PUTRAJAYA — Malaysia’s Federal Court has delivered a decisive ruling that closes off the Kedah state government’s last avenue to challenge a series of judicial decisions against its blanket ban on pool betting and lottery outlet licences, ordering the state to pay RM50,000 in costs and effectively restoring the legal right of operators to seek business premises licences from local councils.
The August 12, 2026 ruling marks the end of a legal battle stretching back to November 2021, when Kedah Menteri Besar Datuk Seri Muhammad Sanusi Nor announced the state would stop renewing local council licences for lottery outlets from January 1, 2023, framing the policy as a measure to curb social ills.
Federal Court Finds Kedah Failed the Threshold Test Under the Courts of Judicature Act
The three-judge Federal Court panel — chaired by Justice Datuk Rhodzariah Bujang and comprising Datuk Collin Lawrence Sequerah and Datuk Azmi Ariffin — delivered a unanimous decision dismissing the Kedah government’s application for leave to appeal.
Justice Rhodzariah, in delivering the court’s decision, held that the state government had failed to satisfy the threshold requirement under Section 96(a) of the Courts of Judicature Act 1964, the legal gateway through which a party must pass before a case can be elevated to the Federal Court.
The state was represented by counsel Tan Sri Azhar Azizan Harun, who proposed six questions of law and argued these questions had not yet been determined by the apex court, making their resolution a matter of public advantage. The court did not accept that argument. Lawyer Brian Foong Mun Loong, representing the pool betting operators, successfully contended that the threshold requirement had not been met.
Court of Appeal’s 2-1 Majority Previously Ruled Kedah’s Directive Irrational and Unconstitutional
The Federal Court’s dismissal upholds a Court of Appeal majority decision issued on December 12, 2025, which itself had affirmed the High Court’s earlier ruling in favour of pool betting agents, companies, and their principal officers.
Court of Appeal judge Datuk Faizah Jamaluddin, writing for the 2-1 majority, ruled that the Kedah government’s decision to stop issuing and renewing pool betting business licences had exceeded the constitutional limits of state power. She characterised the directive as an impermissible state-wide prohibition of a subject matter reserved to the Federation — specifically, one falling under the jurisdiction of the federal Finance Ministry.
The dissenting judgment came from Chief Judge of Sabah and Sarawak Datuk Azizah Nawawi, who held that the Kedah State Executive Council’s decision not to renew pool betting premises licences was a legitimate policy matter beyond the court’s reach. In her view, the decision reflected the state government’s discretion in weighing the welfare of Kedah’s population above the commercial interests of operators.
High Court Had Already Declared Kedah’s Decision Ultra Vires the Federal Constitution in June 2024
The judicial history of this case extends across multiple levels of Malaysia’s court system. On June 20, 2024, the High Court granted a declaration that the Kedah state government’s decision was ultra vires the Federal Constitution — meaning it exceeded the legal authority conferred upon the state. The High Court also issued a certiorari order quashing the decision outright, along with an order for damages to be assessed before a deputy registrar.
Those rulings arose from six separate judicial review applications filed by pool betting agents, pool betting companies, and principal officers of pool betting companies, all of whom sought to challenge the state government’s directive on constitutional grounds.
The High Court’s finding that the state’s action was unconstitutional formed the foundation that the Court of Appeal majority subsequently upheld, and which the Federal Court has now declined to disturb.
Operators Now Legally Clear to Apply for Business Premises Licences from Local Councils
Speaking to reporters following the Federal Court proceedings, lawyer Brian Foong Mun Loong confirmed the practical consequence of the ruling for his clients.
“As the policy has been quashed, technically, there is no reason for the local councils to refuse,” Foong said, indicating that pool betting operators in Kedah are now in a position to submit applications for business premises licences without the state-level prohibition standing in their way.
The ruling draws a constitutional line between state authority over local business licensing and the federal government’s exclusive jurisdiction over regulated gambling and pool betting activities. By declining to grant leave to appeal, the Federal Court has effectively affirmed that a state government cannot use its local licensing powers to engineer a de facto prohibition on a category of business that federal law permits and regulates.
The RM50,000 costs order against the Kedah state government was issued alongside the dismissal of the leave application. — Bernama
About the Author
