Municipalities that illegally increase fees for betting shops must return the money sooner or later

A large number of municipalities in the Federation of BiH are trying to fill municipal budgets by increasing utility fees for gambling operators. This practice has generally proven to be wrong. In all previous cases, the Constitutional Court of the FBiH ruled in favor of gambling operators, to the detriment of the local community. The Constitution of the FBiH stipulates that every person in the territory of the Federation, legal or natural, must be equal before the law. Experts in tax policy explain that this means that a municipality or city cannot arbitrarily decide to whom and how much money it wants to take based on utility fees. 

The City of Zenica is the latest example, where gambling operators sought protection from the Constitutional Court, considering that the city violated the Constitution by adopting a partial decision on the enormous increase of utility fees only for betting shops in this city, while other activities remained spared.

Mayor Fuad Kasumović proposed, and the city councilors supported by a majority vote, the decision to increase utility fees in Zenica by up to 50,000 KM annually per branch. At the same time, the decision does not apply to gas stations, banks, or telecom operators, even if they are located next door to betting shops. For them, for comparison, the fee remains 3,000 KM annually according to the decision of the city authorities in Zenica. At the request of several legal entities, the Prime Minister of the Zenica-Doboj Canton, Miralem Galijašević, requested an assessment of the constitutionality of that decision, so Zenica is now awaiting the verdict.

Betting shops explain what can happen when local communities illegally collect utility fees, and courts later rule in favor of the affected business entities. As a rule, it is bad for the municipal budget: 

„An example is the municipality of Posušje, which has owed one betting shop 8,778 KM for almost seven years, and since there is no money to repay the debt, it has grown to 25,800 KM with interest so far and is still growing“.

„The latest example is the municipality of Hadžići, which was ruled by the court to return 26,300 KM to a betting shop from illegally collected utility fees, and the municipality of Hadžići informed that there is not enough money in the budget and that the debt will be repaid from the budget for 2018. Due to the same reason, non-compliance with the equality before the law guaranteed by the Constitution, the municipalities of Kakanj, Visoko, Bugojno, Ilidža, etc. also had to return money“. There are, explain gambling operators, more than 100 court rulings that confirm that the type of activity cannot be a criterion for determining the amount of utility fees. 

Operators warn that the thesis of the Mayor of Zenica, Fuad Kasumović, that they will not have to return money to betting shops even if the Constitutional Court rules in favor of betting shops, is not true, supporting this with the claim that „court rulings apply only from the moment of their adoption“. 

„In the ruling number 070-0-Uvp-08-000526, the Supreme Court of the FBiH clearly and unequivocally stated that rulings have a declaratory character, which means that they apply to the regulation in its entirety, i.e., from the moment of its adoption, which is also proven by earlier court rulings in which municipalities and cities had to return the full amount of money collected from unconstitutional decisions on utility fees to betting shops“, remind gambling operators. 

„Hopefully, these cities, which had to return the money, can serve as an example to others that the Constitution of the FBiH must be respected“, they conclude.