The MADANI government has maintained strict control over gambling activities by refraining from issuing new gambling licences or permits since it assumed federal office at the end of 2022, according to a statement released by the Ministry of Finance on August 27. The clarification came in response to remarks by Kedah Menteri Besar Datuk Seri Muhammad Sanusi Md Nor, whose statement about gambling licensing in the state was deemed by the ministry to have created a misleading impression that the federal administration had loosened its grip on gambling operations or sanctioned new premises.
The ministry emphasised that all licences and permits currently in operation trace their authority to approvals granted since the 1990s, with no expansion of the gambling sector under the current administration. This position underscores the MADANI government's stated commitment to maintaining existing regulatory frameworks rather than expanding licensed gambling activities. The Finance Ministry further noted that stringent conditions have been imposed on all existing licensees as a core component of its regulatory strategy, reflecting a more controlled approach to an activity that remains contentious in Malaysian society.
The dispute over gambling regulation highlights the ongoing tension between federal and state authorities regarding jurisdiction over gaming operations. On August 12, the Federal Court delivered a decisive ruling when it rejected Kedah's application for leave to appeal a previous court decision that prevented the state government from issuing or renewing gambling business premises licences. The three-judge panel, led by Datuk Rhodzariah Bujang and including Datuk Collin Lawrence Sequerah and Datuk Azmi Ariffin, delivered a unanimous decision that also required Kedah to pay costs of RM50,000. This ruling clarified the administrative divide, with the Finance Ministry retaining authority to approve gambling operators while local authorities handle issuance of premises licences once federal approval is obtained.
The substance of the federal government's gambling position becomes clearer when examining recent policy shifts. During the Pakatan Harapan administration between 2020 and 2022—a period that notably included PAS participation—no proposal emerged to ban licensed gambling nationally or to revoke existing licences, indicating broad political consensus around the issue. However, the frequency of special draws became a focal point for policy adjustment. The Pakatan Harapan government in 2020 had reduced special draws from 22 to eight times annually, a reduction aimed at limiting gambling activity expansion. Nevertheless, a subsequent federal administration reversed this decision by increasing the frequency back to 22 times yearly, suggesting political disagreement over appropriate control measures.
When the MADANI government came to power, one of its earliest decisions was to reverse that increase again. Starting January 2023, the frequency of special draws was reduced from 22 back to eight times per year, signalling renewed emphasis on constraining gambling sector growth. This policy reversal demonstrates the MADANI coalition's priority in addressing what many Malaysian communities and religious groups consider a social concern. The decision reflects pressure from constituencies that view gambling expansion unfavourably, particularly within PAS-influenced regions where Islamic principles against gambling hold significant political weight.
The Finance Ministry's statement also articulated its broader regulatory philosophy, emphasising that a firm and responsible approach would guide future gambling administration. This approach encompasses three interconnected strategies: limiting the scope of licensed gambling activities, enforcing strict regulation of existing operations, and intensifying enforcement action against unlicensed and online gambling. The dual focus on controlling legitimate gambling while cracking down on illegal operations suggests recognition that prohibition remains politically unrealistic while unregulated gambling poses greater social risks than tightly monitored licensed activities.
Unlicensed and online gambling represents a significant enforcement challenge for Malaysian authorities. The ministry's commitment to intensifying action against these alternatives acknowledges that outright bans on gambling—even if politically achievable at the federal level—often drive activity into underground markets beyond regulatory oversight. By maintaining licensed gambling under strict conditions while targeting illegal operations, the government attempts to balance competing objectives: respecting the commercial interests of existing licensed operators, addressing moral concerns from religious and community groups, and preventing more problematic underground gambling expansion.
The Kedah case carries particular significance given that state's political composition and the Menteri Besar's public profile. Muhammad Sanusi Md Nor's remarks about gambling licensing appear designed to highlight what he viewed as federal inaction or permissiveness regarding gambling expansion in his state. His subsequent clarification that the Finance Ministry holds licensing approval authority while local authorities issue premises licences suggests an attempt to shift responsibility away from state-level decisions. This jurisdictional clarity, while legally established, remains politically charged in a context where anti-gambling sentiment carries weight among certain electoral constituencies.
For Malaysian observers and policymakers, the Finance Ministry's position establishes important parameters for gambling regulation going forward. The stance that no new licences will be issued represents a de facto freeze on sector expansion, even if existing operations continue. This approach allows the government to claim fidelity to constituencies opposed to gambling growth while avoiding economically disruptive revocation of established operations. It represents a middle path between strict prohibition and market liberalisation, though one that satisfies neither strong prohibitionists nor gambling industry interests seeking market expansion.
The broader context of gambling policy in Malaysia reflects the country's complex intersection of Islamic governance principles, commercial interests, federal-state constitutional dynamics, and electoral politics. Religious concerns about gambling remain influential across the political spectrum, with PAS particularly vocal on the matter, yet economic interests tied to existing gambling operations command attention from federal authorities responsible for revenue generation. The MADANI government's approach—freezing new expansion while maintaining existing operations under tighter control—attempts to navigate these competing pressures while demonstrating responsiveness to anti-gambling constituencies through its January 2023 reduction in special draw frequency.
Moving forward, the government's stated commitment to intensifying action against unlicensed gambling and online gambling operations will require substantial enforcement resources. Online gambling particularly presents challenges given its borderless nature and the difficulty of monitoring activity conducted across jurisdictions. The Finance Ministry's emphasis on this dimension suggests recognition that technological change has altered the gambling landscape in ways that traditional regulatory frameworks struggle to address. Malaysian authorities' ability to effectively combat these digital alternatives will significantly influence whether the freeze on new licensed gambling actually constrains overall gambling sector growth or simply redirects activity into harder-to-monitor channels.
