harsher penalties imposed on illegal online gambling operators. Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi admitted there is a need for change since many of Malaysia’s gambling laws were introduced long before the advent of the internet.
Malaysia has been waging a long-running war with internet café operators who offer access to computers that connect to internationally licensed online gambling sites, which said were constantly coming up with “different modus operandi, including abusing entertainment licenses by modifying their equipment and devices for online gambling.”
To date, the government has blocked access to at least 399 websites, including online gambling sites, the country has deemed illegal.
Malaysia is a deeply religious country that severely limits its citizens’ ability to wager. Local Muslims aren’t allowed in the country’s one licensed brick-and-mortar casino—Genting Highlands—while religious authorities frown on use of the three licensed “number forecasting” operators – Magnum, Sports Toto and Pan Malaysian Pools – or the Royal Sabah Turf Club.