Malaysia Gambling Tax
Malaysia is a Muslim country, so any form of gambling is considered illegal. Plus, the Civil Contract Law in Malaysia states that any form of gambling or wagering is avoided. That means, if you lose a bet to another person, you can refuse to pay, and the winner cannot pursue any legal actions against you. The #1 expert guide to online casinos in Malaysia - Sign up at the top casinos, earn HUGE bonuses and win real money with the best games! Since Malaysia allows for legalised betting gaming and gambling activities to take place and collects tax revenue from these activities, it cannot be said that legal action for recovery of amounts outstanding under gaming credit facilities which relates to gambling activity is frowned upon in Malaysia. Law, substantial gambling winnings, typically over $1,200, are considered taxable income and subject to a withholding tax, though not all forms of gambling are taxable. If you love playing slots, gambling, playing poker, taking a chance on the lottery, or betting on horse races, a portion of your winnings can get withheld.
Foreign trade transactions 3.8. Debt collection 3.9. Business liquidation. MALAYSIA GAMBLING INDUSTRY OVERVIEW. MALAYSIA GAMBLING INDUSTRY PORTER FIVE FORCES ANALYSIS. MALAYSIA ECONOMY NEWS AND ANALYSIS DIGEST.Please note that Gambling industry in Malaysia: Business Report 2020 is a half ready publication.
There’s the common perception that gambling is illegal in Malaysia, and that’s true to a large extent. There are exceptions, like the casinos up in the Genting Resorts, and the good ol’ Toto, Magnum and Damacai that have licenses granted by the Minister of Finance. Did you also know that illegal gambling dens exist in Malaysia? The police were active in cracking down on these gambling dens at the end of last year. We’ll soon find out that not only can the patrons be charged with a crime, but the owners can be, too.
Now that Chinese New Year is around the corner, we’re pretty sure that there’s gonna be an increase of “chor dai di” playing among family and friends. What are the laws that govern gambling in Malaysia, and can you be arrested for a friendly game of poker in your own home?
There are Malaysian Acts of Parliament specific to gambling
An Act of Parliament basically just means law, in fancy language. The Common Gaming Houses Act 1953 and the Betting Act 1953 deals with illegal gambling in Malaysia, centered around the concepts of “betting houses” and “common gaming houses”. A betting house is where people place bets on things like horsing races or sports events, and organize illegal lotteries. A common gaming house is more relevant to our discussion in this article, because common gaming houses are places that host more “casinolike” games like roulette and poker.
That’s why from now onward, we’ll almost exclusively refer to the Common Gaming Houses Act 1953. Section 3 of the Common Gaming Houses Act 1953 straight up declares these houses as nuisances and are “contrary to the law”. Their existences are not tolerated at all by the authorities.
Section 4 of the Common Gaming Houses Act 1953 sets out offences that relate to owning or occupying the common gaming house. The section has a few subsections, we’re just gonna have a taster here:
4. (1) Any person who— (a) being the owner or occupier or having the use temporarily or otherwise thereof keeps or uses a place as a common gaming house; or
It’s supposed to be a catch-all subsection that is targeted at anyone who might be operating an illegal gambling den. Some examples of offences under section 4 include owning or occupying common gaming houses, and publishing advertisements for the gaming house, and the like. Offenders can be liable for a fine between RM 5,000 and RM 50,000 AND a jail term of up to 3 years, with additional punishment for each gaming machine (like slots or the roulette).
What if the someone doesn’t own a betting house, but is akin to an ‘investor’ of the common gaming house? Section 5 states:
5. Any person who advances or furnishes money for the purpose of establishing or conducting the business of a common gaming house or for the purpose of a public lottery or who profits from the establishment or conduct of such business shall be guilty of an offence...
These investors commit an offence by funneling money into the establishing and the conducting of a common gaming house. Not even people who make or supply gaming machines are spared. Section 4a says that anyone who deals in or manufacturers or assembles gaming machines (it can be gambling equipment, or those gambling arcade machines, or slot machines) commits an offence, and can be punished with a fine between RM 10,000 and RM 100,000 and a jail term of up to 5 years.
It can be difficult to catch gambling dens in action, so to facilitate the process of capturing common gaming houses, Malaysian authorities are allowed to make certain presumptions regarding certain facts. For example, section 19 of the Common Gaming Houses Act 1953 allows the assumption to be made that if a house or a premise has materials that allow for gaming/gambling, and operates as a common gaming house would, it is a common gaming house until proven otherwise. An example would be if a house has a couple of slot machines, a poker table and decks of poker cards, maybe a stash of poker chips, it would be assumed that this house is a common gaming house. It doesn’t have to look straight up like a casino, as long as it looked like gambling was being done, the house or premise may be regarded as a common gaming house.
Now we come to the actual offence of participating in gambling in a common gaming house. According to section 6(1) of the Common Gaming Houses Act 1953, anyone who games in a common gaming house is guilty of an offence, and shall be punished with a fine of up to RM 5,000, a jail term of up to 6 months, or both. Gaming is defined in section 2 as:
...the playing of any game of chance or of mixed chance and skill for money or money’s worth and includes the playing of any game specified in Column I of the First and Second Schedules and the playing or operation of any gaming machine…
Gaming can mean many of the common gambling games such as poker, blackjack, and roulette, but the First and Second Schedule of the Act has a list that include some of the less commonly known games, like “Tau Ngau” and “Ewok” (Not to be confused with the Ewoks from the Star Wars movies).
It’s also an offence to gamble in public, according to section 7(1) of the Common Gaming Houses Act 1953.
7. (1) A police officer may arrest without warrant any person found gaming in any public place and may seize all instruments or, appliances for gaming found in such public place or on the persons of those arrested under this section.
In fact, the cops can arrest you and your friends without a warrant if you play blackjack in public. They’ll confiscate your deck of cards, too. Anyone liable for gaming in public may be fined up to RM 5,000, imprisonment of up to 6 months, or both. Even if you were gambling without money but other items at stake (maybe a phone, or a watch) or even if you use things to represent money (like peanuts), it still counts, as stated in section 7(3).
You might be wondering if the police need a warrant to search premises or people that they think are common gaming houses or patrons, respectively. They do in fact require warrants to raid suspected gambling dens or gamblers. According to section 16 and 17 of the Common Gaming Houses Act 1953, if a Magistrate, or Justice of Peace or a senior police officer receives written reports of a suspected premise or person, they may make any enquiries that are necessary. These figures of authority may then issue a warrant to enter and search premises, and/or search individuals and seize anything that is connected to gambling.
In addition to the secular laws stated above, the Muslim community in Malaysia are also subject to Syariah law, which is documented in the Syariah Criminal Offences Enactment 1996. These Syariah laws vary from state to state, for example, the Syariah Criminal Offences (State of Penang) Enactment 1996 holds that if a Muslim is caught gambling, they can be subjected to a fine up to RM 3,000, imprisonment of up to 2 years, or both. In Pahang, a Muslim’s mere presence in a place for gambling warrants the same punishment.
There are minor differences in each state’s Syariah enactments on gambling, and each state has an Islamic Religious Affairs Department, whom among other agencies, enforces Syariah law. Even Muslim tourists are subject to these laws.
It’s still gambling if you do it at home
It might sound weird, but yes, if you and your friends and family play poker at home and there’s money (or other valuables at stake):
- Your house is technically considered a common gaming house, in that period of gambling
- You and your friends and family who participated in the poker game that involved money have technically violated section 2
- Unless you’re using tokens like peanuts for fun and don’t actually exchange them for cash later, you could get into trouble with Section 7(3).
But wait, there’s more! You’re technically not breaking any Malaysian laws if you gamble online, because most, if not all online gambling sites are hosted in other countries. The Home Minister, Datuk Seri Dr Ahmad Zahid Hamidi, said in 2017 that the Malaysian government is trying to set up preventative measures against online gambling.
We’ll leave you with this really interesting piece of trivia. There is one other place than Genting Highlands that has a gambling license, and would you believe it, it’s in Ipoh. The Han Chin Pet Soo was a clubhouse for Hakka Chinese miners and it was kind of like an old timey Zouk but with more debauchery. The clubhouse was known to play host to vices like gambling, prostitution, opium consumption and the triads.
Here’s how you can report illegal gambling
The PDRM have released a list of phone numbers that you can report illegal gambling to, with thanks to our friends over at the Enforcement Agency Integrity Commission for sharing it.
[READ MORE:Malaysian authorities have to investigate if their officers mess up. But what if they don't?]
In Malaysia our gambling laws are quite interesting. Resorts World Genting is reachable in about one hour from our capital Kuala Lumpur by train. This is where Monte Carlo Casino, Hollywood Casino and StarWorld Casino are located. It is however illegal for 60% of our population to use these casinos – specifically Muslims. The same applies to other forms of gambling here too.
In this article I’ll explain the laws, what forms of gambling are legal, and how this differs for Muslim and non-Muslim. If you are interested in Online Betting from Malaysia there is a Part II article that you can read on the bottom of this page.
Betting Act 1953 and Exemptions
The primary law that regulates gambling in Malaysia is the Betting Act of 1953. This was amended in 1958, 1959, 1961, 1989, 1992 (twice), and 2006. The link provided is to the current copy which includes all amendments.
This Act is about 20 pages and is written in simple easy to understand English. While there are many laws and very little is left out, let me mention the primary law for players. Here the penalty for unlawful gambling is set at “a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding six months or to both.”. It also includes much stricter laws for those involved in operating, promoting or having any non-player involvement in gambling businesses.
There are however many forms of legal gambling under the Betting Act. It specifically states the penalties do not apply to approved and licensed gambling. As mentioned in the intro to this article, for that we have legal casinos that are available. We also have legal pari-mutuel horse race betting due to the Racing (Totalizator Board) Act 1961. Lottery is legal here too which originally government owned has been private since 1985. You can learn about that at www.sportstoto.com.my.
Sharia Law Applies to Mulsims
The legal forms of gambling mentioned above are mostly designed to target Chinese (about 1/3 our population), other minorities, and tourists. Under Malaysian law all ethnic-Malays are required to be Sunni Muslim. They are therefore subject to Islamic Law which makes gambling a serious crime. For those not familiar with this take a look at Penang’s Syriah Criminal Offences Enactment of 1996.
The above link is a decent scan for anyone not familiar with Malaysian Law. Here you will find penalties for enticing a female person, abuses of halal sign, preventing a married couple from cohabiting, and all sorts of items not typically found in Common Law. Section 18 sets the penalty for Muslims caught gambling at a fine up to 3000 ringgit, or 2-years imprisonment, or both.
Malaysia Gambling Tax Returns
The above is only an example from one of Malaysia’s 13-states. However, each and every state has similar laws. Each state also has an Islamic Religious Affairs Department, whom among other agencies, enforce Islamic Sharia law. Even Muslim tourists are subject to these laws. There have been recent cases of Indonesian and Pakistani men arrested while on holiday for visiting casinos that are legal to about 40% of the population.
Political Climate of Malaysia
This article might misrepresent Kuala Lumpur. This is actually a very friendly city to live. However there are some strange situations here. Since 2000, all video games have been banned in the country. Today there are internet cafés with closed circuit televisions to watch for police raids while games are played inside. In 2010, Malaysian gaming group Berjaya (BGRO.KL) announced it was purchasing a 70% stake in Ascot Sports Sdn Bhd for 525 million ringgit. It was claimed Ascot had been issued a license to launch sports betting in Malaysia. Soon later there were protests and shortly after that the government denied any such license had ever existed.
This is all best explained as: in Malaysia we have many Muslims opposed to gambling. There are constant outcries and protests even over the legal forms of gambling we have already. It was said in a news article not too long ago that it seems every couple days the police are launching a new attack on Chinese gamblers. This explains it well from my perspective as daily something or another is being protested.
Online Gambling is Easier
Malaysia Gambling Tax Refund
The good news is it still possible to use overseas online gambling sites from the privacy of one’s own home without issue. For example www.bodog88.com is a post up betting site based in the Philippines that offers casino, sports betting, poker and Mahjong to Malaysia residents.
Players can deposit online or at the ATM using direct bank transfer. When they win, cash outs can be requested to the same method. The banks supported by Bodog Malaysia include Maybank, Public Bank, CIMB, RHB, Standard Chartered Bank, Hong Leong Bank, Affin Bank, EON Bank, Alliance Bank Malaysia, AmBank, Citibank, OCBC Bank, HSBC Bank, and United Overseas Bank.
In a country where the next gambling protests seem always around the corner, using gambling located in the Philippines from one’s own home is stress free and a much welcomed change.
Malaysia Gambling Tax Credit
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