Friday, June 25, 2010

Najib Rejects Legalising of Football Betting

By Adib Zalkapli
Datuk Seri Najib Razak capitulated to popular public opinion tonight when he announced the government will not issue a football betting licence, weeks after tycoon Tan Sri Vincent Tan said his Ascot Sports Sdn Bhd had received approval for an old licence.

"After taking into account various views, we are of the opinion that the majority did not agree the decision to issue the license to Ascot Sports," he said after chairing the Umno supreme council meeting here.

"The government therefore decided that the license will not be issued," said the finance minister adding that Ascot Sports has been informed of the decision.

He said the withdrawal was supported by members of the Umno supreme council.

Najib said the government had earlier agreed to issue the sports betting licence but with strict condition such as banning Muslim involvement in the activity.

On whether Ascot Sports would be compensated Najib said there is no such requirement in the law.

"Under the act, the minister of finance can withdraw anytime," said Najib, declining to say when the decision was made.

He also hoped that Barisan Nasional (BN) component party members such as MCA and MIC who have supported legalised sports betting to accept the government's decision.

Several Barisan Nasional (BN) parties had supported the move but Umno Johor, Perak and Youth wing opposed the licence saying the social cost outweighed the possible tax revenue.

Tan's listed Berjaya Corporation Berhad had announced the approval in a filing to Bursa Malaysia last May 12 but Najib denied it in Parliament on June 7.

Pakatan Rakyat governments in Penang, Selangor and Kedah said they will not approve business licences for football betting although Tan said he will try to persuade them.

He had promised to donate the RM525 million for his share of Ascot Sports sold to Berjaya Corp to his own charity, Better Malaysia Foundation.

Apart from saying that football bets will be offered through the telephone and available at 220 out of the 680 Sports Toto outlets which are not Muslim majority areas, Tan said operations would begin after the current FIFA World Cup 2010 in South Africa.

PAS Youth chief Nasrudin Hassan Tantawi claimed two weeks ago that Ascot Sports will offer betting services for four major leagues — the English Premier League, the Italian league, as well as the Spanish and German leagues.

Nasrudin said that the sports betting company could not prepare itself to serve the World Cup because it was “too soon”.

PAS had also vowed to mobilise Malaysians to join its “100,000 march” to the Istana Negara this July 3 in protest over the Najib administration’s legalisation of sports-betting.

DAP’s Tony Pua claimed earlier this week to have documents to show companies controlled by Tan were proceeding with plans to start offering football betting by August and were raising RM800 million to finance operations.

The Petaling Jaya Utara MP told reporters in Parliament that on June 11, four days after the Finance Ministry had denied issuing any licence for football betting, Berjaya Sports Toto had issued an “information memorandum” detailing financing arrangements to raise RM800 million in loans for a period of ten years to finance its new business.

Berjaya Sports Toto is a subsidiary of Berjaya Corporation, and currently operates numbers forecast betting shops in peninsular Malaysia.

According to documents obtained by Pua, the principal adviser for the financing arrangements was Maybank Investment Bank Sdn Bhd, and lead manager AmInvestment Bank Berhad.

“They repeated the statement that Ascot Sports had been given approval for the reissuance of licence to carry out sports betting operations upon certain terms and conditions.

“They reiterated they have received approval. They stated that initially 220 of the Sports Toto outlets will be used as distribution points with expansion plans to accommodate more Sports Toto outlets in the future. The implementation was to be carried out in August or early September, in time for the EPL (English Premier League),” said Pua.

Another document produced by Pua was a credit analysis by MARC (Malaysian Rating Corporation Berhad) on Berjaya Sports Toto.

A rating agency is usually needed to determine the “quality” of a loan.

The MARC report states that “the timeframe for the rollout of the sports betting games are yet to be finalised.”

“MARC has assigned AA- rating to this exercise to raise money by Berjaya Sports Toto and among the contributory factors to the AA-rating is stated on page 4, under recent development following a recent announcement (that it is) yet to be finalised.

“Basically, what we see is that the approval has been given, but the actual licence has not been given.

“As Finance Minister, Najib needs to rectify this... It has now become a stupid play of words,” said Pua.

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