THE Kedah government could face compensation claims running into hundreds of millions of ringgit after its efforts to stop the issuance and renewal of gambling premises licences were found to be beyond its powers.
Menteri Besar Datuk Seri Muhammad Sanusi Md Nor said the state government was prepared for another legal battle should gambling operators seek compensation for losses allegedly incurred since the policy was introduced in 2023.
“The policies introduced by the state government, after the court found that we did not have the power to ban gambling, mean that we have to bear the compensation. The compensation could amount to hundreds of millions.
“We do not know how much the gambling companies earn, otherwise they would not be pursuing this to such an extent. But we will fight it in court first because we will fight to the very end rather than give even 10 sen of our money to gambling companies,” he said at a briefing on the obstacles to banning gambling in Kedah last night.
The remarks follow the Federal Court’s unanimous dismissal on Aug 12 of the Kedah government’s application for leave to appeal against a ruling that invalidated its decision to stop issuing and renewing business premises licences for gambling outlets.
The three-member panel, comprising Datuk Rhodzariah Bujang, Datuk Collin Lawrence Sequerah and Datuk Azmi Ariffin, also ordered the state government to pay RM50,000 in costs.
Muhammad Sanusi said any compensation claim would have to be scrutinised in court, including the actual income declared by gambling operators to the Inland Revenue Board.
“While operating in Kedah, did they declare their actual income to the Inland Revenue Board? If they did not declare it and then make a claim, it will be easy to challenge.
“If they did declare their income, we will have to examine in court how much they declared, and we will fight again over how much compensation they should receive for the period during which we did not issue the premises licences.
“But what will be revealed to us is how much the gambling companies earned in Kedah. They must have made profits if they are going to declare how much compensation we have to pay,” he said.
The state government’s refusal to issue or renew gambling premises licences has formed part of its broader efforts to restrict gambling activities in Kedah.
Muhammad Sanusi also claimed that he had been informed of alleged monthly protection payments linked to illegal gambling activities during the period when gambling premises licences were not being issued.
“An authority has informed me that protection for illegal gambling activities in Kedah, during the period when the premises licences were not being issued, amounted to RM7 million a month. Someone was collecting it and sharing it among themselves,” he said.
He did not identify the alleged collectors or provide further details to substantiate the claim of RM7 million in monthly protection payments.
The potential claims, if pursued, could expose the Kedah government to substantial financial liabilities and trigger another legal battle over the state’s efforts to curb gambling activities. - August 26, 2026
