Kedah gambling ban: The State Govt overstepped its powers & will likely fail its appeal against the lottery operators
A controversial directive by the Kedah State Government on 1 January last year for local governments under its jurisdiction to cease the renewal of business premises licences of gaming outlets has recently been overruled by the Alor Setar High Court.
This is after several of the affected gambling outlets were successful in their bids for judicial review, whereby on 20 June, Judge Mahazan Mat Taib ruled in favour of the companies in their motion to challenge the directive. However, the Kedah State Government has since filed an appeal against the decision on 23 June.
So, what is a judicial review and why did the Alor Setar High Court rule in favour of the gambling outlets? Well, join us as we delve into the delicate matter based on the relevant laws and conventions below.
What is a judicial review and why are the gambling outlets seeking one?
As we’ve explained in a previous article, a judicial review is a court action meant to challenge decisions by public bodies. In this case, the public bodies being challenged are the Kedah State Government, Kedah Menteri Besar Datuk Seri Muhammad Sanusi Md Nor, Alor Setar City Council and its Mayor Datuk Mohd Yusri Md Daud.
Moreover, the affected gambling companies filed a judicial review on the grounds of Ultra Vires, or a public body acting beyond its statutory or legal power and Unconstitutionality or doing something which is against the Federal Constitution.
As for the remedies sought under the judicial review, the affected gambling outlets sought Certiorari or an order to quash or nullify the decision of a public body and Damages or monetary compensation for the losses suffered.
In other words, the affected gambling companies are seeking a nullification of the directive made by the Kedah State Government to cease the renewal of business licences of gaming outlets and to get monetary compensation as a result of the ban.
Why the High Court ruled in favour of the gambling outlets
In the Alor Setar High Court’s judgement in allowing for the judicial review, the learned Judge Mahazan Mat Taib ruled that the decision by the Kedah State Government to stop issuing and renewing business premises licences from 1 January 2023 was Ultra Vires and Unconstitutional.
The directive by the Kedah State Government, which was passed during a State Executive Council meeting on 8 December 2021, was found to be beyond its legal power as it contradicts the defined powers vested on a State Government as prescribed by the Federal Constitution.
Accordingly, the decision was also found to be Unconstitutional as the defendants had acted against the Federal Constitution.
Specifically, the gambling ban was against Articles 73, 74, 75 and 80(1) of the Federal Constitution.
Under Article 73(a), it is prescribed that Parliament may make laws for the whole or any part of the Federation, while Article 73(b) asserts that the State Legislature may make laws for the whole or any part of that particular State.
The above provision is further refined under Article 74, whereby Parliament may make laws with respect to the Federal List or Concurrent List as defined in the 1st or 3rd list set out in the 9th Schedule of the Federal Constitution. Meanwhile, the State Legislature may make laws in any of the matters set out in the 2nd list set out in the 9th Schedule or the Concurrent List.
Should there be inconsistencies between Federal and State laws, Article 75 prescribes for the Federal Law to prevail over the State law, to the extent of the inconsistency, be void.
Accordingly, Article 80(1) reiterated that all matters with respect to which Parliament may make laws, and the executive authority of a State to all matters with respect to which the Legislature of that State may make laws.
With all of the provisions above in mind, the 9th Schedule of the Federal Constitution clearly states that betting and lotteries are under the Federal list i.e. under the jurisdiction of Parliament rather than the State. Hence, by making a State Legislature on betting and lotteries as what has been done by the Kedah State Government, they have overstepped their boundaries and therefore, the legislature is void.
Besides ruling that the directive of the Kedah State Government is Ultra Vires and Unconstitutional, the Alor Setar High Court also ordered the defendants to compensate the plaintiffs for their losses.
Moving forward, it would be interesting to see how the Court of Appeal would view the appeal filed by the Kedah State Government in this judicial review. However, given the rather cut and dry provisions in the Federal Constitution on this matter, it’s hard to see anything other than a decision in favour of the gambling outlets would materialise.
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