Malaysia’s Evolving Stance on Online Casino Gaming

March 3, 2025 By Janne Smith No Comments 6 minutes

There are few things more recalcitrant in life than an old law that has outlived its sell-by date. Malaysia’s gambling policy, enshrined in legislation older than most people they now attempt to regulate, is a prime example. The Betting Act of 1953 and the Common Gaming Houses Act of 1953 were written in an era when gambling meant men with rolled-up sleeves huddled around mahjong tables or the occasional clandestine bet placed in the back of a coffeehouse.

Seventy years later, things are somewhat different. A gambler does not need to push open the heavy doors of a casino or lean in and whisper a bet across a counter; they just need to pick up their phone, where entire worlds of online gambling wait at the touch of a screen. And yet Malaysia’s law has remained rooted in the past, frowning disapprovingly at an industry that, in real terms, has already set up shop inside the country’s borders.

Well, of course, the government has perpetually asserted that gambling online is illegal. Raids occur, sites get closed down, and proclamations are issued. But for all that, the off-shore sites continue to function with quiet efficiency, accepting Malaysian players with no obstruction. The reality is evident: the law can damn as much as it likes, but somehow it has lost its ability to prevent. And now, it seems, a question long in coming is finally taking shape in the minds of many—if you can’t prevent something, maybe it would be best to control it instead?

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A Change in the Wind

This is not, you see, a government statement. The government has not come forward and said it is reforming the gambling laws. There have been no policy papers, no triumph speeches, no press releases from ministers. Instead, there is something more muted, more cautious—the feeling that there are some kind of talks under way in private, that the government is at least beginning to consider that regulation might be more possible than banning.

It has not gone unremarked. Industry-observers have begun to read between the lines, noting the subtle but significant shift in tone. And indeed, sites such as  Zamsino.com in Malaysia have attributed growing calls for an open online casino market. The question is no longer if Malaysians are gambling online—they are, and increasingly so—but if it might be better to put protections in place, regulate, and, not coincidentally, begin to reap tax revenues from an industry that now avoids government coffers entirely.

A Losing Battle

Authorities have waged a thankless struggle against internet gambling for years. Sites are shut down, operators shut, and crackdowns announced that one hopes will serve as a deterrent. And yet, in spite of all the effort, nothing actually happens. There is demand, and where there is demand, supply will not be far behind.

It is, to a great extent, a job that can’t be accomplished. The dynamics of internet gambling make enforcement a pretty exasperating business. For every site that gets closed, another pops up. Payment processors shift, cryptocurrency transactions are anonymous, and VPNs render geographical blocks hilariously ineffective. Even if the government had the wherewithal to shut down all the illegal sites—and it doesn’t—Malaysians would have little difficulty accessing offshore sites.

Whereas some other countries have been more pragmatic, naturally. The Philippines, for example, has gone for a model of licensing, regulating online gambling rather than attempting to deny that it’s happening. Europe is replete with examples, also, of states that have moved from prohibition to regulation, balancing player protection with economic benefit. But Malaysia has been hesitant to get in on the act, clinging to a policy that, if we’re realistic, has already lost its grip on reality.

The Financial Case

And let us not forget about money. For all the ethical nuances of gambling, the activity is lucrative. The state sees none of it currently. Malaysians wagering online are not contributing tax revenues to their economy; instead, their revenue exits the country and benefits foreigners with no legislative mandate to return monies to Malaysia.

This would be altered by a regulated market. Deposit limits, responsible gambling programs, and fraud protections for consumers could be imposed. Fees for licenses might be introduced. Operators might be taxed. The underground economy, which operates outside of all government control, would be replaced by a system of control in Malaysia that at least brings some of that missing money back into the public coffers.

Of course, taxation is not a magic bullet. If the government taxes too heavily or sets requirements too tightly, it will risk driving operators back into the grey market. It is, as ever, a balancing act—one that other countries have managed with varying degrees of success.

A Question of Morality

Of course, any talk of gambling in Malaysia must be sensitive to the broader cultural and religious environment. Gambling is, at best, a divisive subject. To some, it is a matter of morality rather than economics or legality, and any attempt to regulate it would likely be resisted by those who see gambling as a social ill rather than an economic windfall.

It’s a sound argument, but a subtle one. The reality is that gambling already takes place and does so in a totally uncontrolled setting. If the concern is harm minimization, then unquestionably regulation better protects people than a blanket denial policy.

The Road Ahead

And so Malaysia comes to a crossroads. Malaysia’s present policy on online gambling is, by most measures, a failure. Regulation offers a choice, one that embraces reality rather than attempting to legislate it out of existence.

But change, particularly in matters so culturally sensitive as gambling, takes time. It begins slowly, in whispers in the dark of closed rooms, in a shift in rhetoric, in the gradual awareness that something previously unthinkable may, in fact, be inescapable.

For the moment, nothing is certain. The government can just continue playing its tough man game, content to let offshore operators reap the benefits of a market it won’t acknowledge. Or perhaps it will do something else, something that recognizes regulation is not permission but an admission of the inevitable.

Either way, the ball is rolling. And in matters such as these, once they are underway, they don’t easily cease.

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