Malaysian Gov’t Eyes Regulating Online Gambling to Address Illegal Operations

Malaysia’s crackdown on online gambling operations reportedly revealed police officers who have been protecting the hubs supporting the illegal operations. In July of this year, Malaysian Deputy Minister Datuk Zahidi Zainal Abidin of the Ministry of Communications and Multimedia, had remarked via the national TV3 that he has put forward suggestions that it would be better for the government to regulate and collect taxes from online casinos operating in Malaysia, as an alternative to tolerating illegal operations.

Who Tolerates Illegal Online Gambling Operations in Malaysia?

The technology firms raided in Kuala Lumpur, the capital of Malaysia, presented themselves as local software development companies, but were actually providers of illegal mobile gambling apps that allow Malaysians to gamble online with real money. The firms are reportedly also making it possible for illicit gambling operators to navigate money transfers in 7 different banks located in nearby countries — financial activities deemed in violation of international Anti Money Laundering laws.

 

However, based on investigations of the Malaysian Anti-Corruption Commission (MACC), several senior police officers in Kuala Lumpur, appear to be under the payroll of the local cartel. Allegedly, they have been providing protection to the technology companies supporting the illegal online gambling rings and their money laundering activities.

While about 37 individuals were held under suspicion of acting as protectors, later reports gave clarifications that said police officers were only invited for questioning and that no actual arrests have been made. Moreover, the MACC later decided to allow nine of the arrested individuals to post bail and be out of jail while investigations are ongoing.

 

The move though, was opposed by the Kuala Lumpur Criminal Investigation Department (CID), which the CID countered by immediately re-arresting three of the nine individuals released on bail. The Director of the Kuala Lumpur CID said the three are being detained under the Prevention of Crime Act, so they can assist in furthering the investigations on illegal online gambling and money laundering operations in Malaysia.

PAGCOR Reached Out to Malaysian Government to Consider Regulating Online Gambling

In separate but related news reports in the Philippines, the head of the country’s gambling regulatory body PAGCOR Andrea Domingo, told the Philippine News Agency that they have been in communication with the Malaysian government about the benefits of regulating online gambling in their jurisdiction. After all, many of PAGCOR’s licensed offshore online gambling operators (POGOs) also offer online casino products and services in Malaysia, but are subject to licensing and regulatory oversight.

The PAGCOR Chief shared the news that based on a Memorandum of Agreement sent to Malaysian authorities, the latter are now seriously considering opening its doors to POGOs. Ms. Domingo said that the Malaysian government has already expressed willingness to give generous incentives to online gaming companies who will physically relocate their business to Malaysia.

 

The offer includes a ten-year tax moratorium but to be granted on conditions that POGOs will make sure only non-Muslims will be given access to the gambling sites. Moreover, in order to qualify for the incentives, at least 30% of each firm’s workforce must consist of Malaysian citizens.

Malaysia is Looking to Designate a Malaysian-Based Gambling Regulatory Body

In line with the announcement, the government of Malaysia is now looking to designate an official government regulatory body to regulate, monitor and impose taxes on appropriate parties related to the operations of the online gaming companies. Moreover, the plan includes dividing Malaysia’s online gambling landscape into three sectors based on the following categories::

 

1.  Malaysian citizens who gamble in overseas websites

2.  Overseas gamblers playing in Malaysian online gambling websites

3.  Malaysian locals who gamble in Malaysian online gambling websites.

 

In the meantime, as these developments will take time before they actually happen, Malaysian gamblers should take care not to access online gambling applications provided by Malaysia-based software companies as they are not licensed and regulated by PAGCOR.

As it is, Malaysia-facing online casinos like mega888 maintain their base of operations in the Philippine. That way, PAGCOR can closely supervise and monitor their online casino slot games, mobile applications, the related APK, and online gaming operations as a whole.

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