Tough to regulate online gambling, says economist

Tough to regulate online gambling, says economist

PETALING JAYA: New laws to regulate online gambling would boost the economy and protect young people from becoming addicted, but may hit a snag in implementation, says an economist.

Yeah Kim Leng of Sunway University said regulating and licensing online gambling would ensure that the country does not lose its tax revenue.

However, he highlighted several challenges to control gambling sites operating abroad, outside Malaysia’s jurisdiction.

“The internet is vast and borderless so it would be hard to regulate them according to our laws,” he told FMT.

He suggested that the government agencies such as the Malaysian Communications and Multimedia Commission block these sites, in order to compel them to register if they want to reach the Malaysian population.

His response came after deputy communications and multimedia minister Zahidi Zainul Abidin said there is a proposal to draft laws to licence online gambling as a way to tax such activities in the country.

Zahidi also said the proposed law would allow the authorities to monitor online gambling activities while also collecting taxes.

Yeah also said another problem could lie with the registration of these online gambling businesses. “It would be hard to get them to come forth willingly,” he said.

He said regulating gambling must go hand in hand with educational awareness campaigns particularly with schoolgoing children so that they do not fall prey to online gambling.

Another economist, Center for Market Education CEO Carmelo Ferlito said it was important to clarify if the aim of the proposed law is a “moral punishment” or to increase tax revenues.

“Most gamblers would continue gambling through higher taxes and regulations and the result is that many poor households that gamble are made poorer.

“Bad behaviour like smoking and gambling are addictive. Regulation won’t discourage them. The additional burden won’t be felt by the rich but the poor will get poorer.

“Regulation will only increase illegal activities and the gambling black market,” he said.

However, a rewards-based policy could achieve the same welfare goals without the “nasty side effects” caused by punitive measures such as the increase in illegal gambling activities.

“An example could be a programme and financial support for those who want to quit their addiction especially for the poor segment of the population,” he said.

Mosco Ang, adviser to the Gamblers Rehab Centre Malaysia, said the government should invest in educational campaigns in schools, especially targeting those in Form 6 and college. “Young people need to be aware that gambling could destroy their family, career and future,” he said.

Tax specialist Veerinderjeet Singh said legalisation of online gambling was just a measure to manage the industry so that the businesses will register themselves. “That will also lead to reporting of annual accounts and therefore tracking for income tax purposes,” he said.

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