Illegal gambling in Malaysia is broadly defined as gambling in a public gaming house, or even private gambling in a private residential area or within a community center, and all the crimes carries with it a fine of either RM5,000, or a prison term not less than six months, or both. These laws are enforced by the Malaysian Government through the Generalboch Malaysia (GCM) – a statutory board which modifies and implements national laws, including the Anti-Gambling Act 2021. The GCM enacts the Unlawful Activities Act 1985, which covers gambling. A number of other acts have also been included under the legislative area of the GCM; these include sections 5 and 6 of the Sarawak Wholesale Distributor Act 1985, and the Local Government Act 1985.
These laws are designed to discourage the commission of gambling and other unlawful activities by ensuring stiff penalties for offenders. The penalties range from a heavy fine for the first conviction, up to a suspended licence and a fine, or even both, for subsequent offences. For example, in April 2021, the government announced the suspension of the registration of two Malaysian companies, Limah Stadium International and Limah Stadium Limited, because they had not paid taxes on their gambling activities in time. They were due to pay their share of the taxes by the end of that month. The companies are expected to pay the tax by September 30.
The law on gambling also covers gaming by non-residents of Malaysia, foreigners, minors and non-residents who do not have a fixed address in Malaysia. The law also covers gambling in other states of Malaysia, including Borneo, Cameron Islands, East Malaysia and Timor-Leste. If any one of the parties is found to be involved in an illegal gambling activity in Malaysia, then he will be punished by a penalty act. In order to bring about a conviction of an offender, the Attorney General needs to file the case with the Registry of the Secretary of States.
Some jurisdictions have become more proactive in combating illegal gambling in Malaysia. These jurisdictions have developed a task force, which is responsible for developing a strategy to prevent, combat and minimize the problem of online gambling in Malaysia. For instance, in 2021, the law on gambling was amended in the form of an administrative order to amend the existing penal code on gambling. The order came into effect on the enactment day and covered all aspects of the regulation of gambling in Malaysia. Some additional elements of the order were included to strengthen the regulation of online gambling in Malaysia.
According to the amended law, all gaming licence applicants who do not have a fixed address in Malaysia, and who do not comply with the stipulated requirements in the application procedure, shall be considered as illegal gambling operators. In addition, all licensed gambling operators and managers involved in the preparation and management of gaming events in a public place are liable to be held liable for up to two years in jail. Similarly, all individuals who have a criminal record which is not appropriate, shall be considered as illegal gambling operators. All officials of government departments, who failed to prevent, suppress or eliminate the illegal operators from their areas are liable to be fined up to five thousand ringgits (Mringi). Moreover, all properties which are used for gambling or which are kept by illegal operators and their family members are confiscated.
The authorities have realized that they cannot close down the illegal gambling centers on their own. This is because the mass market of Malaysia is huge and the majority of the population supports these activities. Therefore, the authorities have introduced tough penalties for illegal operators to ensure that they do not operate beyond their means and encourage others to patronize the common games. These include by increasing the price of gambling tickets, by outlawing the use of pictorial or audio aids to aid in the games, by increasing the quantity of stamp duty charged by operators and by prohibiting the distribution of gambling pamphlets and reports.
On the other hand, the authorities are cracking down hard on persons indulging in online gambling even though they are within the country. Several cases have been lodged against persons who indulge in online gambling and they have also been tried in court. These include two high profile cases, namely that of the Malaysian Anti-Gambling Commission (Maclean Gambling Commission) and the Southern Bankruptcy Service (SBS), who had both brought legal actions against several individuals and companies over their involvement in online gambling.
The increasing incidence of malpractice and corruption within the Malaysian legal system and the increased rate at which criminals are being found, has led to the popularity of offshore gambling centres in Malaysia. Gambling is a criminal offense in many countries worldwide and is punishable with imprisonment, heavy fines and repossession of property. However, in Malaysia, gambling is not illegal but some local organizations and individuals to circumvent the law by allowing gaming not only on land-based casinos but also over the internet. In this case, the players pay a certain amount of money as registration fees and bet using their credit cards or debit cards. This allows them to engage in gambling online in countries where such regulation is not applicable, i.e. in Malaysia.