Following the application of two gambling companies, the Latvian Constitutional Court ruled on April 4 that the restriction of gambling activities imposed by the Riga municipality across the territory of the administrative area is deemed unconstitutional. The Court’s decision is reportedly based on the failure of Riga officials to justify the reasons for the gambling ban to be imposed on specific parts of the administrative area.

Gambling Companies Requested Judicial Assessment:

As lsm.lv reports, the Constitutional Court ruling comes after gambling companies Olympic Casino Latvia Ltd, Alfor Ltd, and Joker Ltd motioned to receive the Court’s evaluation of the Riga spatial plan‘s compliance with Article 105 of the Constitution. As reported, this legal provision determines the rights on properties and the circumstances in which the law enforcement may be sought to restrict such properties and exercise the associated rights. In this regard, the Latvian Constitution allows compulsory expropriation of property for public needs in exceptional cases and relies on a separate law against fair compensation to exercise this measure, as the source reports.

Riga Restricted Gambling to Exclusive Resorts:

The provision is reportedly conflicted with the Riga City Council’s norm introduced to prohibit gambling operations and the provision of gambling services across the entire administrative territory of Riga. Additionally, Riga’s norm anticipated that gambling activities may exclusively be organized in venues like four-star or five-star hotels. According to lsm.lv, such a norm served as a base for the Riga City Council to demand closure of 42 gambling venues in the city center within the next five years. In September of 2023, the authority cancelled 139 gambling licenses for venues located outside the city center to ensure the norm implementation.

Legal Commercial Activities:

However, the Constitutional Court has addressed the issue to find that gambling operations represent a legal commercial activity exercised under the commercial rules of free competition. The Court reportedly ruled that the norms imposed by the Riga Municipality are not compliant with the Latvian Constitution and provided for the municipality to make the assessment of its territories and propose those that should be restricted for gambling operations.

Legal Land Use:

As the source reports, Riga City Council is also given the right by the law to use the local spatial plan to indicate as many areas to be subject to gambling ban as the City considers necessary. However, the City is reportedly legally bound to comply with territorial evaluation principles set forth in the authorization approved by the legislator. The Constitutional Court’s decision is reportedly also based on the finding that Riga failed to provide the grounds to have the organization of gambling activities banned in the areas designated as functional by the spatial plan. According to lsm.lv, the plan refers to the use of the designated territories and includes commercial activities in the permitted utilization scope.

Court Ruled Against Restriction of Fundamental Rights:

Under the Law on Gambling, the spatial planning process must take into account a series of factors, such as the location of infrastructural facilities, housing areas, population density, and other relevant factors that a municipality may use to impose gambling restrictions to certain areas. According to the source, the municipality of Riga failed to conduct such an evaluation prior to onset of gambling restriction across the administrative area. For this reason, the Latvian Constitutional Court ruled against the restriction on fundamental rights exercised in the disputed norm.

The Court considered the norm incompatible with Article 1 and a part of Article 105 of the Constitution to declare it null and void, as reported by lsm.lv.