Internet gambling is big business all around the globe, even in regions where the activity is expressly prohibited by law. In Malaysia, playing casino game over the ‘net is a crime, but that hasn’t stopped countless users from logging on, making deposits and playing online blackjack, slots and other wagering amusements. In an effort to fortify its stance against the activity, the Malaysian government blocked 170 iGaming websites this week, sending Playtech shares into a downward spiral.
Playtech is a leading developer of internet gambling software, producing everything from online blackjack and slots games to poker, bingo and sports betting platforms. Playtech is currently the largest supplier of iGaming software in the entire industry. According to CasinoCity’s online gaming analysts, Playtech powers 299 online gambling websites, making up 9% of the world wide web’s 3,294 known operators.
When the Malaysian government announced its intentions to block 170 online blackjack, poker and sports betting sites, Playtech took a huge hit in the wallet. The software company’s shares immediately plummet nearly 9%, down to 635.5p. A statement issued by Playtech said that it is “monitoring the position closely and, regardless of the potential impact of any changes in the Malaysian market, remains confident of meeting the latest market consensus, following the recent Q3 IMS, for 2014 and beyond.”
As of 2011, Playtech’s records showed that 8% of its revenues were generated by Malaysian clientele. The software developer’s presence has spread significantly throughout regulated Asian and European markets since then, but the blockage of so many iGaming domains won’t go unnoticed in the company’s bottom line.
Playtech’s financial reports for the first half of 2014 showed revenue of €212.4 million, only 35% of which came from regulated online wagering markets. The other 65% was generated from unregulated markets like Malaysia, where online blackjack and other types of internet betting are either illegal or not expressly authorized by law.
Considering Malaysia’s crackdown on illegal online gambling, combined with the UK Gambling Commission’s recent implementation of a license requirement and POC tax in order to accept UK bettors, industry analysts are certain that more jurisdictions will impose similar regulations and blockages in the near future. With that said, if Playtech loses even half of its customers in unregulated markets, the results could be devastating.
Gamblers in Malaysia are outraged by the injunction as well. The majority of the country’s population is Muslim, who are generally known to shy away from such activities as gambling. While it’s not publically accepted, there are still countless Malaysians that like to gamble. There is only one brick-and-mortar casino authorized to operate in Malaysia, and due to the outward view of most citizens, it caters mostly to affluent tourists, leaving residents of the country with little other choice than to spend their wagering dollars on the internet.
What’s upset online blackjack fans in particular is the fact that the Malaysian Communications and Multimedia Commission (MCMC) keeps making alarmist statements on the matter. Earlier this week, the Chairman of the MCMC stated that online gambling websites are nothing more than crooks looking to pilfer the financial details of account holders. While some iGaming sites are rogue operators with duplicitous intentions, the majority of them – including every single one that made the list of 170 blockages – are reputable, legally licensed websites regulated by other jurisdictions.