M’sia might lose billions from Kedah gambling bans. Here’s how.

On 14 November 2021, Kedah’s Menteri Besar, Datuk Seri Muhammad Sanusi announced that the state government would no longer issue new gambling licenses nor renew them starting 2023, which means beli nombor 4 ekor is currently no longer a thing for Kedahans.

Going up north a little, Perlis seems to be looking to do the same thing. Both states’ Menteri Besars cited social ills such as domestic violence and theft arising from the activity as the main reason, and everyone will be better off once sup empat ekor is off the menu.

“…Some within the community and their family members were scattered because their fathers were addicted to gambling, (they) come home and hit their wives and children, pawn off their valuables and steal money just because they’re crazy about gambling,” – Sanusi, translated from Berita Harian

That sounds reasonable… on the surface. We’ve all heard stories of people drowning in debt after borrowing money from ah longs to fuel their habit and they end up dragging their families along with them. But is it true that we are better off without the lottery, though? As you’ll see later, things might not be so clear cut. First, let’s talk about…

How much money will Kedah actually lose from banning 4D?

Sanusi was reported as saying that the state only received about RM400,000 in taxes from lottery outlets in 2021, and he would’ve upheld the decision even if the state received RM400 million a year. We’re not sure how Sanusi arrived at the figure, so we took a look at the annual reports from Sports Toto and Magnum 4D (Damacai doesn’t seem to publish annual reports) to try and figure that out.

Having done that, we sussed out that Sports Toto and Magnum 4D only paid a total of RM1.937 million in income tax to the Malaysian government in 2021. Divide that by 14 states and you get about RM138K per state. From that, Sanusi’s figure seems a lot higher than average, especially since it is Kedah after all.

Then again, Sanusi might have included profits from special draws done by 4D outlets – essentially extra games on top of the three weekly ones, and a portion of the profits from these special draws go to the government as sin tax. If we add this extra income in, then Sanusi’s figure might make more sense. We can’t be entirely sure if that’s the case, though.

Anywho, RM400,000 might not look like a lot, since that’s only about 0.07% of the RM558.9 million in tax collected by the Kedahan government. However…

Kedah (and Malaysia as a whole) may lose a lot more than RM400K

Sure, there’s negatives that come with the activity – according to a local research paper published last year, people who become addicted to gambling are more likely to borrow money from loan sharks, which leads to a whole mess of other problems.

Still, bad as it is, gambling contributes to the economy through taxes, which eventually goes back to the rakyat in the form of infrastructure and services. A drastic move such as banning it completely can affect the economy more than just lost taxes; by affecting investor confidence.

According to The Edge, there was a RM3.38 billion drop in Bursa Malaysia cuz investors thought that it was a bad idea to invest in alcohol and lottery companies after PAS’s strong showing in GE15. What’s the point of investing into these companies if there’s gonna be less profit in the future, right?

So, as we mentioned earlier, this isn’t a simple black and white affair. This brings us to the question of…

What can the government do to make the gambling situation better?

Yeah, while gambling does have its downsides, it does have a place in the economy, and no matter which side you sit on the fence, the best way forward might be to put safeguards in place and promote responsible gambling, cuz a blanket ban isn’t categorically great for Kedah or the country.

For example, it is compulsory in the UK for gambling establishments to identify problem gambling risks in their area, like schoolchildren and homeless shelters, and demonstrate how their businesses will handle these risks. Or maybe we can consider gambling education for school children, particularly in areas identified as problematic.

In the meantime, if y’all wanna gamble, best stick to legit avenues like the 4D companies and Genting. Sorry Kedahans, y’all can only go to Genting, we guess.