18 April 2010

Sports Betting: Kaki Bola to Kaki Judi?

Recently, market talk has increased on the possibility of an approval of a sports betting license in Malaysia. What? Malaysia? YES

Introduction to Sports Betting…
For “kaki bola”, sports betting definitely not a strange activity for them – I am not saying that every ‘kaki bola’ also bets. As long as there was demand, almost any kind of sports in the world can become a common interest for betting. Example, tennis, baseball, badminton, golf, F1 racing, and even sepak takraw… Of course, we can not left out world’s most popular sports – football. According to some estimates, the illegal gaming syndicate market size is about RM10 billion, similar to the current 4D market size, of which the majority is from sports betting.
  
Further liberalization of gaming industry?
In Malaysia, 4D is the only legal betting activity that existed, besides going up to Genting Highlands. On the whole, further liberalization are positive, given that this would help enlarge the government revenue pie by taking market share from the illegal.

As soon as before World cup 2010?
I do not think that it can be implemented so fast because this must be brought-up to Cabinet for approval (a very complicated place now).


Sports betting a new opportunity for betting company?
Not necessarily. It all depends on how it is being implemented. The main issues were:

  1. the extent of restriction being imposed by government
  2. high prize payout ratios involved 
  3. gaming taxes to be borne
  4. agent commissions to be paid
  5. sports betting is much more complicated than normal 4D betting

The prize payout ratios for sports betting are very high, at 90-95%. Depending on the type of sports betting allowed, the prize ratio would vary. Example, a win/lose/draw system, as practiced in Singapore, got a lower prize payout ratio than betting on an odds system.
  
I believe that government would not allow an online betting system, as this would involve a whole set of other risks and control issues, like currency exchange. As such, the license would likely be for betting via the existing 4D outlets with a win/lose/draw system. This is because an odds betting system, with live features, must go through the un-control-able online mode, which is not encouraging.
  
However, win/lose/draw betting is NOT so popular to punters, given the more exciting nature of the odds system of betting available in the illegal market. Convenient wise, this would lose out, as punters had to place a bet physically at 4D outlets, as compare with a phone call in illegal market.

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