Malaysian Prime Minister Najib Razak said his government had dropped a proposal to legalise sports betting amid protests by groups who fear it will create more social ills.
The uproar over sports betting erupted after Ascot Sports, a company controlled by influential tycoon Vincent Tan, said in May it had been granted a licence to offer odds for the hugely popular English Premier League season.
The government denied such a licence had been issued and said that it was still reviewing its decision as Muslim groups, opposition leaders and even members of the ruling government coalition opposed the new licence.
"I hereby wish to announce that the government has decided that the licence will not be issued," Najib told state media late Friday.
"Although there were groups who supported as well those who did not support or opposed the decision, it was clear to the government that a majority of the people did not agree that the licence be issued to Ascot Sports," he added.
Opposition political parties said on Thursday they were planning a mass street protest next month against the proposal.
"We have too many social problems -- drug addiction, free sex and baby dumping," Kamarulzaman Mohamad, youth secretary of the conservative Pan-Malaysia Islamic Party (PAS) told AFP.
"Sports betting will add to our problems as most youths watch football. They will be influenced to borrow money," he added.
Party officials told AFP Saturday they have yet to decide whether the demonstration will be cancelled following Najib's announcement.
Malaysia bans its majority Muslims from gambling but allows betting at a casino operated by the Genting Group, on the national lottery and on horse-racing.
Berjaya, the property-to-gaming group which has a 70 percent state in Ascot Sports, has said the illegal sports betting market in Malaysia was worth as much as 20 billion ringgit (six billion US dollars) a year.