If the territorial plan establishes restrictions on specific types of commercial activities, the actions of the local government must be objectively justified and based on rational considerations, the Constitutional Court noted.
The case was considered based on applications from several persons who received licenses for gambling establishments on the basis of permits issued by the local government to open gaming halls in certain places in the administrative territory of Riga.
The contested norm provided for a ban on the organization of gambling and the provision of corresponding gambling services throughout the administrative territory of Riga, with the exception of four- or five-star hotels.
The court ruled that the organization of gambling is a legal commercial activity carried out in conditions of free competition. The legislator has given self-government the authority to independently determine in which places or territories the organization of gambling can be restricted. The municipality also has the right to designate in the territorial plan an unlimited number of zones where gambling is not permitted. However, the municipality must comply with the principle of territorial assessment.
According to the Constitutional Court, the self-government was unable to justify why the organization of gambling is prohibited in the functional zones of the territorial plan, where commercial activity is provided as one of the types of permitted use of the territory.
The municipality, when introducing restrictions on the organization of gambling, must ensure, on the one hand, compliance with the fundamental rights guaranteed to merchants by Article 105 and other provisions of the Constitution, and on the other, the protection of the rights of individuals by reducing possible risks of gambling addiction.
In accordance with the principle of site assessment enshrined in the Gambling Act, the municipality must evaluate, for example in the territorial planning process, the development area and the location of infrastructure, population density, the interests of residents and merchants and other aspects that may serve as a basis for introducing restrictions for organizing gambling.
In addition to the restrictions on gambling established by the gambling law, the municipality may, following assessing the building area and the location of infrastructure in a particular area, prohibit gambling near, for example, educational, cultural, sports facilities, recreational facilities and children’s playgrounds.
Similarly, restrictions on gambling can be introduced following appropriate assessment in areas with a large flow of people, for example, near public transport stops, as well as in areas of low-rise and high-rise buildings. The municipality did not conduct such an assessment before introducing restrictions on gambling throughout the administrative territory of Riga.
At the same time, the court ruled that individual assessment of each site in the process of territorial planning when introducing restrictions on specific types of gambling activities is not rational and appropriate.
Consequently, the restriction of fundamental rights contained in the contested norm is incompatible with the provisions of the Constitution. The contested norm was declared invalid from the moment when the fundamental rights of persons were violated.
The case was initiated by the gambling companies OOO Olympic Casino Latvia, OOO Alfor and OOO Joker LTD.
In 2018, the Riga City Council decided to abolish 42 gambling halls located in the historical center and its security zone, as well as in the mixed development zone. An exception was made for four- and five-star hotels.
The owners of the gambling halls went to court, but the court ruled that the restrictions imposed by the Duma were in accordance with the basic law. There are currently no gambling halls in the city center.
However, in the new development plan for Riga, the municipality provided for the possibility of closing gambling halls throughout the city.
The plan’s entry into force was temporarily suspended by then-Minister of Environment and Regional Development Artur Tom Plesz, which delayed the closure of gambling establishments. However, the next minister, Māris Springuks, reversed this decision, and in September 2023, the Riga City Council revoked 139 permits for gambling establishments located outside the city center. These gambling establishments must be closed within five years.
The Latvian Gambling Association, on the contrary, believes that the property rights of enterprises, the principle of legitimate expectations and the rights of foreign investors are being violated.
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2024-04-08 20:47:35
