Unregulated 4D lotteries are big business in Malaysia these days but their wild popularity comes with price. All this offshore lottery action is costing the Malaysian government hundreds of millions in lost tax revenue.

4-Digits (4D) lotteries are a licensed product of a company called Magnum 4D. The lotteries, which are extremely popular in Malaysia and Singapore, have players picking 4 numbers from a drawing range of 0000-9999. If any of the player’s four numbers is drawn, that player wins.

Magnum 4D has seen huge success with this product and is also the first 4D operator ever granted a license to operator legally in Malaysia.

Unfortunately for 4D and the Malaysian government, Magnum 4D is hardly the only operator offering 4D lotteries.

According to a recent report in the Daily Sun, a Malaysian daily newspaper, the illegal 4D market could be as much as 1.5 times larger than the regulated 4D market.

As a whole, regulated Malaysia 4D lotteries bring about about $9 billion RM (or about $2.3 billion USD). That equated to about $2 billion RM ($510 million UDS) in tax revenues.

Not surprisingly, executives at Magnum 4D aren’t thrilled about their unregulated competitors. In an interview with the Daily Sun, an unnamed Magum 4D described the impact of illegal lotteries as follows:

…the illegal sector is generally known to be about 1.5 times larger and so the government is losing about RM3 billion in duties and taxes each year, in the same way revenue is lost through the activities of syndicates that smuggle cigarettes and liquor into the country and evade taxes.

Unfortunatelty, there doesn’t seem to be much agreement about what can be done to curb the illegal lotteries. Malaysian law enforcement agencies say that antiquated gambling laws make it difficult to shut down illegal operators. Malaysian lawmakers claim that corrupt law enforcement agencies are the real culprits behind the problem.

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