The Constitutional Court of Latvia has ruled that the restrictions on the organisation of gambling in Riga’s entire administrative territory are in breach of the Constitution.
When determining the restrictions of a specific commercial activity in the spatial plan, the municipality’s actions must be objectively justified and based on rational considerations, the Constitutional Court ruled.
The case was examined on the basis of the applications of several persons who have received licenses to operate gambling on the basis of permits issued by the municipality to open gaming halls in certain places in the administrative territory of Riga.
The challenged norm dictates that it is prohibited to organise gambling and provide gambling-related services within Riga’s administrative territory, except four or five-star hotels.
The Constitutional Court concluded that the organisation of gambling is a legal form of business in conditions of free competition.
The legislator has provided the municipality the right to assess on its own where in its administrative territory gambling restrictions should be imposed. When it comes to territory planning, municipality has the right to establish as many territories as it wants in which gambling is not allowed. However, the municipality must comply with the principle of assessment of the territory set out in the authority granted by the legislator.
The Constitutional Court concluded that Riga municipality did not justify why organisation of gambling is disallowed in functional zoning of the spatial plan, where commercial activity is intended as one of the permitted uses of the territory.
The Constitutional Court recognised that in the process of developing the spatial plan, the restriction on the organisation of gambling should be based on the assessment of the functional zoning of the specific territory.
The Constitutional Court emphasised that the local government, when establishing restrictions on the organisation of gambling, must ensure, on the one hand, compliance with the fundamental rights guaranteed to merchants in Article 105 of the Constitution of the Republic of Latvia and other norms of the Constitution and, on the other hand, the protection of the rights of persons by reducing the possible risks of gambling addiction.
In 2018, the Riga City Council decided to eliminate 42 gambling halls in the capital located in the historical centre and its protection zone, as well as in the mixed building area. An exception was made for four- and five-star hotels.
Owners of gambling businesses turned to court against Riga municipality. The Constitutional Court did rule, however, that the imposed restrictions were compliant with the Constitution. There are no gambling halls left in Riga’s centre.
In order to close all gambling halls within Riga’s entire territory, the municipal administration included this measure in its territorial planning passed in 2021.
The territorial planning was halted by then the Minister of Environment Protection and Regional Development Artūrs Toms Plešs, delaying the closure of gambling halls. However, the next minister – Māris Sprindžuks – cancelled the decision of his predecessor and annulled 139 gambling licences in September 2023. These gambling halls are required to close their doors in the next five years.
The municipality noted that this will help protect residents from the harmful effect of gambling.
Latvian Gambling Business Association, on the other hand, believes that the rights of merchants to property, the principle of legitimate expectations, as well as the rights of foreign investors are thereby violated.
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