Latvia Online Casino Operators Could Submit Lawsuit Against the State

Latvia online gambling providers express disappointment about the latest government decision to ban online casino operation in the country. They have already sent the warning to the government and threaten with a lawsuit seeking significant financial reimbursement...

Background of the Problem

Head of the Latvian Association of Internet Gambling (LIAB), Jānis Trēgers has criticized the government’s decision to prohibit online gambling activity together with land-based casino operations in a fight with the coronavirus pandemic. Trēgers considers the decision against any “economic logic.”

Latvian online companies are facing catastrophic effects of the state decision. Its number of active gamblers have dropped by 26% after the government declared a full ban on March 14. Trēgers noted that “reducing the industry’s revenue to zero” would mean the death of the local online market.

LIAB Head slammed the officials for having “swiped a bold stripe over everything that had been done in Latvia to combat illegal gambling sites.” One of the included measures is the prohibition of domestic financial services from processing payments on behalf of outside gambling sites without a Latvian license. The government also urged an immediate ban of these sites’ domains.

What Will Happen

According to the Trēgers words, internationally licensed providers will take the leading position in the state, leaving the government without revenues. LIAB members are ready to contribute €20m to government, which would be “enough for one-third of all employees in state medical institutions to receive higher wages.”

Trēgers has also stressed other potential problems for operators. He reminded the officials on the situation involving the economic collapse 2008 and how much time they needed to recover the entire sector. This ban could result in the same consequences and notable tax shortfall in the upcoming years.

The LIAB Head is not the only one against the controversial decision. Enlabs AB (operating as Optibet brand in Latvia) CEO Georgian Ustinov warned that the government’s “ill-considered and hasty decision” to stop online gambling operations will lead to “investment protection claims” worth up to €160m. Ustinov further mentioned that the prohibition “unjustifiably infringes” the commercial rights of local online licensees. He pointed out to other EU members states which didn't prohibit online gambling operators from conducting their activities. Additionally, Latvian lottery had been “unjustifiably excluded” from the COVID-19 ban, which is an obvious indication of unapproved state aid.

Ustinov concluded by stating that eventual government intention to “prevent possible unnecessary and excessive spending” could be achieved in other ways without banning the online gambling operators. These measures could include setting compulsory spending and time limits.

Meanwhile, The Lotteries and Gambling Supervisory Inspection of Latvia (IAUI), has requested clarification from the government regarding the decision and we are all waiting to hear the response...

Source:

“Latvia’s online gambling ops warn gov’t of COVID-19 ban lawsuits“, calvinayre.com, March 25, 2020.