Online gambling operators in Latvia have warned the government that they may face multiple lawsuits because of the temporary ban on the country’s online gambling activities. The ban has been enforced due to the ongoing coronavirus pandemic.
The head of LIAB (Latvian Association of Internet Gambling), Janis Tregers recently issued a press statement in this regard. The association slammed the government’s decision to treat online gambling as one of the activities which should be temporarily stopped. The authorities claimed that this would help to contain the spread of Covid-19 in the country. Direct measures seem to be working but there are no guarantees that numbers won’t increase in the future. Furthermore, it is not clear how online gambling would in any way impact the number of cases of the virus.
LIAB terms the step as one without any economic logic
As per Tregers, the decision taken by the government didn’t have any economic logic. Latvian online gambling operators had already reported a drop in the percentage of active gamblers on their websites by 26%. This occurred shortly after the government declared a state of emergency on March 14. Tregers said that cutting the online gambling industry’s revenue to zero will cause the demise of Latvia’s domestic online gambling sector.
Tregers heavily criticised parliamentarians for negating everything that had been done to tackle illegal gambling portals in Latvia. Measures that had been undertaken by the government in this regard were prohibiting the financial establishments from processing payments to/from international gambling portals not having the Latvian gambling license, and urging Internet Service Providers (ISPs) to block their domains.
In Tregers’ opinion, the internationally licensed gambling portals will soon fill the void created by banning the domestic sites. The step will also impact the government’s earnings from the domestic online gambling industry. The members of LIAB were to make contributions to the tune of € 20 million to the government this year. Tregers claims that this amount was good enough to fund higher wages of one-third employees working in the state’s medical institutions.
He further emphasised that it took the domestic gambling operators almost a decade to get back on their feet after the 2008 meltdown. The ban placed by the government might lead to a major tax shortfall for many years.
Optibet backs LIAB’s and online gaming operators stance
Georgian Ustinov, the CEO, Enlabs AB, a company which runs in Latvia under brand name Optibet, backed LIAB’s stance. Mr Utsinov said the government has taken a hasty, ill-considered decision which will lead to €160 million of investment protection claims.
He stressed that the ban infringes upon the domestic online licensee’s commercial rights in the most unjustifiable manner. No other EU Member has placed any restrictions on online gambling as a part of their Covid-19 response.
Lottery operations in Latvia were not subject to the ban which seems to be contradictory. Ustinov also said that if the government’s intent was to prevent excessive and unnecessary spending, it could have opted for other methods, including limiting the time and money spent on online gambling sites.
If you are operating an online gambling company in Latvia or were considering opening one, contact Fast Offshore to discuss how this could impact you. We are also on hand to provide expert advice for many other jurisdictions and can work with you to find the perfect solution.