The MADANI government has not issued any new gambling licenses or permits since taking over federal administration at the end of 2022, the Ministry of Finance confirmed this week in a statement addressing mounting public confusion over the nation's gambling regulatory framework. The ministry's clarification came in response to remarks by Kedah Menteri Besar Datuk Seri Muhammad Sanusi Md Nor, whose statements regarding gambling licensing in the state had created the misleading impression that the federal administration had relaxed oversight of the sector or approved new gaming premises.
Under the current administration, all licenses and permits in force trace their origins to approvals granted since the 1990s. The Ministry of Finance emphasised that no expansion has occurred in the number of licensed gambling operations under MADANI's tenure, reinforcing the government's commitment to maintaining the existing regulatory perimeter rather than expanding it. This stance represents a deliberate continuation of a cautious approach toward gambling expansion that has characterised recent federal administrations, particularly those involving the Islamic party PAS, which holds strong views on gaming activities.
The ministry's statement provided important context regarding the governance history of gambling regulation in Malaysia. Between 2020 and 2022, when the federal government administration included PAS as a coalition partner, no proposal or decision was made to ban licensed gambling across the country or to revoke existing licenses. This period established the baseline from which the MADANI government would operate, suggesting that even during administrations with greater religious conservatism, complete prohibition of licensed gambling was not pursued as policy.
A significant policy adjustment came regarding special lottery draws, which serve as a major revenue source for the federal government. When Pakatan Harapan led the federal administration in 2020, it reduced the frequency of special draws from 22 to eight occasions annually. However, this restriction was subsequently reversed by the following administration, which increased the frequency back to 22 draws per year. The MADANI government's first major decision upon taking office was to reverse this expansion, reducing special draws back to eight times yearly starting from January 2023, demonstrating a preference for measured rather than expansionist gambling regulation.
The ministry outlined a comprehensive approach to gambling regulation that extends beyond merely refusing to issue new licenses. All current licensees operate under strict conditions imposed as part of broader control measures designed to manage the sector responsibly. This regulatory architecture balances the continued operation of licensed gambling with efforts to contain its reach and minimise associated social harms. The government has signalled its intention to maintain this balanced approach while intensifying enforcement against unlicensed and online gambling operations that fall outside regulatory oversight.
These clarifications emerged against the backdrop of a significant legal development that had elevated tensions between federal and state authorities. On 12 August, the Federal Court rejected Kedah State Government's application for leave to appeal a previous court decision that prohibited the issuance and renewal of gambling business licenses at the state level. The court's unanimous decision, delivered by a three-judge panel chaired by Datuk Rhodzariah Bujang alongside Datuk Collin Lawrence Sequerah and Datuk Azmi Ariffin, also imposed costs of RM50,000 on the state government. This ruling clarified the constitutional distribution of gambling licensing authority within Malaysia's federal system.
Following the Federal Court's decision, Menteri Besar Sanusi subsequently acknowledged the revised regulatory structure governing gambling premises. Under this arrangement, the Ministry of Finance holds responsibility for approving gambling business operations at the national level, while local authorities (PBT) manage the issuance of premises licenses only after operators have secured ministerial approval. This two-tier system ensures federal oversight of expansion decisions while maintaining local authority involvement in implementation, reflecting Malaysia's broader pattern of shared governance responsibilities between federal and state administrations.
The distinction between federal and state roles in gambling regulation carries implications for Kedah and other states seeking to implement their own gambling policies. While states cannot independently issue new licenses or establish their own gambling frameworks, they retain authority over local land-use decisions and premises approvals, provided operators have first obtained federal clearance. This arrangement prevents states from circumventing federal restrictions through unilateral licensing arrangements, a concern that appears to have motivated the Kedah State Government's legal challenge.
For Malaysian observers monitoring gambling policy, the MADANI government's position reflects broader governance priorities around social issues and revenue management. Licensed gambling generates substantial federal revenue through taxation and special draws, making complete prohibition economically impractical even for administrations with reservations about gaming activities. The current approach permits continued operation of existing licensed operators while preventing expansion, a compromise that acknowledges both religious and fiscal considerations within a plural society.
The federal government's commitment to intensifying action against unlicensed and online gambling suggests that while licensed operations remain controlled and restricted, the rapid growth of digital gambling presents an emerging regulatory challenge. Online gambling platforms operate across state and national boundaries with minimal friction, making enforcement particularly difficult. The government's stated intention to crack down on these activities signals recognition that the real regulatory threat may lie less in licensed premises expansion than in the proliferation of unregulated digital alternatives that attract Malaysian participants without government oversight or revenue capture.
Looking forward, the MADANI government's gambling stance balances revenue considerations against concerns about social impact and Islamic values that resonate within significant portions of the Malaysian electorate. By maintaining the existing license base, reducing special draw frequency, and intensifying enforcement against unlicensed operations, the administration has established a middle position that differs markedly from the expansionist approach taken between 2022 and early 2023. This recalibration demonstrates how federal gambling policy remains contested terrain in Malaysian politics, subject to evolving interpretations of federal authority and shifting coalition priorities.
