1. ) KERAJAAN NEGERI KEDAH DARUL AMAN 2. ) MENTERI BESAR KEDAH YAB DATO SERI HAJI MUHAMMAD SANUSI BIN MD NOR v 1. ) LEE BAK CHUI 2. ) STM LOTTERY SDN BHD 3. ) LEE YEE PING

Case Significance

Confirms that betting and lotteries fall within the federal field under the Federal Constitution and the Pool Betting Act 1967, and that a State may not use its local-government licensing power to frustrate a federal licensing regime.

This Court of Appeal decision, disposing of six appeals heard together, concerns the constitutional division of powers between the Federation and a State over betting and lotteries. Licensed lottery operators had been refused the business-premises licences they needed to operate, following a State's decision directed at their number-forecast betting activities, and they succeeded in the High Court in having that decision quashed. The State Government and the Menteri Besar appealed. The Court analysed the framework of the Federal Constitution governing the distribution of legislative and executive power, including Articles 74, 75, 80 and 81 and the Federal and State Lists in the Ninth Schedule, and the federal licensing regime under the Pool Betting Act 1967, alongside the State's power to issue business-premises licences under the Local Government Act 1976. It held that betting and lotteries fall within the federal field, and that a State cannot use a power such as the grant or refusal of a business-premises licence to defeat the practical operation of a federal licensing regime in a matter reserved to the Federation. The Court agreed with the High Court that the impugned decision was amenable to judicial review and was ultra vires the Federal Constitution, unconstitutional, unlawful and irrational, and that the appellants had shown no proper basis for appellate intervention. It dismissed all six appeals and affirmed the High Court's orders, making no order as to costs given the public-law and constitutional issues raised. The judgment is significant for confirming that a State may not exercise a local-government licensing power so as to frustrate a federal regime in a field allocated to the Federation. The decision is a clear application of the federal-state division of legislative and executive power, confirming that a State may not deploy an ostensibly local licensing power to defeat, in substance, a licensing regime that Parliament has enacted in a field reserved to the Federation.