Judges Rule State Overstepped Its Authority by Blocking Pool Betting and Lottery Renewals, Affirming Federal Control Over Gambling Regulation
The Court of Appeal has dismissed the Kedah state government’s attempt to reinstate its decision not to renew business premises licences for pool betting and lottery operators, a ruling that underscores the limits of state power in matters governed by federal law. As reported by Free Malaysia Today, the appellate panel delivered a 2–1 majority decision, concluding that Kedah had acted outside its constitutional authority when it sought to block operations of federally licensed gambling businesses.
Justices Faizah Jamaludin and Lim Hock Leng found no merit in the state’s appeal, while Chief Judge of Sabah and Sarawak, Justice Azizah Nawawi, offered a dissenting opinion. No order for costs was issued.
In his written judgment, Justice Lim pointed to a statement made by Kedah menteri besar Sanusi Nor, who declared in an affidavit that the state government aimed to “ban gambling” altogether. Justice Lim stressed that such a ban effectively encroaches upon federal jurisdiction. Under Malaysian law, the Ministry of Finance has exclusive authority to issue and regulate licences for pool betting and lottery operations. The state’s refusal to renew business premises licences, he noted, amounted to “usurping the finance minister’s power” by imposing what was essentially a blanket prohibition.
Justice Faizah concurred, stating that Kedah’s actions created “a real conflict” between state and federal powers as outlined in the Federal Constitution. She emphasised that the Pool Betting Act clearly places regulatory responsibility at the federal level, making Kedah’s unilateral restrictions incompatible with the national legislative framework.
In her dissent, Justice Azizah argued that the state was acting on broader public policy considerations, asserting that the welfare of residents should guide government decisions regardless of religious context. She referenced a recent Federal Court ruling which held that, while gambling is regulated, restrictions may still be imposed based on public policy grounds. According to her view, the judiciary should avoid interfering in such policy decisions.
The case originated from the Alor Setar High Court’s ruling on 20 June last year, which found Kedah’s halt on licence renewals from 1 January 2023 to be “illegal and irrational.” Six applicants, including pool betting agents, companies and principal officers, filed judicial review challenges, arguing that gambling regulation rests solely with the federal government and that a state cannot unilaterally ban such activities.
The Court of Appeal’s decision now solidifies federal supremacy in gaming oversight and sets a consequential precedent for any future attempts by state governments to impose independent restrictions on gambling within their borders.
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