PETALING JAYA (THE STAR/ASIA NEWS NETWORK) - Illegal betting syndicates take a big chunk of the legitimate Number Forecast Operators' (NFO) business away and cause the government to lose some RM3 billion (S$980 million) in tax revenue annually.
A source in the gaming industry said the activities of these illegal 4D operations have grown bigger and more sophisticated over the last decade, eating up market share by the day.
"These illegal 4D syndicates do not only offer bigger cash prizes compared with the legitimate NFOs but extended credit and allowed online buying via WhatsApp on draw days," said the source.
In Malaysia, there are six licensed NFO. Three of the operators - Magnum, Sports Toto and Damacai - are based in Peninsular Malaysia while the other three - Special Cashsweep, Sabah88 and Sandakan4D - have extensive operations in Sabah and Sarawak.
The source said revenue from the NFOs was more than RM9 billion with sales tax amounting to about RM2 billion annually.
However, the source said the illegal 4D operation was known to be 1½ to two times larger than the legitimate NFOs' business and, hence, the government could be losing up to RM3 billion annually.
Because it is a lucrative business, where the payout for a winning number is 70/30, meaning for every RM1 4D sales, 70 sen would go for the payment of the winning numbers while the operators make 30 sen, these illegal operators are often connected to the underworld or triads.
"They make much more than the NFOs because they don't pay tax, " said the source.
The source said the syndicates also pay good commissions of between 20 and 30 per cent to illegal 4D runners.
"For full-time runners, they can make between RM3,000 and RM10,000 a month, depending on their locality and credit given to punters, " said the source.
The source said even part-timers, who did small-scale operation within their neighbourhood or office, could make between RM500 and RM1,500 a month in commission.
The source said these punters were also being looked after by the syndicates if they were caught for the illegal 4D activities.
"The syndicate will have a third party to bail them out from the police and even pay their fines if they are charged in court.
"They would also be compensated if they are apprehended by the authorities and jailed," said the source.
The source said because the illegal 4D business has several layers of middlemen and runners, it would be difficult for the enforcement authorities to track or identify the real masterminds. Those caught are normally runners and middlemen who are willing to take the fall and blame for the syndicates' masterminds, as the law is not stern enough to discourage them from being involved in the illegal activities.
Under Malaysia's Common Gaming House Act 1953, a runner can be fined between RM20,000 and RM200,000 and jailed up to a maximum of five years if they are caught and convicted, while buyers can face a maximum of six months' jail or fine of up to RM3,000 or both, if convicted.
But over the years, said the source, many of those arrested received only light sentences, slapped with only a few thousand ringgit fine and escape without having to serve a jail sentence.
"With the syndicates willing to protect these offenders and pay the fine, considering the lucrative money they make from the illegal activities, the business continues to strive," said the source. "The only way to stop them is to impose a higher penalty and tougher jail sentence for both the sellers and buyers."