Malaysia’s Federal Court has reinforced the country’s stance on gambling debts as unenforceable, ruling against tour agent and junket operator Ting Siu Hua in a $1.5 million dispute.
Siu Hua had extended gambling credit to a businessman for a casino trip to Cambodia, but after the client failed to repay, she took legal action to recover the debt.
The case initially went to Malaysia’s High Court, where both the defamation suit filed by the client and Siu Hua’s counterclaim for debt recovery were dismissed. The court ruled that gambling debts are legally void under Malaysian law. Dissatisfied with the ruling, Siu Hua appealed to the Court of Appeal, which ruled in her favor by classifying the credit as a loan rather than a gambling debt. However, the matter was escalated to the Federal Court, where a three-judge panel overturned the appeal court’s decision, determining that the credit extended was directly tied to gambling and therefore could not be considered a legitimate loan.
The Federal Court cited Sections 24 and 31 of the Contracts Act 1950 and Section 26 of the Civil Law Act 1956, which explicitly state that gambling and wagering agreements are void and unenforceable. The judges stressed that gambling credit facilities cannot be disguised as loans to circumvent the law.
The ruling also underscored the broader social and legal implications of gambling. One judge noted that gambling is widely viewed negatively in society, and Malaysia’s legal framework reflects this sentiment. The court dismissed the idea that the law unfairly protects gamblers from repaying their debts, clarifying that the lack of enforceability applies equally to both debtors and winners seeking their winnings.
The decision aligns with previous cases, including a similar ruling involving Wynn Resorts. As a final resolution, the Federal Court ordered Siu Hua to pay RM200,000 ($45,000) in legal costs to her client.
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