The Contribution of Gaming Taxes to the Malaysian Economy

Today, gamblers in Malaysia have specific laws which restrict land-based betting in public places. The Betting Act of 1953 determines the regulations of this industry and prohibits a range of activities. But when we are talking about the online area, it doesn’t fall under these laws since they can’t be considered gambling houses specified in the law. This way, Malaysian gamblers can access online gambling with attractive conditions.

For example, players can make fast payments via e-wallets like PayPal. The rating of PayPal casinos on CasinosData displays gambling venues where players can use this payment option and access detailed reviews covering all the other essential aspects like transaction limits, support, and bonuses. Due to this variety, the gambling financial sector in Malaysia boasts a massively growing revenue to influence the country’s economy.

Background Information on Gambling in Malaysia

Here in Malaysia, players have been gambling for years. These were craps, card games, betting on sports, and other types. However, the Betting Act 1953 determines all these forms illegal. When players see a local online gambling site, it isn’t regulated by local laws or international authorities, which makes it risky to gamble on such platforms. Offshore online casino sites serve as a safe alternative. Besides, the government hasn’t prohibited lotteries and 3 horse racing courses for betting, which are Penang, Perak, and Selangor Turf Clubs.

Overview of Gambling Taxes in Malaysia

According to IAGA, casino duties increased from 25% of gross gaming revenue to 35%, while gaming machine duties rose from 20% to 30%.

Attracting more taxpayers has several solutions, one of which is to draw tourists. For instance, in 2019 alone, 26.1 million visitors spent a collective RM86.1 billion within the country. The Genting Casino—a legal gambling attraction regulated by the government—was visited 28.7 times that same year and ended with a total group revenue of RM1041bn and a net profit of RM13bn.

Impact of Gambling Taxes on the Malaysian Economy

Statistically, the Gaming Networks segment is expected to come to US$13.27m in 2023. This approach is certain to show an annual growth rate (CAGR 2023-2027) of 9.72%. This is the first way to increase government taxes from the following revenues. Besides, there is another way for the country to benefit from the industry. When an operator wants to work in Malaysia, it needs a local license.

This sector also saw changes, so the current price is RM150 million for the annual casino license and RM10,000 for the machine dealer’s license. Moreover, the regulated gambling industry minimizes the unemployment rate in the country. For example, in 2019, it decreased from 5.3 to 3.3. Among the partners of legal casinos operating in the country, there are other public organizations with services for locals. One of them is Genting SkyWorlds Theme Park which is a part of the Genting Casino Group.

Arguments for and Against Gambling Taxes in Malaysia

The idea to make gambling taxable sounds good to increase the country’s income and make the industry more transparent. However, to do this, it’s necessary to determine the position of online gambling which is now somewhat controversial. Plus, the country needs to update the regulations so that they meet the modern standards and needs of gamblers. And finally, the country should legalize more gambling forms to make this market more attractive and profitable for the government.

Pros:

The incomes can be increased by both local players and tourists
The industry keeps on growing, which makes this market beneficial
There are local licenses for operators providing gambling services in Malaysia

Cons:

Some players may prefer to hide such incomes
There should be more regulations regarding online gambling

Public opinion shows that the country can charge taxes, but it should simplify the rules to access the industry first. For example, allow online transfers like at PayPal casinos on CasinosData, provide space for more gaming forms, and make the withdrawal process just as simple. This way, the expected number of 1.08m users by 2027 can be even larger, which will positively influence the contribution of gambling taxes to the Malaysian economy.

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