Latvian Constitutional Court Strikes Down Rīga’s Gambling Ban

This landmark decision came after a legal battle initiated by major gambling entities Olympic Casino Latvia Ltd, Alfor Ltd, and Joker Ltd, challenging the city’s spatial plan restrictions.

Upholding Property Rights

The heart of the legal challenge was Article 105 of the Latvian Constitution, which protects property rights, allowing restrictions only through lawful means. The gambling companies argued that the city’s ban violated this fundamental right, emphasizing that compulsory expropriation of property for public needs must be an exception and accompanied by fair compensation.

The Court’s Reasoning

The Constitutional Court’s ruling shed light on the essence of gambling as a legitimate business activity, deserving of fair competition. While the Court recognized the municipality’s power to regulate where gambling can take place, it stressed the need for any restrictions to be justifiably grounded within legal frameworks.

The contested norm, which restricted gambling to only four- or five-star hotels and led to the closure of numerous gambling venues in Rīga, was found lacking in rational justification. Particularly, the municipality’s prohibition of gambling in certain functional zones, where commercial activities were otherwise permitted, was criticized for its lack of a comprehensive assessment.

A Thorough Assessment Required

The Court underscored the importance of a detailed evaluation before imposing gambling restrictions, taking into account urban development, infrastructure, population density, and the interests of the community.

The failure to conduct such an assessment led the Court to conclude that the restriction on fundamental rights was incompatible with the Constitution, thereby nullifying the contested provision.

Our Comment on the Article

The Constitutional Court of Latvia’s ruling is a significant moment for the iGaming industry in the country, particularly within Rīga. It reaffirms the principle that while municipalities have the authority to regulate industries within their jurisdictions, such powers must be exercised within the bounds of the law and with due regard for property rights.

This decision not only impacts the gambling entities involved but also sets a precedent for how business activities, particularly in the iGaming sector, are regulated in Latvia. It emphasizes the need for transparent, reasoned, and lawful regulation that balances the interests of businesses with those of the public and urban development.