RIGA - Prime Minister Aigars Kalvitis offered to reopen a law granting the right to regulate gaming institutions only to the federal government, he told journalists on Nov. 21.
The announcement came after public uproar over Parliament's decision to strip the rights from municipalities - namely to determine zoning restrictions on casinos, gambling houses and slot machine halls.
Parliament passed the law on Nov. 17 with support from the left-wing opposition, while coalition partner New Era decried the legislation, saying it would lead to the government's demise.
But the outrage continued, with dissatisfaction coming from Kalvitis' People's Party and Latvia's First Party, another coalition member.
Riga gambling house owners rejoiced at the law, since the Riga City Council has adopted restrictions on where casinos can be located in the capital; it wanted all casinos and slot machines to be concentrated in hotels. Many casinos and slot halls stood to lose out from the city's restrictions.
"We are glad that Saeima, (Latvia's parliament) despite the controversy, has passed a pragmatic, carefully weighed law in the state and public's interest," Girts Ludeks, director of the Latvian Gaming Business Association, told the Leta news agency.
Municipalities condemned the law, and the Union of Regional Governments appealed to the president to file a counter proposal against the legislation.
However, even the People's Party foresaw this eventuality and marked the law "urgent" so that the president could not send it to Parliament for further review. Vaira Vike-Freiberga criticized this move and said voters would evaluate it during the parliamentary elections next year.
After the vote, New Era head Einars Repse castigated the People's Party, saying Kalvitis was "digging his government's grave."
Allegations of corruption were also made, and the daily Diena took the rare step of printing how parliamentarians voted.
New Era said it may turn to the Constitutional Court to challenge its legality.
Despite the opprobrium directed at the People's Party, New Era said they would stay in the coalition.
The legislation will reportedly allow any company that submits the proper documents to a local municipality a permit to have gaming on their premises. The People's Party, a right wing party and the second-largest in Parliament, said the law was necessary since gambling needed to be regulated countrywide by the federal government.
Head of the People's Party Atis Slakteris said on the television program "Kas Notiek Latvija" (What's Happening in Latvia) that the debate came down to who had the right to regulate the gaming industry: the federal government or local municipalities.
What worried many of the legislation's opponents was the speed with which it was rushed through Parliament, the absence of presidential scrutiny, and stripping the rights of municipalities to control gaming in the run-up to restrictions in Riga, where the gaming industry is an ultra-lucrative business.
All this cast serious doubt on the People's Party intentions, and integrity.
"Municipalities have the tendency to change the rules governing the organization of gambling depending on the political currents, who rules in the populated areas. For example, the city of Jurmala's compulsory regulations have been amended four times in three years," Mihails Pietkevics an MP from the People's Party wrote a day after the legislation was passed. "That's not normal."
The Riga municipality decided to enact tough legislation, taking effect in January of 2006, to restrict casinos and gambling houses to hotels. The number of slot machines and casinos has expanded dramatically in recent years, leading to calls for tighter control over the industry.