Constitutional Court grants municipalities authority over VLTs in landmark ruling

The Czech Constitutional Court on Tuesday issued a groundbreaking verdict that grants the country’s towns and cities the authority to decide if and where VLTS, video lottery terminals, are placed in their municipality. Until recently, the Finance Ministry had the final say-so in the matter. Michael Canov, the mayor of Chrastava, the city that went to court over the ministry’s gaming directive and brought about the landmark ruling, speaks on the issue.

Photo: Barbora Kmentová
Across the Czech Republic, gaming machine bars, so called hernas, are a common sight – and municipalities trying to limit the number of such establishments until now were fighting a hopeless battle. If a city or town banned traditional slot machines, operators soon replaced them with video lottery terminals, which municipalities could not ban, since the placement of such terminals fell under the authority of the Finance Ministry.

On Tuesday, the Constitutional Court issued a breakthrough ruling, arguing that since video gaming terminals served the same purpose as slot machines, they could be banned by municipal authorities. Tomáš Langášek, secretary general of the Constitutional Court, sums up the verdict.

“Municipalities will now be able to not only decide whether or not regular gaming machines should be allowed on their territory, but also will have the authority to say no to interactive video gaming terminals.”

Michael Canov, the mayor of Chrastava, the city that brought about the landmark ruling, saw himself confronted with a problem that many other mayors across the Czech Republic are faced with: After he attempted to ban slot machines and thus limit the number of herna bars in his city, the slot machines were replaced with video gaming terminals, rendering his efforts useless. Mr. Canov explains the significance of the verdict.

“When we issued a directive that limited the number of gaming devices in our municipality, there were no video gaming terminals here at all. Then, the Finance Ministry placed 21 of them in our municipality, against our will, and another dozen others were to come. We protested that decision and issued a directive banning those terminals.

“On the grounds of that directive, the Finance Ministry filed a complaint with the Constitutional Court, which ruled in our favor. It is an important verdict because municipalities can now decide if and where in the town such gaming terminals are located, and the Finance Ministry will no longer be able to make that decision against the will of the municipalities.”

A number of other towns and cities have already announced they will issue a similar directive to reduce the number of herna bars in their municipality. Among them are the city of Mladá Boleslav and Prague 4. Mr. Canov again.

Michael Canov
“The reactions have generally been positive; a number of municipalities are going to come up with a similar directive, which will clearly state that a video gaming terminal falls into the category of gaming devices, and that therefore, it will be up to the municipality to decide where it can be placed.”

Many mayors argue that gambling inevitably leads to a higher crime rate in the municipality. However, limiting the number of such gambling devices in towns and cities would also lead to a drop in tax revenue. The Interior Ministry, which reviews municipal directives, has announced that it will propose the reversal of this new directive. Past efforts to ban video gaming terminals, most recently with a legal amendment to the lottery act, were unsuccessful.