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Malaysia - online gambling regulations

Published by Niki | August 30, 2020

Gambling in Malaysia

Malaysia is one of the places in the world where online betting is a confusing topic. That being said, online gambling is still incredibly popular there. While most countries and regions are changing their ways and becoming more lenient towards online gambling or even legalizing it, it seems Malaysia is set to do the opposite.

Malaysia is a federal constitutional monarchy in Southeast Asia. In this country, there are 3 federal territories and 13 states. One of the main factors that influence any laws regarding gambling is the Islamic religion. However, the country doesn’t enforce Islam on all its citizens by law and opens Malaysia to others with different beliefs. Many of the current gambling regulations are applicable to Muslim citizens only, while citizens of other faiths are allowed to partake in certain forms of gambling.

In an effort to understand the current situation regarding online gambling in Malaysia, we’ll be looking at the history and laws of the country, prospective new laws, and whether or not online gambling is considered legal. If you are based in Malaysia, it would be best to keep reading to avoid getting into trouble with the law.

Online gambling regulations in Malaysia

History and laws of gambling in Malaysia

Due to the fact that Malaysia is a mainly Muslim country, the legal framework dictates that nearly all forms of gambling, whether online or land-based, are considered illegal. The country has three majors Acts in place to clarify its stance on gambling.

The Betting Act of 1953 is the most prominent and basically outlaws all forms of gambling. This law is quite thorough and even mentions telecommunications, as well as other ways bets, are transmitted between customers and betting houses. Where most legislation normally has some loopholes that can be used to the advantage of online gambling, this Act is quite clear and makes sure all loopholes are covered. This act, however, seems to be more focused on bookmaking and sports betting.

Then there is the Common Gaming Houses Act of 1953 that covers all other forms of online gambling and renders it a criminal offence to operate a gaming house or even to be caught in one. Anyone who is caught breaking the law by disobeying the Betting Act or Common Gaming Houses Act will suffer severe punishment. This may include a fine of up to 5,000 Ringgits, and/or about 6 months in prison.

Finally, the Malaysian Constitution makes Islam a mandatory religion for all Malays, who make up over 60% of the population, and they are bound by the Sharia Law. Non-Malays of the country are not bound by this law. It’s important to know that the country recognizes Sharia courts. These courts and the separate legal system exist in harmony, but this also means that there is a dual justice system which makes matters a little more complex, and therefore makes it difficult to implement certain laws. The fact of the matter is that Sharia Law forbids gambling, and seeing that this law applies to 60% of the country’s citizens, gambling is mostly illegal.

New developments & tighter legislation in the making

While there are some legal loopholes to allow non-Malays to participate in online gambling, the Malaysian authorities are determined to change that. As seen with The Betting Act of 1953 and the Common Gaming Houses Act of 1953, they can be very thorough in their legislation drafting.

In late 2017 the Malaysian government announced that they will be changing their current gambling laws to deter residents from participating in online gambling. The changes will be made to the Common Gaming House Act 1953 and will make it illegal for citizens to access any online gambling sites or mobile apps.

According to their Deputy Prime Minister, Ahmad Zahid Hamidi, they are still deciding on whether the change of law will come in the form of an amendment or whether they will draft a new law that prevents and specifically targets online gambling. One thing is certain and that is that the Malaysian government is not backing down and are taking things up a notch.

Shortly after the announcement, the Malaysian police started their crackdown against online gambling websites. The authorities are definitely not playing around and have even partnered up with international police (Interpol) and a number of telecommunications companies, to ensure any offshore websites are blocked from accessing Malaysian citizens.

Are your gambling winnings taxable in Malaysia?

While online gambling is considered illegal there are still some that manage to find a way to access it. The good news is that these players are not required to pay any taxes on their gambling winnings. Everything you win you get to take home without having to declare it with your tax returns.

There is some bad news for casino operators, of which a few legal casinos in Malaysia can be found in Resorts World Genting. There has been a flat rate of 22% tax on annual revenue that has remained unchanged over the years. In more recent years the Malaysian government has strongly considered increasing the rate to around 25%. This again does not apply to players, and you get to keep every bit of your earnings.

Is online gambling legal in Malaysia?

Up till now, there have been some loopholes in the country’s laws and regulations that one could argue doesn’t make it completely illegal to play at online casinos. Recently the government has decided to amend these laws or bring in new legislation that will definitely render online gambling an illegal activity.

For those avid players who are persistent and eager to still participate in online gambling, there are a few licensed sites that allow Malays to sign up and play. Before you start playing at these online sites, just make sure they are trustworthy sites. You can also take a look at the top international online casinos we’ve listed on our site.

Online gambling is clearly considered to be a no-go in Malaysia, but the authorities have been known to target operators rather than individual players. Thus, if you feel like playing online you can, but with the laws changing there could pretty soon be no way of accessing online casino sites for the Malays.

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