Malaysian Federal Court Decides Gambling Debts Cannot Be Enforced

Malaysia’s Federal Court has decided that people cannot recover gambling debts, which strengthens the country’s tough position on betting agreements. This ruling came after businessman Dato’ Ting Ching Lee won his appeal against tour agent Ting Siu Hua‘s counterclaim. Ting Siu Hua had tried to get back about MYR6 million ($1.5 million) in gambling credit.

Malaysian Court Declares Gambling Contracts Void Under Public Policy

A panel of three judges headed by Tan Sri Abdul Rahman Sebli, the Chief Judge of Sabah and Sarawak, along with Justices Nordin Hassan and Abdul Karim Abdul Jalil, ruled that contracts stemming from gambling activities go against public policy and have no legal standing under Malaysian law. Their decision referenced Sections 24 and 31(1) of the Contracts Act 1950 and Section 26 of the Civil Law Act 1956. These laws make it impossible to enforce any gaming or betting agreements in court.

The argument started in 2015 when Siu Hua, a tour agent and junket operator for Huang Group set up a casino trip for Ching Lee and his friends to Naga Casino in Cambodia. His job involved bringing in players and he got paid based on how much the people he brought in gambled.

On the trip, Huang Group gave Ching Lee a gambling credit line of $1.5 million, plus an extra rolling rebate of $193,800. However, later, he did not pay back the money. This led Siu Hua to post notices in a local Chinese newspaper and on social media saying the businessman owed a lot of money.

Ching Lee responded by suing Siu Hua to claim damages to her reputation. Siu Hua countered with a demand to get her gambling money back. The High Court threw out both cases saying the law cannot make people pay gambling debts. However, the Court of Appeal overturned this decision in Siu Hua’s favor, ruling that the credit line was a valid loan, not a gambling debt.

Casino Winners and Losers Alike Barred from Enforcing Gambling Claims

The Federal Court did not agree with the appeals court. It said that any credit given just to gamble is part of a betting contract. Justice Nordin Hassan explained in the written decision that the law in Malaysia cannot enforce these deals, no matter what people call them.

The court highlighted that the government has always taken a tough stand against gambling due to awareness of its harmful social and financial effects. It decided that covering up gambling credit as a loan does not alter its essence or make it acceptable.

Additionally, the verdict pointed out that the law treats all sides in a gaming deal the same way, including those who win bets. The ruling stops winners from pushing their claims in Malaysian courts backing up the idea that gambling debts are “debts of honor” instead of binding duties.

Legal experts point out that the verdict strengthens Malaysia’s tough ban on recovering gambling debts, which makes people think twice before trying to get the law to back up these claims. The decision also shields individuals from legal action over gambling losses, putting Malaysia in line with places like Singapore that also turn down requests to enforce betting agreements.