Operator News

Latvia’s Constitutional Court rules that Riga’s gambling ban is unconstitutional

By Phil - 9 April 2024

Following a legal challenge by a host of operators, the Constitutional Court of Latvia has ruled that the prohibition on gambling organisations within Rīga, which led to the closure of 42 gambling venues in the city centre, is unconstitutional.

Brought in six years ago by Riga City Council, the ban prohibited gambling in Rīga except in four or five-star hotels. Added to this, the council then moved to revoke the licences for 139 gambling halls outside of the city in last September 2023 giving them five years to close.

The council’s decision was challenged by Olympic Casino, Alfor and Joker who claimed that the spatial plan violated Article 105 of the Constitution, which safeguards property uses and licence restrictions through lawful channels.

In its ruling, the Constitutional Court highlighted that gambling was a legal commercial activity subject to fair competition. It ruled that the municipality failed to give reasons for prohibiting the legal activety of gambling in certain zones.

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.

Whilst the council claimed it was helping protect residents from the harmful effects of problem gambling, the Latvian Gambling Business Association said the move violated the rights of merchants to property, the principle of legitimate expectations, as well as the rights of foreign investors.

The legality of the move became unclear when the territorial planning was stopped by the then Minister of Environment Protection and Regional Development Artūrs Toms Plešs, delaying the closure of gambling halls. However, the next minister, Māris Sprindžuks, revoked his predecessor decision and once again annulled 139 gambling licences in September 2023.

In 2023, gambling revenues reached €288,633m in Latvia, marking an increase of nine per cent with 52.4 per cent of this total generated by land-based gambling. This was down from 80.4 per cent in 2019. Currently, only three casinos, 194 amusement arcades, one bingo amusement arcade and 76 betting venues operated in Latvia in December last year.

Of the total 194 gambling halls, 79 (40.7 per cent) were in Rīga, 52 (26.8 per cent) were in six largest cities, while 63 (32.5 per cent) were in 31 Latvian municipalities, employing a total of 2,722 people.