PETALING JAYA: The federal government loses RM20 million a year in tax revenue following a decision by the PAS-led Kedah state government to ban gaming in the state.

The ban is believed to boost illegal gaming activities, as punters switch to black market where illegal operators rake in an estimated annual sales revenue of RM495 million.

A source familiar with the gaming industry told Sin Chew Daily gaming operators currently pay about RM19.8 million a year in tax revenue.

While the federal government loses tax revenue from the gaming industry, the state government would also lose revenue from assessment rates and licence fees of gaming outlets.

The source said the decision by the Kedah state government not to renew licenses of 4-digit outlets would not stop people from buying numbers.

Punters would switch to illegal operators instead, he said, adding that this would lead to more social issues and help boost illegal business.

“The black market will be even more active. Punters only want to bet. They don’t care whether the operators are legal or not,” he said.

Starting today, the 4-digit business in Kedah will be controlled by the black market, he said.

The source also said that many phone shops had become outlets for punters to buy numbers from the black market, describing the illegal business as “vibrant.”

It is estimated that licensed 4-digit outlets rake in RM600,000 to RM700,000 for each draw while the black market is three-fold in revenue.

Together with the special draws offered in the black market, the revenue is estimated to be RM3 million. Based on a total of 165 draws in a year, sales revenue in black market is estimated at RM495 million, he said.