Malaysia’s state of Kedah has lost another judicial attempt to restore its policy of refusing licences to betting and lottery premises, reinforcing the principle that state governments cannot use local business permits to neutralise valid federal gambling licences. The setback, reported on August 13, 2026, leaves intact Kedah’s earlier defeat before the Court of Appeal and strengthens federal authority over betting and lotteries.
The dispute dates back to November 14, 2021, when Kedah Menteri Besar Dato’ Seri Haji Muhammad Sanusi bin Md Nor announced that the state would stop issuing and renewing licences for gambling premises. The policy became operational on January 1, 2023, when local authorities stopped renewing the required business-premises licences.
Operators affected included STM Lottery Sdn Bhd and ENE (Penang) Sdn Bhd, both holders of valid federal pool-betting licences issued under Section 5 of the Pool Betting Act 1967 by the Minister of Finance. As of August 2026, the ministry is headed by Dato’ Seri Anwar Ibrahim, alongside Amir Hamzah Azizan as Minister of Finance II.
Dato’ Seri Anwar Ibrahim
The Alor Setar High Court ruled on June 20, 2024 that Kedah’s policy was unlawful, irrational and unconstitutional. On December 12, 2025, the Court of Appeal upheld that ruling by a 2–1 majority, with Datuk Faizah Jamaludin and Datuk Dr Lim Hock Leng in the majority and Datuk Azizah Nawawi dissenting. The constitutional basis lies in the Federal Constitution, Ninth Schedule, List I, Item 4(1), together with Articles 74, 80 and 81(b), which place betting and lotteries within federal jurisdiction.
Kedah retains authority over premises licences under Section 107 of the Local Government Act 1976, including matters such as safety, hygiene, location and physical conditions. However, the latest judicial setback prevents those powers from being turned into a blanket state-wide prohibition against operators legally authorised by Malaysia’s federal government.
