The Federal Court in the case of Dato’ Ting Ching Lee v Ting Siu Hua [2025] 2 MLJ 295 ; [2025] 4 CLJ 1 (FC) recently ruled that debts disguised in the form of credit facilities and rolling rebates for gambling activities are unlawful and unenforceable. Credit facilities granted for the purpose of gambling activities are essentially gambling contracts and gambling debts are against public policy and unenforceable under Malaysian law.
Background Facts
Ting Siu Hua (TSH) is a junket promoter for Huang Group to bring players to gamble at casinos. Dato’ Ting Ching Lee (DTCL) is a businessman from Sarawak. TSH arranged a gambling trip for DTCL to gamble at Naga Casino Cambodia in January 2015. Huang Group then granted credit lines of USD 1,500,000 and USD 193,800 in rolling rebates (approximately RM6,097,680) for DTCL to gamble at Naga Casino.
After the gambling trip, DTCL claimed that TSH published defamatory statements, including photographs of DTCL in a local mandarin language newspaper. The statements allege that DTCL and several other individuals have failed to settle their debts.
DTCL then filed a defamation suit against TSH in the High Court and sought for damages and an injunction to restrain the TSH from further publishing defamatory statements. TSH then filed a counterclaim against DTCL, to recover the monies based on the lines of credit and rolling rebates granted to DTCL to gamble at Naga Casino.
High Court and Court of Appeal
The High Court dismissed both DTCL’s claims and TSH’s counterclaim. The High Court held that (i) DTCL failed to prove that TSH published the defamatory remarks; and (ii) enforcement of gambling debts are against public policy and forbidden by law.
The Court of Appeal affirmed the decision of the High Court for defamation but allowed TSH’s counterclaim for the recovery of the line of credit and rolling rebate.
Federal Court
DTCL sought leave to appeal to the Federal Court against the decision of the Court of Appeal which allowed TSH’s counterclaim. DTCL’s application for leave to appeal was granted by the Federal Court.
The main issue before the Federal Court was whether the credit facilities or credit agreements granted to DTCL for the sole purpose of gambling is a gaming contract and whether the sum claimed by TSH is a gambling debt unenforceable under Malaysian law.
It is indisputable that the credit lines and rolling rebates were granted to DTCL to purchase gambling chips at Naga Casino for gambling. This was in fact what DTCL did. DTCL then lost and had to pay for the amount of the credit lines and rolling rebate.
The Federal Court held that the court should not ignore or brush aside the obvious fact that the credit facilities were for gambling purposes and accept that they were pure loans. The reality of the transactions must be examined objectively and in totality. The reality in the present case is that the credit facilities are for gaming or wagering transactions. To conclude otherwise is to allow parties to get around the law and indirectly defeat the law.
The Federal Court cannot accept the credit facilities granted to the DTCL as pure loans and were legitimate transactions. The guise of legitimate transactions in whatever terms used should not shackle the long arm of the law to have its effect.
The reality is that it was a gaming or wagering transaction, and without credit facilities, DTCL could not gamble at Naga Casino. Further, the credit facilities could not be used for other purposes asides from gambling at Naga Casino. The term loans in reference to the credit facilities to the DTCL is actually a gambling debt unenforceable under Malaysian law.
Public perception of gambling is also without doubt that gambling activities are something bad and should be discouraged. Therefore, gambling activities and their transactions are against public policy.
The Federal Court then dispelled any thoughts that the present law is only favourable to gamblers who lose in their gambling activities and emphasised that the law applies to all parties involved in the gaming transactions. This means that the winner of any wagers similarly cannot enforce their claim under Malaysian law.
Debt arising from gambling activities is a debt of honour and not a legal debt. A debt of honour as defined in the Concise Oxford English Dictionary is a “debt that is not legally recoverable, especially a sum lost in gambling”.
The Federal Court set aside the decision of the Court of Appeal concerning TSH’s counterclaim and restored the decision of the High Court.
Gambling Debts are Unenforceable in Malaysia
Introduction
The Federal Court in the case of Dato’ Ting Ching Lee v Ting Siu Hua [2025] 2 MLJ 295 ; [2025] 4 CLJ 1 (FC) recently ruled that debts disguised in the form of credit facilities and rolling rebates for gambling activities are unlawful and unenforceable. Credit facilities granted for the purpose of gambling activities are essentially gambling contracts and gambling debts are against public policy and unenforceable under Malaysian law.
Background Facts
Ting Siu Hua (TSH) is a junket promoter for Huang Group to bring players to gamble at casinos. Dato’ Ting Ching Lee (DTCL) is a businessman from Sarawak. TSH arranged a gambling trip for DTCL to gamble at Naga Casino Cambodia in January 2015. Huang Group then granted credit lines of USD 1,500,000 and USD 193,800 in rolling rebates (approximately RM6,097,680) for DTCL to gamble at Naga Casino.
After the gambling trip, DTCL claimed that TSH published defamatory statements, including photographs of DTCL in a local mandarin language newspaper. The statements allege that DTCL and several other individuals have failed to settle their debts.
DTCL then filed a defamation suit against TSH in the High Court and sought for damages and an injunction to restrain the TSH from further publishing defamatory statements. TSH then filed a counterclaim against DTCL, to recover the monies based on the lines of credit and rolling rebates granted to DTCL to gamble at Naga Casino.
High Court and Court of Appeal
The High Court dismissed both DTCL’s claims and TSH’s counterclaim. The High Court held that (i) DTCL failed to prove that TSH published the defamatory remarks; and (ii) enforcement of gambling debts are against public policy and forbidden by law.
The Court of Appeal affirmed the decision of the High Court for defamation but allowed TSH’s counterclaim for the recovery of the line of credit and rolling rebate.
Federal Court
DTCL sought leave to appeal to the Federal Court against the decision of the Court of Appeal which allowed TSH’s counterclaim. DTCL’s application for leave to appeal was granted by the Federal Court.
The main issue before the Federal Court was whether the credit facilities or credit agreements granted to DTCL for the sole purpose of gambling is a gaming contract and whether the sum claimed by TSH is a gambling debt unenforceable under Malaysian law.
It is indisputable that the credit lines and rolling rebates were granted to DTCL to purchase gambling chips at Naga Casino for gambling. This was in fact what DTCL did. DTCL then lost and had to pay for the amount of the credit lines and rolling rebate.
The Federal Court held that the court should not ignore or brush aside the obvious fact that the credit facilities were for gambling purposes and accept that they were pure loans. The reality of the transactions must be examined objectively and in totality. The reality in the present case is that the credit facilities are for gaming or wagering transactions. To conclude otherwise is to allow parties to get around the law and indirectly defeat the law.
The Federal Court cannot accept the credit facilities granted to the DTCL as pure loans and were legitimate transactions. The guise of legitimate transactions in whatever terms used should not shackle the long arm of the law to have its effect.
The reality is that it was a gaming or wagering transaction, and without credit facilities, DTCL could not gamble at Naga Casino. Further, the credit facilities could not be used for other purposes asides from gambling at Naga Casino. The term loans in reference to the credit facilities to the DTCL is actually a gambling debt unenforceable under Malaysian law.
Public perception of gambling is also without doubt that gambling activities are something bad and should be discouraged. Therefore, gambling activities and their transactions are against public policy.
The Federal Court then dispelled any thoughts that the present law is only favourable to gamblers who lose in their gambling activities and emphasised that the law applies to all parties involved in the gaming transactions. This means that the winner of any wagers similarly cannot enforce their claim under Malaysian law.
Debt arising from gambling activities is a debt of honour and not a legal debt. A debt of honour as defined in the Concise Oxford English Dictionary is a “debt that is not legally recoverable, especially a sum lost in gambling”.
The Federal Court set aside the decision of the Court of Appeal concerning TSH’s counterclaim and restored the decision of the High Court.
About the authors
Chew Jin Heng
Partner
Dispute Resolution
Halim Hong & Quek
[email protected]
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Nur Masturina Binti Mohd Kamal
Pupil-in-Chambers
Dispute Resolution
Halim Hong & Quek
[email protected]
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