From Record Raids to Revenue Rallies — What‘s Shaping Malaysia’s Gambling Industry in 2026

Market Growth – 5.4% CAGR, but the Shadow Market Looms Larger

The Malaysia Gambling Market is projected to grow at a compound annual growth rate of 5.4% during the 2026‑2032 forecast period, according to 6Wresearch. The fastest‑growing segment is online gambling platforms, driven by rising internet and mobile device penetration, digital payment adoption and growing sports enthusiasm. Smartphone usage in Malaysia exceeded 96% by 2025, with mobile traffic dominating most digital entertainment categories.

However, the legal market‘s reported growth tells only part of the story. The illegal gambling market is now estimated to be at least 1.5 to two times the size of the legal industry, with illegal NFOs offering daily draws, higher payouts and 24/7 mobile access — advantages that legal operators cannot replicate. The illegal market costs the government an estimated RM5 billion in lost tax revenue annually.

The regulated gambling market generated approximately RM250 million in gross gaming revenue (GGR) in 2025, while offshore operators captured an estimated RM1.8 billion, bringing total market GGR to around RM2.0 billion in 2025. This is projected to grow to RM2.3 billion in 2026, representing 10% year‑on‑year growth.

In the Asia‑Pacific region, the online gambling market was valued at US$26.11 billion in 2025** and is projected to reach **US$59.75 billion by 2034, exhibiting a CAGR of 9.15%. The Southeast Asia iGaming market was valued at US$1.27 billion in 2024** and is estimated to grow at a **CAGR of 21% to reach US$8.30 billion by 2034. Malaysia‘s position within this expanding regional market is significant, but capturing that growth requires addressing structural challenges in the legal sector and curtailing the dominance of illegal operators.

Malaysia Gambling Market – Key Statistics (2026)

Genting Malaysia – Revenue Up, Losses Mount

Genting Malaysia Berhad (GENM) reported total revenue of RM2.87 billion for the first quarter ended 31 March 2026, a 10% increase year‑on‑year. However, the company posted a net loss of RM3.8 million, reversing a profit of RM72.7 million a year earlier. The loss was driven by higher operating and payroll expenses linked to the transition of Resorts World New York City into a full‑scale commercial casino, which also caused profit before tax to fall 77% year‑on‑year to RM43.1 million. Revenue from the leisure and hospitality division rose 4% year‑on‑year to RM5.54 billion, supported by stronger gaming performance in Malaysia.

Parent company Genting Berhad recorded a net profit of RM101.1 million in Q1 2026, compared with RM4.6 million in the prior‑year quarter, on revenue that rose 2% to RM6.66 billion. However, analysts trimmed their FY26/27 forecasts for Genting by 23.2% and 24.0% respectively, downgrading the stock to “Hold” with a target price of RM2.35.

Looking ahead, analysts have warned that the ongoing Iran conflict could disrupt discretionary travel demand to Resorts World Genting through higher airfares and potential flight cancellations. While Visit Malaysia 2026 may help improve visitor traffic, Affin Hwang analysts note that Genting Malaysia‘s earnings remain heavily dependent on its gaming business, and the campaign is not expected to provide a major boost to the stock.

Official website: https://www.rwgenting.com/

Genting Group Q1 2026 Financial Performance

NFOs – Jackpot‑Fueled Recovery Masks Deeper Structural Decline

Number forecast operators (NFOs) are struggling to regain investor confidence despite offering attractive dividend yields of around 7%. Both Magnum and Sports Toto have seen their market capitalisations shrink over the past decade. Magnum‘s market cap dropped from an average of RM2.5 billion in 2016 to approximately RM1.84 billion, while Sports Toto’s market cap slid from RM3.8 billion to about RM1.74 billion.

The NFO sector faces three primary challenges. First, the illegal shadow market has grown to 1.5 to two times the size of the legal industry, with illegal NFOs offering daily draws, higher payouts and 24/7 mobile access. Legal NFOs are capped at three to four draws per week and restricted to physical outlets. Second, a demographic and cultural shift has seen younger consumers increasingly spending their discretionary time and money on online alternatives. Third, the operating landscape has become more restrictive; “special draws” have been slashed from 22 to just eight per year.

Revenue across both major NFOs has remained largely flat over the past decade. Excluding the pandemic‑affected years, Magnum‘s revenue has hovered between RM2.03 billion and RM2.7 billion. Sports Toto reported trailing 12‑month revenue of RM1.7 billion and EBITDA of RM119 million as of February 2026. Analysts expect the NFO segment to deliver flattish performance going forward, as sales per draw have not shown meaningful uplift.

Despite these headwinds, jackpot‑driven surges remain a key lever for NFOs. A RM14.8 million Supreme 6/58 jackpot was won in May 2026, temporarily boosting sales. However, analysts note that such surges do not address the sector‘s underlying structural challenges, and expectations for growth should remain realistic.

Illegal Gambling Crackdown – MCMC’s Record 271,000 Takedowns

MCMC escalated enforcement against illegal online gambling in 2026. Between January and 23 May, it ordered the removal of 271,472 pieces of content related to scams and gambling. Of these, 91% were gambling/scams, with 81% of gambling content detected on Facebook. Facebook alone was asked to remove 249,268 pieces – 172,072 gambling-related. In the first 15 days of 2026, MCMC removed 15,519 gambling posts and 5,241 scam posts, many sponsored.

Banks blocked RM1.2 billion in attempted scam transactions in 2025, while scammers defrauded Malaysians of RM2.7 billion last year. A special committee will coordinate enforcement across agencies, banks and telcos.

The government is drafting a new bill to tackle illegal gambling, including online gambling. Deputy Prime Minister Fadillah Yusof said it could be tabled in Parliament soon. “Illegal gambling… can affect social well-being, especially among our younger generation.” The bill may be a standalone act or amend the Common Gaming Houses Act 1953. A point of consumption tax (POCT) is also under consideration. The new law would strengthen enforcement against online gambling.

MCMC Online Gambling Enforcement Statistics (2026)

Malaysia‘s gambling industry in 2026 is navigating a tale of two realities. The legal market is projected to grow at 5.4% annually, driven by digital adoption and mobile penetration, while the illegal market remains a dominant force, estimated at 1.5 to two times the size of the legal sector and costing the government billions in lost tax revenue.

Traditional operators are adapting. Genting Malaysia is expanding internationally while relying on Visit Malaysia 2026 to boost domestic traffic. NFOs are leaning into jackpot surges to temporarily reclaim market share, though revenue remains flat and structural challenges persist.

Simultaneously, regulators are waging an escalating war against illegal online gambling — removing over 271,000 content pieces, with 81% of gambling content detected on Facebook. A new gambling bill promises to close long‑standing legal loopholes, particularly around online platforms, but its final form remains uncertain. For investors and industry observers, the key question is whether the legal framework will keep pace with technological change, especially as stablecoins and encrypted platforms continue to reshape the offshore betting landscape. The answer will shape the sector’s trajectory for the rest of the decade.

Official sources: https://www.mof.gov.my/ | https://www.moha.gov.my/ | https://www.mcmc.gov.my/

Sources: 6Wresearch, The Edge Malaysia, Bernama, Henkwolff, H2GC, Fortress Capital Asset Management, UOB Kay Hian, HLBank Research, Vulcan Post