Malaysia’s main opposition party, Parti Islam Se-Malaysia (PAS), has passed resolutions calling on the federal government to institute a nationwide review of all commercial gambling licenses and halt the issuance of new permits. Approved during the party’s annual general assembly in Kelantan, the motion urged the Ministry of Finance to tighten federal licensing parameters while demanding constitutional amendments to grant state governments greater regulatory authority over gambling premises.

Legal Context: Federal Powers vs. Local Authorities

The push follows a major legal defeat for the PAS-led state government of Kedah. In August 2026, the Federal Court rejected Kedah’s attempt to overturn a Court of Appeal ruling that barred local municipal councils from refusing business license renewals for pool betting and lottery outlets solely on the grounds of operating a gambling business.

The judiciary affirmed that while local authorities retain jurisdiction over building safety, sanitation, and zoning, using municipal business permits to execute a blanket ban on federally authorized gambling operations exceeds state constitutional powers.

Legislative Strategy and Constitutional Debate

Led by PAS MP Fadhli Shaari, opposition lawmakers plan to challenge the decision in the Dewan Rakyat by tabling legislative proposals aimed at shifting regulatory boundaries:

Policy Re-evaluation: Demanding that the federal government re-examine existing license frameworks for lotteries and gaming operators nationwide.

Statutory Amendments: Seeking amendments to existing federal laws to clarify state rights and grant local governments explicit statutory powers to ban or restrict gaming premises without conflicting with federal authority.

State Enforcement: Urging PAS-governed states Kelantan, Terengganu, Kedah, and Perlis to enforce maximum administrative restrictions within current legal limits.

The dispute sets the stage for a major constitutional debate in Malaysia's Parliament regarding the balance between federal authority over commercial trade and regional municipal oversight.

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