“There are proposals, but we will see first,” Prime Minister Najib Razak was quoted as saying by the New Straits Times.
The newspaper said sports betting may legalised in time for the World Cup which is played from June 11 to July 11.
It said the Berjaya Group, a major Malaysian conglomerate with holdings ranging from lottery to casino operations, was seeking approval from the government to operate sports betting activities in the country.
Illegal betting on football is rife in Malaysia and the World Cup is expected to see a surge with millions of dollars changing hands.
The Berjaya Group made a similar proposal a few years ago, but then prime minister Abdullah Ahmad Badawi shot down the request. Gambling is forbidden in Islam and Malaysia has a large Muslim population.
A senior Malaysian sports official, on condition of anonymity, told AFP that the government could channel the revenue generated from legalising betting to promote sports.
The official, however, cautioned that it would not eradicate match-fixing.
“The fight against match-fixing is never ending. By legalising betting, it will not totally eradicate match-fixing. What we need to do is to remain vigilant,” he said.
Corruption has long blighted football in Asia, particularly in Malaysia, Vietnam and China.
Asian Football Confederation chief Mohamed bin Hammam has previously described match-fixing as a “cancer” that is destroying the game in Asia.