Tuesday, June 29, 2010

Opinion - Sports Betting

I have been quiet on the Ascot betting license fiasco. Trying to get more info and facts first. While Vincent Tan may have erred in announcing the news a tad earlier, he did have a letter. However, he should have been more careful, knowing this is a time bomb and won't be easy to railroad the thing over. Should B Group be penalised by Bursa/SC on this. Well, yes and no, though I would sway towards "yes". Listed companies should be more careful when making announcements, in particular when it comes to market moving announcements. It has to be a yes owing to the amount of shares traded and the share price volatility after the announcement and its subsequent retraction.

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No, because the company did have a letter, but it would have been wiser to highlight and underline (again and again) that it was a conditional thing.

Back to the issue on hand, should we have legalise sports betting. Yes on all accounts. Its like prostitution and casino gaming. For prostitution its not legal but it carries on. We are just fooling ourselves if we think not legalising will dampen the activity. Casino gaming is legal, but I am sure some bits of it still carries on illegally in small gaming dens. That is not the point, the point is the bulk of the casino gaming would have surfaced to the legal top and the country gets a tax on it. Want to guess how much in tax receipts the government has obtained from Genting and the 4-D listed operators for the past 20 years!!!

Sports betting is about the last bastion. Not legalising it will force much of the revenue and tax receipts to flow to the international betting sites anyway. Its like locking up your virginal daughter in her room 24 hours a day but she has a secret passageway to be naughty anyway. Why keep up appearances? 'She' is not going to be a virgin anyway, you'd be fooling yourself telling everybody otherwise.

Legalising it (including prostitution) will help not just in tax receipts but allow the government to regulate and monitor the activity. For example in prostitution, the government could force all "service workers" to go for monthly health checkup for proper certification so that fatalistic diseases would be kept at bay. If there is legalised sports betting, you would close off a large portion of the black market and push human resources back to the mainstream economy. Most would not bet with bookies if they have a CHOICE. There is none at the moment.

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If you do decide NOT to legalise, then by all means possible show the country that you can eradicate the problem of illegal betting by hook or crook. If you do not legalise prostitution, then make bloody sure they will find it hard to exist - now I think too many of the spas, karaoke joints and even hotels front as prostitution joints. Prove to me otherwise. By not legalising it, you basically give those who are supposed to enforce more room and booty for "bribes" and "grease money".

I find Vincent Tan's claims that the illegal bookies spent millions to fund a campaign to nix the Ascot deal, believable. Organised crime is more organised than you think. Take the pirated DVDs business. For Chinese movies, you can get almost all pirated versions in the marketplace BEFORE it gets to the cinemas .... EXCEPT if the movies were produced by these two companies (check it out, they will only appear as pirated DVDs after they have been on the screen for 2 weeks): Media Asia and Emperor Group ~ go figure the rest ...

Despite the so called clamp down on football betting, I am pretty sure I can easily place my bets with a couple of phone calls, and so can everybody. Not legalising and no/poor enforcement makes for a man with a very weak argument or defence.

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This should not be a question of morality or social values. This is a question of pragmatic and proper governance with a firm grasp of reality. I do agree that one cannot and should not impose their moral values on the rest of the nation, but there is also a line somewhere, I mean you cannot be legalising heroin just because some people will do it anyway. Trying to find that line is very difficult I agree. Unlike heroin or LSD usage, sports betting is more pervasive and more "acceptable" globally, thats all I can say.

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Malaysian Insider / KUALA LUMPUR, June 28 — Tycoon Tan Sri Vincent Tan today accused illegal bookmakers of spending millions of ringgit to fund a campaign to torpedo his plans for legalised football betting, and would wait for the right conditions to revive plans, gaming analysts said today.

He also told gaming industry analysts that Pakatan Rakyat (PR) was to blame for the Najib administration’s backtracking, and alleged that illegal bookmakers had spent between RM100 million and RM300 million to smear his attempt to introduce above-board football betting.

Illegal bookmaking activities in Malaysia are estimated to be worth up to RM20 billion a year.

Tan said this at a luncheon with about 40 gaming analysts, where he was also said to have shown them a Finance Ministry letter dated Jan 13, 2010 that gave him conditional approval for the licence.

However, sources who saw the letter said the conditions made no mention of the government having to first gauge public support and that they had essentially been fulfilled.

A Berjaya Corp press statement released earlier today said the company was extremely disappointed at the government’s decision not to re-issue the licence “despite having granted its approval for the re-issuance of the same” — a phrase which was underlined for emphasis.

Berjaya Corp reported that the government had last month re-issued the licence to Tan-owned Ascot Sports Sdn Bhd after the original licence was cancelled by the previous Abdullah administration.

The gaming, property and hospitality group had told Bursa Malaysia in a May 12 filing that it intended to acquire Tan’s 70 per cent stake in Ascot for RM525 million. The tycoon’s son — Datuk Robin Tan Yeong Ching — would have retained control of his 30 per cent stake.

Tan had first obtained the licence in 1987 but had “asked the government to take it back” when the venture was unsuccessful while retaining the right to get the licence back.

His most recent attempt to revive long-suffering Ascot — which posted a loss of RM4.6 million at the end of 2008 — ran into a concerted hail of criticism from opposition parties who managed to turn the issue into a national talking point on the back of apparent anti-gambling sentiment.

Tan-controlled Berjaya Corp had planned to offer football betting services through the telephone and at selected Toto outlets nationwide.

It is understood that the tycoon had spent a considerable sum in preparation for the start of play in European football leagues this August.

The licence itself is said to be worth RM10 million, an amount which was refunded to Tan following the government’s capitulation to public opinion on Friday.

Sources said Tan had used the money to obtain a bank guarantee worth the same amount as a first-right-of-refusal claim, and suggest that he is biding his time until conditions are more agreeable before attempting to launch the football betting service again.

It was also revealed during the get-together with analysts today that after Ascot’s licence was withdrawn in 1990, RM8 million in licence fees was refunded to the company by the Finance Ministry and that it was also given compensation of RM10.9 million for sports betting equipment by the Totalisator Board.

Tan’s meeting with gaming analysts from both buy and sell sides this afternoon is seen as a move to repair his company’s image after Berjaya Corp shares were battered today at the start of trading.

Trade was resumed at 10am after a one-hour suspension on trading following Berjaya Corp’s announcement that it was calling off plans to acquire Ascot.

As at 4pm Berjaya Corp’s share price was down 14 sen from its opening price to RM1.22.

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by Dr. Lim Teck Ghee
Centre for Policy Initiatives
27 June 2010

Life as a gamble

The cabinet decision not to issue a sports betting licence to Ascot Sports Sdn Bhd is the right one but it was made for the wrong reasons. According to prime minister Najib Razak, the reason for not legalizing sports betting was “the impact it will have from the perspective of religion and politics.”

To get a proper perspective of the issue, it is necessary to get off the religious and political high horse and acknowledge that we are a nation that loves the occasional flutter. And also let us admit that there’s nothing wrong with gambling so long as it is not taken to extreme lengths and becomes a pathological, compulsive or destructive habit.

In a sense, all of life and the various decisions that we make are gambles. Although it may be too much to say that we all have gambling in our genes, scientists have been debating on the extent to which gambling is a manifestation of human behavior for a long time – at least during the last 200 years or so.

In an article, ‘Human Behavior and the Efficiency of the Financial System’ (February 1998) Robert Schiller, the noted financial economist, wrote that “a tendency to gamble, to play games that bring on unnecessary risks, has been found to pervade widely divergent human cultures around the world and appears to be indicative of a basic human trait.”

Further he pointed to studies that estimated that 61% of the adult population in the United States participated in some form of gambling or betting in 1974. They estimated that 1.1% of men and 0.5% of women are “probably compulsive gamblers,” while an additional 2.7% of men and 1% of women are “potential compulsive gamblers.” These figures are probably much higher today.

Similar numbers are recorded in all the highly developed countries whose status the country aspires to. All the countries that our elite regard as role models whether in the East or West, North or South take a liberal position on gambling or gaming as it is sometimes referred to.



9 comments:

kl said...

Against your pro-sports betting arguments, I have the following serious objections:

1 Legalizing sports betting will make it even more pervasive, accessible and acceptable. Minors will get influenced at an early age to their detriment. Gambling and its ill effects on Malaysian family life have not been seriously studied but anecdotal evidence is compelling in many cases. Note the obscene profits of the gaming companies each year.

2 Why privatize license to only one particular party already entrenched in gaming? Why not the government set up a special board to run it? Or open the process to all to tender? Who benefits most?

Soon Hui said...

Dali, I agree with that you said, I agree that sports betting should be legalized.


The problem with current way of legalization is that, the government singlehandedly, without tender and transparency awarded the license to one and ONLY one man, Vincent Tan. This is the problem.

A proper way to do this is to award the betting license through open bidding.

K H said...

I know a few friends and relatives who have lost more than their shirts on their back due to gambling.

I can't understand how people can get addicted to gambling. What make them tick?

Anyway, this is coming from a guy who did not watch a single current World Cup match and thinks football is over-hyped and boring.

ronnie said...

What is open bidding ? A certain party placed out a jot of shares at high prices to funds who are now crying murder. The investment bank involved is claiming it was misled.

ronnie said...

What is open bidding ? A certain party placed out a jot of shares at high prices to funds who are now crying murder. The investment bank involved is claiming it was misled.

brotherlone said...

not sure if anyone saw this ..

300m shares of bcorp were exchanged off market few weeks before the announcement... sparking off the rally...

now najib looks good to the public afters shooting down the proposal

vincent tan also looks good in an attempt to benefit shareholders with sports betting, but failed cause it was denied by the government

bigger losers are investors who came in late..which are mostly retail investors

'all the world's a stage, and all men and women are merely players' shakespeare

eggman said...

Your argument is base on the assumption that most Malaysians are going for sport betting whether it is legalized or not. It might not be true.

Legalize the activity will attract the majority to participate in sport betting, just like casino betting.

Andrew said...

Of course, there's that "conspiracy theory" that the govt is legalizing sports betting to bankroll their next election campaign ...

Andrew said...

Of course there is that "conspiracy theory" that the govt is legalizing sports betting to bank roll the next election campaign ...