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MALAYSIAN SPORTS BETTING LICENCE GRANTED

5/14/10 - Malaysian football fans will be able to bet on their favourite international teams, although not on the World Cup, following a relaxation in the country’s strict anti-gambling laws this week.
 
The Finance Ministry has granted Vincent Tan’s Ascot Sports (see previous InfoPowa report) a licence to offer betting on sports such as soccer, basketball, motor racing, tennis and golf. Unfortunately, the more enlightened approach comes too late for the licensee to offer World Cup wagering.
 
The notification was made by Tan's Berjaya Corp., which is buying 70 percent of Ascot for 525 million ringgit ($163 million).
 
The Bernama news agency reports that gambling is a sensitive political issue in Malaysia, where ethnic Malay Muslims comprise nearly two-thirds of the country's 28 million people. Non-Muslim minorities, mainly ethnic Chinese and Indians, are allowed to purchase lotteries and bet on horse races, but betting on other sports has been illegal.
 
Industry officials estimate illegal sports betting in Malaysia could total 20 billion ringgit ($6.2 billion) every year, with soccer betting accounting for about 90 percent.
 
"This represents a tremendous loss of tax revenue to the government, which Ascot Sports hopes to be able to mitigate," Berjaya's statement said.
 
Ascot is likely to launch the betting services by August, not in time for next month's start of the FIFA World Cup in South Africa, a Berjaya official said.
 
The service will be offered through selected outlets and by telephone for non-Muslims aged above 21, according to the Berjaya statement. The official said Ascot might seek approval to offer online betting, in which it has experience from its European venture some years ago.
 
The Federation of Malaysian Consumer Associations has slammed the move, saying it was the government's responsibility to stop gambling rather than benefit from it.
 
"It will encourage people to gamble, and this will cause other problems," such as illegal money lending to pay off debts, more crime and possibly suicides, spokesman Mohamad Yusof Abdul Rahman said.
 
OSK Research has estimated a potential legal sports betting market of RM6.4 billion to RM7.7 billion in Malaysia, or 0.5 percent to 0.6 per cent of gross domestic product.
 
"This is premised on smaller potential sports betting captive market [due to religious restraints] and lower disposable income versus Singapore," it said in its research report.
 
OSK said illegal operators, who were not subject to tax, would have a significant advantage over the legal operators in offering more favourable odds.
 
"This, coupled with the all-important credit facilities granted by the illegal operators (and not the legal operators), suggests that the initial upside for the legal sports betting operators may have to be in the form of lower-yielding marginal gamblers and the RM7 billion legal market estimate may be a longer term target," it said.



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