Can states ban lottery licences solely on moral grounds, according to the court?

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States Cannot Solely Ban Lottery Licences on Policy Objections, Rules Court

The Court of Appeal has ruled that state authorities cannot prohibit lottery and gambling businesses based purely on policy objections. The court determined that state powers in this regard are confined to matters explicitly listed under the Federal Constitution's Ninth Schedule and the Local Government Act. Licence decisions must be substantiated by factors directly related to building conditions, such as safety, cleanliness, and the prevention of public nuisance, rather than a general opposition to the nature of the business itself.
State Authority Limitations on Licensing

The Court of Appeal's decision clarifies the extent of state authorities' powers concerning the issuance and renewal of lottery licences. It was established that state powers are restricted to the domains specified in the Ninth Schedule of the Federal Constitution and the Local Government Act. This means that any regulatory actions or decisions related to licensing must fall within these defined legislative frameworks.
Grounds for Licence Decisions

The court stipulated that decisions concerning lottery licences must be grounded in tangible, operational concerns. These include ensuring the safety of premises, maintaining cleanliness standards, and preventing any activities that could constitute a public nuisance. The ruling explicitly states that a general moral objection to gambling businesses is not a sufficient legal basis for prohibiting them.
Precedent of Long-Standing Operations

In its deliberation, the court also took into account the operational history of some businesses. It was noted that certain lottery operators have been conducting their business in the same locations for several decades. This observation underscores the established nature of these operations and implies that a sudden ban based on policy grounds, without addressing specific operational deficiencies, is legally untenable.
Ongoing Legal Challenge by Kedah

Despite the Court of Appeal's ruling, Kedah state authorities have indicated their intention to pursue the legal challenge further. The state plans to appeal the decision to the Federal Court, signifying a continued dispute over the authority to ban lottery licences. This legal battle originated in November 2021 when the state announced a halt to the issuance and renewal of such licences, a move that was subsequently challenged by industry operators.

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Can states ban lottery licences solely on moral grounds, according to the court?

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