A case initiated with respect to a norm that prohibits from organising gambling in the digital environment
On 8 May 2020, the 1st Panel of the Constitutional Court initiated the case “On Compliance of Section 9 of the Law “On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19” with Article 105 of the Satversme of the Republic of Latvia and Article 49 of the Treaty on the Functioning of the European Union”.
The Contested Norm
Section 9 of the law “On Measures for the Prevention and Suppression of Threat to the State and Its Consequences Due to the Spread of COVID-19” :
“For the duration of operation of this Law the Lotteries and Gambling Supervisory Inspection shall suspend all the licences to operate gambling both in physical locations where gambling is organised (licence of a casino, license of a gambling hall, licence of a bingo hall) and in the interactive environment and (or) using the intermediation of electronic communications services.”
Norms of Higher Legal Force
Article 105 of the Satversme of the Republic of Latvia (hereafter – the Satversme):
“Everyone has the right to own property. Property shall not be used contrary to the interests of the public. Property rights may be restricted only in accordance with law. Expropriation of property for public purposes shall be allowed only in exceptional cases on the basis of a specific law and in return for fair compensation.”
Article 49 of the Treaty on the Functioning of the European Union (hereafter – TFEU):
“Within the framework of the provisions set out below, restrictions on the freedom of establishment of nationals of a Member State in the territory of another Member State shall be prohibited. Such prohibition shall also apply to restrictions on the setting-up of agencies, branches or subsidiaries by nationals of any Member State established in the territory of any Member State.
Freedom of establishment shall include the right to take up and pursue activities as self-employed persons and to set up and manage undertakings, in particular companies or firms within the meaning of the second paragraph of Article 54, under the conditions laid down for its own nationals by the law of the country where such establishment is effected, subject to the provisions of the Chapter relating to capital.”
The case was initiated with respect to an application by limited liability company “OPTIBET”. On the basis of the contested norm, the Lotteries and Gambling Supervisory Inspection suspended the licence to organize gambling issued to the applicant. Hence, the applicant had been fully deprived of the right to engage in commercial activities – to organise gambling in interactive environment – and gain income from it.
The applicant notes that the contested norm restricts a person’s right to property, established in Article 105 of the Satversme, which, inter alia, comprises the right to engage in commercial activities, which includes commercial activities on the basis of a licence. It is alleged that this restriction on fundamental rights has not been established by a legal norm adopted in procedure set out in regulatory enactments, likewise, it is said to be incommensurate to its legitimate aim – to protect society from the spread of Covid-19 since gambling in interactive environment is organised without any actual interactions between persons.
The restriction defined in the contested norm is said to be disproportional to its legitimate aim to deter society from inexpedient expenditure because this restriction on fundamental rights is not appropriate for reaching the legitimate aim. Moreover, there are more lenient measures for reaching the legitimate aim; likewise, the benefit that society gains from this restriction on fundamental rights does not outweigh the damage caused to a person as the result of the restriction on fundamental rights. The applicant also holds that the contested norm places unfounded and disproportionate restrictions on the freedom of establishment included in Article 49 of TFEU.
The Constitutional Court has requested the institution, which issued the contested acts, the Saeima of the Republic of Latvia, to provide a reply on the facts of the case and legal reasoning by 8 July 2020.
The term for preparing the case is 8 October 2020. The Court shall decide upon the procedure and the date for hearing the case after the case has been prepared.
Open in PDF: 2020-26-0106_PR_par_ierosinasanu_ENG
Linked case: 2020-26-0106