PETALING JAYA: Illegal 4D betting syndicates are raking in revenue of at least RM18 billion annually by moving their operations to cyberspace. This is twice the amount earned by legal operators.
Additionally, the illegal operators do not pay a single sen in taxes, denying national coffers of about RM5 billion annually.
Apart from offering higher prize payouts, the illegal operators also leveraged on the closure of 4D outlets during the movement control order (MCO) at the height of the Covid-19 pandemic by offering online betting based on 4D games drawn in other countries such as Singapore and Cambodia.
It is estimated that over 50 websites and smartphone apps, run by illegal 4D syndicates, have mushroomed in cyberspace.
They offer betting services based on lottery games operated by six legal gaming companies in Malaysia and several based abroad.
Being at a disadvantage due to their inability to obtain government approval to operate in a similar manner, legal operators are reeling from the estimated loss of between 20% and 30% in revenue. A large portion of their punter base has also been lost since the pandemic, wreaking havoc on their business.
A spokesman for a legal gambling operator told theSun that illegal operators have evolved from bookies operating at shoplots to taking up every single avenue available in cyberspace, including popular merchant websites, to reach the public.
He said by going online, they have made it convenient for punters to place their bets at the click of a button at any time, regardless of where they may be. The spokesman said those living in rural areas, where access to 4D outlets is inconvenient or unavailable, were turning to websites operated by these syndicates.
“There are about 1,500 legal 4D outlets operated by three main gaming companies in the peninsula, namely Sports Toto, Magnum 4D and Damacai. Legal operators have a fixed number of outlets they can operate from, while there is no control of websites illegal operators can have.
“The syndicates have made it easy and accept various modes of payment such as credit cards, bank transfers and even cryptocurrency, since they are not regulated.
“They also captured a large share of the market, especially during the MCO when they operated 24/7. Legal operators were growing by between 3% and 5% but are now contracting.”
The spokesman said it was time the government allowed legal 4D companies to keep up with modern times and digitalise by enabling them to operate on online platforms.
He said the legal 4D industry contributes about RM3 billion in taxes while the illegal market, which rakes in double that amount in revenue, evades paying taxes.
“We hope the laws can be more relevant with the current environment, and the websites used by these illegal operators are blocked from operating in Malaysia, with heavier penalties imposed. Currently, there is a lack of clear legislation to prosecute illegal online operators.”
The spokesman said the Finance Ministry does recognise the need to update the laws, and is reviewing it to suit current times.
Two other industry players theSun spoke to on condition of anonymity echoed the spokesman’s comments.
One said illegal 4D syndicates have pinched its regular punters, thanks to the convenience online platforms offer.
“The illegal syndicates are operating full scale and are not being dealt with enough by the authorities.”
He said according to financial analysts, unless legal operators are allowed to go digital, the legal gaming industry will not be able to grow its customer base and recover to pre-pandemic days.
The other said while the government is studying and considering allowing legal 4D companies to go online, it should make more efforts to disable and block illegal gambling websites and apps.
theSun’s request for comment has yet to receive a response from the Malaysian Communications and Multimedia Commission.
