Jurisdictional Showdown Between State Autonomy and Federal Gambling Authority
The Kedah State Government has doubled down on its controversial decision to halt the renewal of gambling premises licences, arguing in the Court of Appeal this week that it acted entirely within the scope of its constitutional powers. The case, which pits state administrative rights against federal regulatory oversight, has reignited legal and political debate over how Malaysia’s federal system governs the gambling industry.
State: Licensing of Business Premises is a State Matter
During the appeal hearing, Kedah’s legal adviser Saifulrijal Azhari cited the Federal Constitution’s Ninth Schedule, specifically Item 4 of the State List, to defend the state’s authority. He stated that local authority governance and the licensing of physical business premises fall under state jurisdiction, independent of federal decisions regarding gambling legality.
The state’s appeal challenges a 2023 High Court ruling that found Kedah’s refusal to renew licences for gambling premises to be both illegal and irrational. That earlier judgment stemmed from six judicial review applications brought by pool betting operators and agents, whose federal licences remain valid under the Pool Betting Act 1967.
Operators Say Move Constitutes Backdoor Gambling Ban
Opposing the state’s stance, counsel Brian Foong—representing the betting companies—argued that Kedah’s decision is tantamount to an unauthorised ban on gambling. He pointed to Item 4(l) of the Federal List, which clearly places the regulation of betting and lotteries under exclusive federal jurisdiction, thereby rendering Kedah’s refusal to issue premises licences as an unconstitutional override.
Foong underscored that while the federal Ministry of Finance issues gambling licences, state governments control only the physical operation of businesses. By refusing premises licences to otherwise federally licensed operators, the state is allegedly disabling lawful activity through indirect administrative action.
Judgement Reserved Amid Complex Constitutional Questions
The three-member appellate panel, chaired by Datuk Azizah Nawawi, reserved its judgment after an hour-long hearing that involved extensive scrutiny of the limits of state and federal authority. The case marks a pivotal moment for Malaysian federalism, particularly in areas where regulatory overlap creates legal grey zones.
Observers note that the Court’s decision could set a significant precedent for how federal-state power is interpreted in industries regulated at both levels—particularly those with moral, religious, or political sensitivities such as gambling.
What’s Next?
The pending judgment could either reinforce state discretion over moral policy enforcement—as seen in previous decisions related to alcohol and entertainment regulations—or reaffirm federal supremacy in matters governed by national law, particularly economic sectors like gaming.
As the case awaits a formal ruling, it underscores ongoing tensions within Malaysia’s dual governance framework, highlighting how constitutional interpretation continues to shape the nation’s commercial and social landscape.
