Riga City Council's restrictions on gambling halls ruled unconstitutional

RIGA - The Constitutional Court has ruled that restrictions on gambling halls in the administrative territory of Riga are unconstitutional, as the court informed LETA.

When introducing restrictions on a particular commercial activity, the municipality's decisions must be objectively justified and based on rational considerations, the Constitutional Court pointed out.

The case was examined following complaints filed by several entities that had obtained gambling licenses in the administrative territory of Riga based on permits issued by the municipality.

The contested provision stipulates that providing gambling services is not allowed in the entire administrative territory of Riga, except if such gambling venues are located in four- or five-star hotels.

Organization of a gambling business is a lawful commercial activity in the conditions of free competition, said the Constitutional Court. Municipalities have the right to independently designate places or areas of the municipality where organization of gambling services is restricted. But in doing so, the municipality must justify its decision in accordance with the applicable laws and regulations.

The Constitutional Court has concluded that Riga City Council has failed to justify why organization of a gambling business was prohibited in different areas of the city where commercial activities are otherwise permitted.

According to the Constitutional Court, municipalities, when imposing restrictions on organization of gambling businesses, must ensure, on the one hand, respect for the fundamental rights guaranteed to businesses by Article 105 and other provisions of the Constitution and, on the other hand, protection of the rights of residents by mitigating the possible risks of problem gambling.

In taking such decisions, municipalities have to assess, for example, location of different infrastructure facilities, population density, interests of residents and businesses, and other relevant aspects which may be the basis for imposing restrictions on the organization of a gambling business.

Therefore municipalities may ban gambling venues in a particular area, for example, in the vicinity of educational, cultural, sports facilities and complexes, recreational facilities and children's playgrounds.

Likewise, restrictions on gambling may be imposed near public transport stops, in low-rise and high-rise residential areas. Riga City Council had not carried out such assessment prior to imposing restrictions on gambling in the entire territory of Riga, said the Constitutional Court.

Consequently, Riga City Council's restrictions on gambling business go against the provisions of the Constitution. As a result, the Constitutional Court has declared the contested restrictions null and void.

The Constitutional Court opened the case following complaints filed by gambling companies Olympic Casino Latvia, Alfor, and Joker.

In 2018, the Riga City Council decided to close 42 gambling halls in the capital, which were located in the historic center and its protection zone, as well as in a mixed development area. An exception was made for four- and five-star hotels.

The gambling hall operators took the municipality to court. However, the Constitutional Court later ruled that the City Council's restrictions on the establishment of gambling halls in the historic center of Riga were compatible with the Constitution.

In order to close gambling halls in the rest of the city, the Riga City Council envisaged such a possibility in the new spatial plan adopted in 2021.

The spatial plan was temporarily suspended by the Environment Protection and Regional Development Ministry, thus delaying the closure of gambling venues. However, this decision was later reversed and the Riga City Council in September 2023 made the decision to annul 139 gambling permits.

The municipality said that this would protect the public from the negative effects of gambling.