Sports Betting in Malaysia? No Social Cost?

ARCHIVES 2010

By Aurora On May 8, 2010

By legalizing just before the world cup, it will create the perfect storm for gambling-related problem.

by Snowball

I believe the social cost of legalizing sports betting will be far higher than the most aggressive estimate. By legalizing just before the world cup, it will create the perfect storm for gambling-related problem. Why I think their reasoning is flawed? To understand this, we need to tackle the issue of migration of punters from illegal bookies to legal bookies and the creation of new group of sports punters.

Migration of Punters from Illegal Bookies to Legal Bookies

Contrary to popular beliefs, this migration will not happen. Why? This is because the a legal bookies simply could not compete with their illegal counterparts. The illegal bookies have a significant cost advantage over the legal ones. This is achieve simply through not having to pay tax and not having to maintain a physical presence through operating retail shops. So, if there is an all out price war(i.e. offering better odds) between the legal and illegal bookies, the illegal ones will win the price war easily.