Malaysia open to online gaming?

Malaysia has opened its doors to online gaming companies and is offering generous incentives to firms that relocate, according to Philippine market regulator, the Philippine Amusement and Gaming Corp (PAGCOR).

In a memorandum of understanding sent by PAGCOR Chair Andrea Domingo to the Office of the President, she claims that Malaysia is offering a ten-year tax moratorium on condition that at least 30 percent of employees are Malays. The news was reported by the government-backed Philippine New Agency. 

PAGCOR was writing to the government in relation to a 5 percent franchise tax on gross gaming receipts. The memo follows recent departures of several online gaming firms from the Philippines due to the rising cost of doing business there.

Neither PAGCOR nor the Office of the President had responded to requests for comment at the time of going to press. 

In a rebuttal of PAGCOR’s claims on the franchise tax, BIR Commissioner Caesar Dulay said he doubted Malaysia was offering licenses as all forms of gambling are banned.

The statement isn’t true as Malaysia has one land-based casinos, lottery shops (TOTO, Magnum and Damacai), Slot Clubs located at golf-clubs and also horse racing at the turf club.

Malaysia’s Deputy Minister of Communications and Multimedia, Datuk Zahidi Zainal Abidin, recently told national TV3 that the country had seen a huge increase in online gambling activity during the Covid-19 lockdown, despite an ongoing crackdown.

He suggested that it may be better to regulate and tax these operations, as stamping out the activity entirely was proving to be impossible. 

The government hopes to appoint an official government body to monitor, regulate, and tax the appropriate parties, he told the television channel. 

Gambling is divided into three categories: a) Malaysians gambling on overseas websites; b) Overseas people gambling on Malaysian websites; c) Local Malaysians gambling on Malaysian websites. 

“This will be the three parties that will be taxed accordingly. Even though Malaysia is a Muslim country, there is especially a race (Chinese) who loves to gamble. Muslims must be 100 percent prohibited from gambling but non-Muslims can gamble,” he said, according to a translation provided to AGB.