Threat to Malaysia's Gaming Tables?

What happens to Malaysia's healthy gambling industry if the three-party opposition ousts the Barisan Nasional?

At the moment, the opposing coalitions appear to be running neck and neck and although the Pakatan Rakyat opposition is pulling massive crowds, it's uncertain if those crowds will translate into votes. Most political analysts say it's too close to call.

Nonetheless, the opposition parties - the largely Chinese Democratic Action Party, Opposition Leader Anwar Ibrahim's Parti Keadilan Rakyat (People's Justice Party) and the PAS Islamist party - are more confident than ever before. It remains to be seen if that confidence is misplaced.

PAS has held sway on the northeastern seaboard of Peninsular Malaysia for decades with a relatively stern code of Islamic morals and has proclaimed the goal of instituting shariah law if it ever achieves power, which presumably would end all gaming in the country. The Islamist party, the strongest member of the coalition, has previously restricted lottery ticket sales after winning power in individual states and some in the party have talked of shutting down Resorts World Genting, the country's sole casino and the flagship property of Genting Group's expanding global gambling empire.

Yet even if the opposition manages to beat the Barisan, an emerging spirit of pragmatism in PAS suggests there will be little change to gambling policy.

For Malaysia's casino industry, which is expected to hit US$964 million in revenues after three recession-hit years, and its US$2.99 billion numbers lottery industry, which has been climbing steadily in revenues since 2002, a ruling coalition containing PAS logically ought to spell trouble.

Genting Group operates worldwide including 40 casinos in the UK. Malaysia is also the home of such lucrative operations as CIB Development, which operates online gambling concerns that are presumably outside the view of authorities who would like to keep ethnic Malays - all of whom are Muslims by law - from gambing.

But PAS's ascendency to power as a member of the opposition likey won't have any effect on gaming, sources say.

A Kuala Lumpur-based lawyer with very close ties to Opposition Leader Anwar Ibrahim flatly says PAS's presence in the coalition won't change anything. The revenues from gaming are simply too important for the government, he says, and for too many non-Malays. A longtime political operative in KL says the same thing, adding that a top Pakatan Rakyat leader, although not one from PAS, has given Genting executives assurances that no change in operations will be forthcoming.

Dzulkifly Ahmad, a PAS senior strategist who blogs as Dr. Dzul, got extremely flustered in a telephone interview, saying the question of PAS's stance on legal gaming has not come up and won't until after the election.

"We haven't addressed this in our [party] manifesto, so I think we will cross that bridge when we come to it. We have some understanding but we don't want to deal with it until after the election. Some sort of consensus [with the other two parties in the coalition] will be necessary. It is a very touchy question."

Dzulkifly's response is an indication that PAS would prefer to ignore the question. There are two major reasons. The first is that ethnic Malays, who make up 60.3 percent of the population according to the 2010 census, are already forbidden from gambling and do not visit the rambling, 200,000 sq ft Casino de Genting, located 2,000 meters above Kuala Lumpur in the mountains overlooking the city. Some 20 million people, including a sizable chunk of the Chinese, who make up 22.9 percent of the population, visit the Genting complex every year. With the Malays barred from casinos, that provides a safety valve.

The second reason is that PAS itself is changing profoundly. The party, once known for the white skullcaps earned from the Haj, is now pretty much ruled by the so-called Erdogans, named for Recip Tayip Erdogan, the Turkish prime minister who came to power as an Islamist in 2003 but who has allowed Turkey to remain a secular state.

A reformed PAS, political analysts say, provides a new refuge for disaffected ethnic Malays who have long been turned off by UMNO's endemic corruption but are still not willing to opt for Parti Keadilan Rakyat headed by Anwar, who remains a polarizing figure.

In its 2011 annual general assembly, PAS elected a moderate slate in which only six of the 18 central committee members are now considered religious leaders. The remainder seem to reflect the majority Malay middle and working classes that PAS has lately begun to court. In particular Husam Musa, who has pushed to moderate the PAS stance on a theocratic state, won one of the three vice-president posts and vowed to reach out to non-Muslim minorities.

While the party is still headed by religious leader Abdul Hadi Awang, the deputy presidents and vice presidents below him are largely a collection of parliamentarians, activists and think tank analysts.

"It's a very good lineup," an ethnic Malay businessman who didn't want to be quoted by name said in an earlier interview. "The ulamas are still there in the Ulama Council but there are many moderates among them. There finally seems to be hope among non-Muslims and moderate Muslims alike that PAS is becoming a party where people can look for moderate, fair and tolerant leadership."

Most of the new leaders, he said, "are professionals - bright, progressive and who can accept the principle of acceptance of different races. Race has never been an issue with PAS, only religion. UMNO in the past few years has tried to be more Islamic than PAS and has evolved into a racial party. I am impressed by the new lineup. So are my towkay (prominent Chinese businessmen) friends."

A version of this story originally appeared in Asia Gambling Brief (