IT is undeniable that lottery sales contribute to the country’s GDP.

The Malaysian Lotteries Act 1952 (Act 288) defines lottery as “any game, method, scheme or device whereby money or money’s worth is distributed or allocated in any manner depending upon or to be determined by chance or lot”.  Thus, the word “gambling” is not used to define lotteries by number forecast operators (NFOs) such as Magnum 4D, Damacai, and Sports Toto.

All NFO players shared one trait – the belief that they are able to beat the odds and win the jackpot, by skill or by chance. Their personal conviction reinforces their perception that playing the lottery is a risk worth taking even if it means spending their income and savings. NFO players, who are predominantly low- and middle-income earners, tend to spend a substantial amount of their pay on lottery tickets and in some cases this expenditure becomes part of the household budget.

A central attraction of seems to be that everyone, regardless of their skill, education or family background, has an equal chance of success. 

The consumerism of these NFOs are it stir people’s emotions with subliminal messages such as ‘it is easy to win big money with lotteries” in news reports which encourages the public to buy or to continue to buy lottery tickets with prospects of big win. They participate because they largely overweight their small chances of winning.

Lotteries from NFOs are seen as the only way for the low- and middle-classes to legally escape poverty and indeed, lottery sales rise with increases in the poverty rate. People purchase more lottery tickets when they are reminded of the equality of chance. 

Considering that the poor are the most likely to buy lottery tickets, the government raise taxes to create new welfare measures to support those who lose too much money by playing these games. This clearly means that gambling can be equated with drugs and alcohol, in terms of its potential for causing serious damage to the fabric and wellbeing of families and communities. 

When it comes to assessing the relationship between gambling and illegal activities, since lotteries can be seen as a legal form of gambling they probably promote a shift from illegal to legal practices, contributing to the reduction of the crime rate inside society. Nevertheless, the fact remains that illegal gambling is never totally eliminated by having access to legal and sometimes state-sponsored lotteries.

In every society, we find more gamblers than non-gamblers, which leads to the consideration that the act is normal in itself, like every social practice that exists, persists across the ages, and becomes institutionalised. Older people buy more lottery tickets than the young and purchases are generally negatively correlated with income and education.

Even though religious belief does seem to lower gambling participation, gambling is also seen as functional to a society. In Spain, demand for lottery tickets is exceptionally high due to the tradition amongst the citizens which has a widespread tradition of sharing lottery tickets by playing in syndicates among friends, relatives or colleagues, not primarily out of economic reasons of maximising their chances, but mostly to establish cohesive social groups and to maintain friendships.

In a study predicting gambling patterns in Australia in 2003, using a regression model, the study concluded that participation in lotteries in Australia is strongly influenced by age, ethnicity and household composition. Whereas in an another study conducted earlier in Germany in 1997 to estimate the individual pattern of legal gambling in that country, the results point out that income, in Germany, has a positive and significant influence on the participation in most lottery games, suggesting that gambling is a widespread consumption good.

A study by the Max Planck Institute in Germany revealed that lottery participation serves as compensation for and release of tensions arising from social inequalities and feelings of deprivation among society members.

Another study conducted by a university in Portugal concluded that every increase of 1% of a country’s education index leads to a decrease of about 3% of total lottery sales, people in the age group of 65 and older are the greatest consumers of lottery products, while the young between 15 to 29 consume the least because they preferred instant games.

Effectively, racial culture doesn’t play a significant role in class-based gambling. Those who lack autonomy and express feelings of futility about their everyday routines spend significantly more money on lottery tickets, a fact which has been consistently affirmed in a lot of qualitative studies. 

Gambling diverts players away from making real efforts to reduce their disadvantaged positions for upward mobility that could lead to less investment in education, fewer community activities, or greater numbers of non-voters.

In summary, gambling is significantly bound to social contexts and structure and not a cultural trait tied to a particular race as expounded by politicians on both sides of the divide in questioning the decision of the Kedah government not to renew premise licences to the operators in Kedah upon their expiry.

Strangely, the 4D game is believed to have originated in Kedah, based on evidence during a gambling trial in a Singapore court in 1956, in which a detective from Penang was brought to Singapore to testify as an expert witness in the case of a family who had been caught running an illegal gambling operation there. According to him, the lottery originated in Kedah in 1951, when a schoolboy raffled off his bicycle with tickets containing two-digit numbers. The winner would be the  ticket number matching the last two digits of the first-prize ticket in a Malaysian Turf Club sweepstake.

This issue of the Kedah government not renewing the licences of the NFOs would only drive players to buy from illegal betting syndicates. As it is, illegal syndicates are reported to take a big chunk of the legitimate NFO business away and cause the government to lose some RM3 billion in tax revenue annually. The activities of these illegal 4D operations have grown bigger and more sophisticated over the last decade; participants can now even buying via WhatsApp.

Revenue from the NFOs is estimated to be RM9 billion with a sales tax amounting to about RM2 billion annually for the country. And illegal 4D operations are rumoured to be one and a half to two times larger than the legitimate NFOs, which means the government could be losing up to RM3 billion per annum in taxs.

Silence from the federal government is a sign of acquiescence to the Kedah government’s decision. 

Where does the federal government expect to find new sources of revenue to replace those from the 45 shops run by the DaMaCai, SportsToto, and Magnum franchises in Kedah? – November 21, 2021.

* FLK reads The Malaysian Insight. 

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.