Sports betting: Will the government fold or stay?

MAY 7 — At first I thought it was the heat getting to my head because I must be hallucinating, reading news reports about the government considering the award of a licence for retail sports betting in Malaysia. Then I realised it was for real.

With the breaking news making the rounds online by yesterday evening, it would probably have made the evening editions of most Chinese-language dailies last night, and probably the morning editions of all such dailies today. I dare say, many of them would be carrying the story on page one.

But I seriously doubt the Bahasa Malaysia newspapers will even give it a mention, let alone a whole story. It just wouldn’t play to their Muslim readership base, especially not when there’s juicy anti-PKR, anti-Anwar and Zaid-bashing stories to report (and I use the word “report” very loosely here).

So, as much as I think it is virtually laughable for the government to consider awarding a sports betting licence (a licence that was first issued back in 2003 and then suddenly “revoked” in 2004) with the current political climate, following the political tsunami of March 2008, it is interesting to note the spin that has already started to come out from the powers-that-be.

That Deputy Finance Minister Datuk Dr Awang Adek Hussin made the statement in question definitely lends a lot of credence to the possibility that a U-Turn in policy was coming.

Not surprisingly, he backed up his statement with some justification over having to contain the spread of illegal betting activities during the 2010 Fifia World Cup (June 11 to July 11). Is he taking us for fools?

Firstly, I must clear one misconception over the type of licence involved here. This sports betting licence, if it is ever issued by the government, is for retail sports betting and will only be applicable for wagers (bets) made on Malaysian soil and in person (the punter) with the outlet (licenced sports betting operator), over the counter, just like it is done for the numbers betting.

There is no provision for an online sports betting licence by the Malaysian government because Malaysia is not an online gaming jurisdiction.

So, with that in mind, it is simply too late now to make a difference to the underground World Cup betting activity in Malaysia by awarding a sports betting licence this late in the game.

Even if a licence was awarded by the government tomorrow, there simply would not be enough time to allow for a company to be ready to start taking bets by June 11.

Yes, the tournament is still 35 days away, but unless the government is going to award a retail sports betting licence to an existing underground player in the sports betting realm, that is, to literally turn them from “black” to “white” overnight and convert their agents to “shops”, I believe that the first legal retail sports bet to be placed in Malaysia is still at least six months away.

There is a lot more to starting a retail sports betting operation than most people realise, not to mention how much investment that’s required even before a single bet is taken.

Even in 2003, though the licence was awarded to Tan Sri Vincent Tan’s Ascot Sports by the end of the third quarter, no retail sports betting IT system was in place even up to May 2004. And that being the year of Euro 2004 — the European Championship held in June once every four years — it would have been imperative to meet that deadline to recoup the investment with a launch during a major tournament.

That’s just the retail sports betting IT system. It does not take into account the renovation to existing Sports Toto outlets. This is because there are many constraints to opening new betting shops.

Most of the shops you see are those which were in existence before the tighter regulations were put in place in the 1990s. So, part of the agreement with the Berjaya chairman was that the existing Sports Toto outlets be customised to be able to take bets on numbers and sports, too.

For the record, does anyone really doubt that the aforementioned local tycoon is going to receive the sports betting licence again, if it is indeed awarded?

It could be third-time lucky for Tan, who was originally issued the licence in 1988, and again in 2003. He had first right of refusal after the licence was mutually terminated in 1990.

After quietly (though reluctantly), accepting the government’s revocation of the same licence in 2004, it is only logical that the Najib administration reward the tycoon for his loyalty all these years, especially during the reign of former prime minister, Tun Dr Mahathir Mohamed.

It will be a very risky, if not desperate, move by the ruling party to award the retail sports betting licence, considering the political fallout, but it may also be a way to go for broke.

The gamble (pun intended) might be well worth it, with the government possibly calling for general elections within the next 12 months. The recent Hulu Selangor by-election showed that it might be more bread-and-butter issues that are important to the people, rather than the issue of graft, discrimination and large-scale scandals.

Sports betting will just be “sold” by the ruling party as a necessary evil for the economic growth and progress of the people and the nation.

One clue that may indicate that the matter of awarding the licence and to whom, is already coming to a conclusion soon — the news of Tan’s impending investment in English League Championship side, Cardiff City.

One does wonder, since when did Tan Sri Vincent Tan take an interest in a football club from Wales?

With football betting is likely to be 90 per cent of the business in any licensed sports betting operation in Malaysia, gaining credibility in the European football market by virtue of owning a club will be most advantageous, even if it is only Cardiff City.

How he uses it to his advantage is left to be seen, if it is revealed at all.

* The views expressed here are the personal opinion of the columnist.