PUTRAJAYA (Aug 12): Malaysia’s highest court on Wednesday denied the Kedah government’s bid to restore a ban on lottery operations in the state.

A three-member bench of the Federal Court ruled unanimously refused to grant leave, or permission, as the application does not meet the high threshold of Courts of Judicature Act’s Section 96 (a) that deals with civil appeals from the Court of Appeal.

“Jurisdictional issues raised before us is not canvassed by this court,” Datuk Rhodzariah Bujang said in reading the panel’s brief decision against leave.

The panel, which includes Datuk Collin Lawrence Sequerah and Datuk Azmi Ariffin, also ordered the state government to pay RM50,000 in costs. 

The case stems from November 2021 announcement by Kedah Menteri Besar Datuk Seri Muhammad Sanusi Nor that the state would stop renewing local council licences for lottery outlets. The policy would take effect on Jan 1, 2023, as part of an initiative that he said would curb social ills.

Known as “toto”, “4D”, “kedai empat nombor ekor”, number forecast, or pool betting businesses, the operators have been unable to open their physical outlets in Kedah since 2023 despite holding federal business licences.

Lawyer Tan Sri Azhar Azizan Harun appeared for the state government while the pool betting companies were represented by Brian Foong Mun Loong, Eolanda Yeo Jin Huay, Muhammad Hiqmar Danial Hidzir, Stella Tan Ying Ee of Messrs Cheang & Arif.

After the proceedings, Foong said the decision to affirm the High Court’s ruling to quash the state government’s decision meant that his clients could now apply for business premises licenses.

“Our clients look forward to renewing their business licenses and will apply to the local councils across the state,” he said. “As the policy has been quashed, technically, there is no reason for the local councils to refuse.”

Asked whether the Kedah state government could seek a review of the Federal Court’s decision, Foong said it could but whether such application would succeed remained uncertain as the threshold would now be even higher.

Kedah was seeking to ask the Federal Court six questions of law, centred on whether the courts could inquire into the legality of the state government’s decision and the state’s powers under the Federal Constitution. A petitioner is required to obtain permission before the case is heard in full.

The attempt follows the Court of Appeal’s 2-1 decision to uphold a High Court decision reversed the Kedah state government’s move to ban lottery outlets statewide.

Datuk Faizah Jamaludin and Datuk Dr Lim Hock Leng agreed to uphold the High Court’s ruling. The dissenter was Chief Judge of Sabah and Sarawak Datuk Azizah Nawawi who also chaired the bench at the Court of Appeal.

In her dissent, Azizah referred to the Ninth Schedule of the Federal Constitution, citing Item 4 of the State List read together with Section 107 of the Local Government Act 1976. She argued that these provisions give the state the authority to regulate and license business premises.

However, Faizah, writing for the majority, found that Kedah’s decision effectively encroached into the federal domain.

She held that by ceasing to renew or issue business premise licences for pool betting activities, Kedah government had undermined the statutory authority of the federal Minister of Finance, who regulates the industry under the Pool Betting Act.

"This undermines the statutory authority of the Minister of Finance, who is empowered to issue licences for pool betting and regulate the industry nationwide, thereby effectively nullifying such federal powers,” she said.

Faizah added that pursuant to Article 8.1 (b) of the Federal Constitution, "every state is obliged to exercise its executive authority, as not to impede or prejudice, the executive authority of the federation".

The case began with six judicial review applications filed at the High Court. Judge Mahazan Mat Taib decided to reverse Kedah's policy in 2024, siding with pool betting agents, betting companies and their principal officers.

Mahazan ruled that the ban was ultra vires, meaning that Kedah government had acted beyond its powers and violated the Federal Constitution.