Operators fight Latvian gambling suspension in court

14 May 2020

The Constitutional Court of Latvia has initiated two legal cases from operators challenging the country’s suspension of all gambling licenses.

Online gambling was banned in Latvia in April, after clarification was issued on the country’s emergency coronavirus (Covid-19) bill passed in the Saeima of the Republic.

The bill - signed by the country’s president, Egils Levits, on 22 March - called for the closure of all land-based venues but initially left the status of online gambling unclear. It called for a prohibition on gambling and lotteries “except for interactive gambling, numerical lotteries and instant lotteries".

Yet in the very next article of the bill, it said that the Lotteries and Gambling Supervisory Authority “shall suspend all gambling licenses for physical gambling venues [...] interactive media and/or via electronic communication services".

But on 8 May, the First Chamber of the Constitutional Court of Latvia initiated a case from Optibet operator Enlabs, which the court said had been “deprived of the right to conduct commercial activities - to organize gambling in an interactive environment - and to earn income from it.”

The operator said the emergency bill violated Article 105 of the Satversme (Constitution) of the Republic of Latvia, which deals with property rights.

"Everyone has the right to own property,” Article 105 reads. “Property may not be used against the public interest. Property rights may be restricted only in accordance with the law.

“Compulsory expropriation of property for the needs of the public shall be permitted only in exceptional cases on the basis of a separate law against fair compensation.”

Enlabs said the right to property in the Satversme included the right to conduct business. The operator added that the restriction of its ability to conduct business was “disproportionate to its legitimate aim to deter the society from wasting expenditures.”

In addition, Enlabs said the bill violated Article 49 of the Treaty on the Functioning of the European Union (TFEU).

“Restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited,” Article 49 reads. “Restrictions on the opening of agencies, branches or subsidiaries by nationals of Member States who have established an undertaking in one Member State shall also be prohibited.

“Freedom of establishment includes the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies.”

Four days later, a second challenge was initiated, this time from the Novomatic-owned gaming hall and online gaming operator Alfor Group, which operates Admirāļu Klubs.

Alfor objected to the suspension based on Article 105 of the Satversme, as well as the opening Article, which declares Latvia an independent democratic republic and Article 91, which says “All people in Latvia are equal before the law and the court."

In addition to violating a right to property, Alfor said the bill violated the “legitimate expectations” from Article 1 and the principle of equality in Article 91.

The Saeima of the Republic of Latvia has been invited to submit a reply to Enlabs's case by 8 July and Alfor’s by 12 July. The deadlines for preparing the cases come three months after these dates.