In Sarawak, illegal lotteries ‘stealing’ profits

An illegal gaming counter out in the open at the entrance of a grocery shop in Kuching August 28, 2018. — Pictures by Mukhriz Hazim
An illegal gaming counter out in the open at the entrance of a grocery shop in Kuching August 28, 2018. — Pictures by Mukhriz Hazim

KUCHING, Sept 17 — A coffee shop owner in suburban Kuching is counting stacks of RM100 bills behind his counter.

For the past 20 years, the shop owner who wants to be known only as Ah Fook has always been able to earn a decent living running his old school coffee shop.

But in the last couple of years, Ah Fook has been regularly sporting expensive new purchases like a Tissot watch, gold jewellery, custom-made shirts and new sneakers.

“This will be a good week! I think can make about 12k this month,” he said, chuckling, to his regular customer.

The money he is holding is not from sales of his popular kolo mee, chicken rice, or any of the items sold in the coffee shop. In reality, his extra pocket money is from his side business and is wholly non-taxable; it comes from selling four-digit lottery tickets.

Ah Fook is probably one of hundreds of people who are involved in the illegal gambling operations in Sarawak, and among the tens of thousands who play it.

The syndicate also sets up fake stores like this one selling top-ups and handphones as a cover for illegal gaming in Kuching.
The syndicate also sets up fake stores like this one selling top-ups and handphones as a cover for illegal gaming in Kuching.

All across the state, these unsanctioned lottery tickets can be bought at almost any random outlet imaginable — from coffee shops to handphone accessory shops to sundry shops.

“If you don’t know where, just look for any existing lottery shop like Sports Toto or Magnum, and chances are, the shop next door will be selling lottery tickets too,” said Ah Fook.

In the last few years in Sarawak, there has been a mushrooming of 24-hour convenience stores and it’s no secret that you can probably buy your tickets there.

Spot the difference: An illegal gaming ticket (left) and legal ticket by Magnum 4D (right) in Kuching.
Spot the difference: An illegal gaming ticket (left) and legal ticket by Magnum 4D (right) in Kuching.

Look out for tell-tale pieces of paper that they use as betting slips, a small portable printer the size of a remote control, and a phone that sticks out among the smartphones.

“Many of these so-called convenience stores are a front for this 4-digit gambling bit. They’re probably subsidised heavily by the same people running the gambling but I don’t know who’s behind it. No one really does for sure.

“But we know it’s very popular, I think everyone knows about it by now. I think you can safely assume, for one legal lottery business, there will be four illegal ones around it,” said one of Ah Fook’s punters.

The reason why these illegal lottery bets are popular is simple. It’s cheaper to buy at RM1 per bet, versus RM1.10 at legit outlets and the rewards are about 20 per cent more per winning number.

For instance, the first prize for a four digit “Big” win is RM3,500, RM1,000 more than what the normal legal outlets are offering while the “Small” draw is RM4,800 for first prize, RM1,300 more.

The winning numbers are the same as those of legalised lottery companies — in Sarawak that means Magnum, Sports Toto and Cash Sweep — and a punter can buy the same number across all the companies.

Authorities are aware of the problem and conduct raids sporadically but the operations continue to run.
Authorities are aware of the problem and conduct raids sporadically but the operations continue to run.

“They have an added product too, BOM — which is a RM8,000 pay off for the winning number,” said Ah Fook, adding that it was among the most popular bet.

“When I started selling bets, not many knew about it and some were hesitant. But as word got around and people saw the payouts, more and more people started buying it.”

In the last three years, the gambit really took off in the state and became more widely known.

“They have built a good reputation and rapport with punters. They pay cash almost immediately, and some even have credit terms with their agents. Some of my regulars just WhatsApp me their bets and will pay the next time we meet too. It’s convenient, they don’t even need to leave their homes.

“If they win, they go back to the agent with the winning number or numbers and they will deliver the money to the outlet in cash. It’s a pretty straightforward process,” said Ah Fook, adding that he has a steady stream of regulars and rakes in about RM3,000 a week.

Another advantage of the illegal gambit over the legit lotteries is that anyone is eligible.

“There is no age limit, no religion restriction. So you get Muslims who are not allowed to gamble in official lotteries as well as students buying bets. The operators don’t care either,” he said.

“When someone approached me to start selling bets, I was initially reluctant. I knew it was illegal but they convinced me that nothing would happen,” he said, insinuating that the syndicate had paid for “protection.”

A man buys tickets at a Magnum 4D outlet in Kuching.
A man buys tickets at a Magnum 4D outlet in Kuching.

Authorities are aware of the problem and conduct raids sporadically but the operations continue to run.

“Sometimes, they haul up people for a few hours but I see that they’re brought back and then continue to operate,” said another shop owner in Kuching.

“We were told that even if we had to spend a night in jail, we would be ‘compensated’ to the tune of about RM200 per night,” he said.

Sarawak police have been releasing news of their crackdown on the operations, but a recent check at several townships around the state capital show that the business is alive and well. Some are still operating with betting paraphernalia out in full view of patrolling cops.

The presence of illegal gambling outfits have affected the business of legitimate lottery outfits.
The presence of illegal gambling outfits have affected the business of legitimate lottery outfits.

The problem has meant that legitimate lottery outfits have suffered serious losses.

“The presence of illegal gambling outfits have definitely affected our business. In the last three years, business has gradually gone down. I think up to today, losses can be estimated at about 40 per cent,” said Magnum regional manager Liew Kee Chuan.

“Aside from private lotteries suffering losses, the government also loses out on millions of ringgit in taxes from declining lottery sales,” said Liew.

But the problem does not seem to be going away soon.

“I think as long as there is demand, there will be supply in this case. The police has to really be vigilant and ensure it does not continue otherwise it is just too lucrative to give up,” said Ah Fook.

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