Gambling and online casinos in Malaysia

Malaysia is one of the most religious and conservative countries in Southeast Asia, where gambling is largely banned under Islamic law (Sharia).

However, the country is also known as the home of the region's largest legal casino, Resorts World Genting, located in the mountains near Kuala Lumpur.

Despite the official ban, online gambling is thriving in the "gray zone," and Malaysians are actively playing on foreign sites.

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Legislative framework

Gambling is regulated by several key acts:

1. The Common Gaming Houses Act (1953) is a basic law prohibiting the organization and participation in gambling.

2. Betting Act (1953) - regulates bets and sweepstakes, criminalizes illegal bets.

3. Pool Betting Act (1967) - regulates sports betting and horse racing.

4. Sharia Law (for Muslims) - completely prohibits any form of gambling (maisir).

Key points:

• gambling is allowed only under a special state license;
• Muslims (about 65% of the population) are prohibited from participating in any form of gambling;
• non-Muslims (mainly Chinese and Hindus) can visit licensed establishments;
• online gambling is completely prohibited;
• for violation - prison up to 5 years and a fine of up to RM 200,000 (≈ $42,000).

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Legal sector: Casinos and lotteries

Resorts World Genting

The only licensed casino in the country, opened in 1971.

Owned by the Genting Group and receives more than 10 million visitors annually.

The casino includes:

• more than 3,000 slot machines;
• over 400 roulette, blackjack and baccarat tables;
• VIP lounges and tournament poker areas;
• 7 hotels and Genting SkyWorlds theme park.

Genting annually brings the state about RM 1.5 billion ($320 million) in tax revenues.

Lotteries

There are three licensed companies operating in the country:

• Sports Toto Malaysia
• Magnum 4D
• Da Ma Cai (Pan Malaysian Pools)

They sell tickets offline and via SMS, but online sale via the Internet is prohibited by law.

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Online gambling

Online gambling in all forms is a crime under the Common Gaming Houses Act.

However, in practice, the authorities are not able to completely stop the participation of citizens in international platforms.

Real situation:

• more than 50% of players use offshore sites (W88, 1xBet, BK8, Bet365, Parimatch);
• payments go through cryptocurrencies, e-wallets and P2P transfers;
• VPN and Telegram are used to bypass locks;
• online casino advertising is actively promoted on TikTok and Facebook under the guise of "gaming apps."

In 2023, Malaysian police arrested more than 3,000 people for participating in illegal online games, and also blocked over 8,000 sites.

Nevertheless, gambling continues to function through mirrors and offshore domains.

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Fighting the illegal sector

Control is performed by:

• Royal Malaysia Police (PDRM) - investigating illegal casinos and online gambling;
• Malaysian Communications and Multimedia Commission (MCMC) - blocks sites;
• Ministry of Finance (MOF) - controls licensing and taxes.

Control measures include:

• blocking of operators' bank accounts;
• arrests of underground lottery organizers;
• collaborating with Telegram and Meta to remove casino ads;
• using AI to analyze transactions related to gambling platforms.

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Illegal and shady casinos

Despite strict bans, there are dozens of underground casinos in Malaysia, especially in major cities (Kuala Lumpur, Penang, Johor Bahru).

These establishments are often disguised as cafes, massage parlors or Internet centers.

Players, mostly non-Muslims, bid in cash or via e-wallet.

Illegal casinos are periodically closed, but soon reopen, taking advantage of corruption and demand.

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Cryptocurrencies and iGaming

Malaysia does not recognize cryptocurrency as legal tender, but it is actively used in offshore online casinos.

The most popular assets are USDT, Bitcoin, Ethereum.

Through Telegram groups, players make a P2P exchange, avoiding the control of the central bank (Bank Negara Malaysia).

In 2024, a bill was passed to strengthen the responsibility for using crypt for gambling and online betting.

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Social and religious context

Malaysia is an Islamic state where religion has a direct influence on legislation.

For Muslims, gambling is considered a sin (hara), for which punishment is provided according to Sharia standards - a fine and community service.

However, among the Chinese and Indian communities, excitement is perceived as entertainment and part of the culture.

According to statistics from Asia Gaming Research (2023), about 1.2 million non-Muslims regularly participate in betting and lotteries, despite the restrictions.

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Economic importance

The gambling industry, despite the bans, brings tangible benefits to the economy:

• Genting Group is one of the country's largest taxpayers;
• lotteries provide funding for social programs;
• tourists from Singapore and China bring foreign exchange earnings.

In 2024, the legal gambling sector gave the budget about RM 2.3 billion ($490 million).

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Taxation

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Prospects

Although the government officially rules out legalizing online gambling, economic pressure and increased tourism could lead to partial liberalization.

Planned steps:

1. Introduction of online lottery and esports licenses.

2. Creation of the national platform "Digital Gaming Control."

3. Increased transparency of financial controls.

4. Development of tourism projects based on Resorts World Genting 2. 0.

Experts estimate Malaysia could allow limited online gambling for non-residents under strict supervision by 2027.

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Malaysia is a land of contrasts: strict Islamic laws sit alongside one of Asia's largest casinos.

The state is officially struggling with online gambling, but the demand for excitement and high traffic from offshore sites suggests otherwise.