Constitutional Court of Latvia Invalidates Riga’s Gambling Ban

Constitutional Court of Latvia Invalidates Riga's Gambling Ban

In a significant legal development, the Constitutional Court of Latvia rendered a pivotal verdict, deeming the ban on gambling across Rīga unconstitutional due to the municipality's failure to provide substantiated justifications for the prohibition within specific areas.

The case arose following petitions by several gambling entities, including Olympic Casino Latvia Ltd, Alfor Ltd, and Joker Ltd, who sought an assessment of the compatibility of Rīga's spatial plan with constitutional provisions safeguarding property rights and delineating limitations on property expropriation for public purposes.

Central to the dispute was a provision embedded within the Rīga spatial plan, which imposed a sweeping prohibition on the organization of gambling activities and related services throughout the entire administrative jurisdiction of Rīga, with only limited exceptions permitting such activities within four- or five-star hotels.

Six years ago, the Riga City Council made a strategic decision to shutter 42 gambling establishments located within the city center. This move was followed by a decision in September last year to rescind 139 permits for gambling venues situated outside the city center, mandating their closure within a stipulated five-year timeframe.

In its deliberation, the Constitutional Court underscored the legal validity of gambling as a commercial activity operating within the framework of free competition, acknowledging the municipality's prerogative to assess areas subject to gambling restrictions autonomously. However, the court highlighted the imperative for such restrictions to be grounded in comprehensive territorial evaluations, as mandated by legislative authorization.

Yet, the court found Rīga municipality lacking in furnishing substantive rationale for the blanket prohibition on gambling activities outlined within its spatial plan, particularly within zones designated for commercial activities. It pointedly noted the absence of a holistic assessment encompassing key factors such as urban development, infrastructure availability, population density, and the interests of residents and traders – all crucial considerations for imposing judicious restrictions on gambling activities.

As a consequence, the Constitutional Court concluded that the impugned restriction on fundamental rights, as articulated within the contested norm, contravened constitutional provisions delineated under Article 1 and the first, second, and third sentences of Article 105, which safeguard property rights and circumscribe arbitrary limitations on economic activities.

The ramifications of this ruling extend beyond the legal realm, significantly impacting the iGaming industry landscape in Latvia, particularly within Riga, the nation's capital and a focal point for gambling enterprises. The verdict effectively nullifies the municipality's blanket ban on gambling, potentially paving the way for the reinstatement of gambling operations in previously forbidden areas.

Moreover, the ruling poignantly reminds us of the imperative for a balanced regulatory approach to governing gambling activities, underscoring the necessity for municipalities to conduct rigorous assessments and provide cogent justifications for imposing restrictions that impinge upon fundamental rights and economic activities.

As the legal discourse surrounding gambling continues to evolve, stakeholders within the iGaming industry will keenly monitor the aftermath of the Constitutional Court's ruling. This ruling has the potential to shape the trajectory of future regulatory frameworks governing gambling in Riga and its environs.