Constitutional Court Overturns Decisions: Increasing Fees Only for Betting Shops is a Wrong Model for Increasing Municipal Budgets

More local communities in FBiH have tried in the last decade to impose higher utility fees on gambling operators than on other legal entities, but in all cases, the Constitutional Court of FBiH ruled in favor of the operators, writes Patria.

The Constitutional Court guarantees equality before the law for all private and legal entities in the country. Singling out any activity and taxing it with special, additional, more expensive fees is considered discriminatory.

Private gambling operators explain that they do not shy away from their obligations to the state. They employ around 5,500 workers in the FBiH. They pay tens of millions of KM annually to the federal treasury based on various taxes. All they ask from the state, they explain, is respect for equality, which is also guaranteed to them by the Constitutional Court of FBiH.

Municipalities of Kalesija, Kakanj, Bugojno, and others have tried to impose higher utility fees on betting shops. These are so-called utility fees for prominent businesses. The Constitutional Court of FBiH has so far declared all such decisions by local authorities unconstitutional.

The practice of cantonal courts in recent months is such that they no longer even send disputes between local authorities and gambling operators to the Constitutional Court, but rather rule in favor of the operators themselves, guided by previous experiences and rulings of the Constitutional Court of FBiH. The latest practice is that cantonal courts instruct the Tax Administration to withdraw funds from the municipal account that the municipality has illegally withheld from betting shops. Such a case was recorded in Bugojno at the beginning of February. The Cantonal Court in Novi Travnik ordered the Municipality of Bugojno to return 9,000 KM, plus interest, to the sports betting shops "Sport plus", because the Municipality illegally collected this money from the betting shops in 2013.

A similar verdict was reached in Tuzla.

It should be known that in all cases so far, these have mostly been smaller amounts that the municipality illegally collected from betting shops. For example, the Municipality of Bugojno increased the fees for betting shops from 400 to 600 KM. Thus, the difference was 200 KM per year per betting point.

The problem could potentially escalate in the case of Zenica. The Mayor Fuad Kasumović proposed, and the councilors supported by a majority vote, a Decision by which the fee for betting shops in Zenica was increased from 3,000 to 30,000 to 50,000 KM, depending on the location of the betting shop in the city. The dispute between the City of Zenica and gambling operators reached the Constitutional Court of FBiH in mid-February. If the Court rules in favor of the betting shops in this case as well, it could cost the city budget of Zenica several million KM. Far more than it has cost all municipalities before.

For example, Lutrija BiH closed nine branches in Zenica after the decision on higher utility fees for betting shops came into effect. If the Constitutional Court's ruling is favorable to gambling operators, the City of Zenica will have to compensate Lutrija for lost profits, calculated from the beginning of the year until the dispute is resolved.

In addition, operators explain that the Zenica city budget is already suffering financial damage. Betting shops are refusing to pay fees until the dispute between them and the City of Zenica is resolved before the Constitutional Court of FBiH, so the city budget has already lost the fees that betting shops previously paid into the city treasury.

Nermin Mandra, the mayor of the Municipality of Kakanj, confirmed for Patria that his predecessors had made decisions to increase utility fees for betting shops, which the Constitutional Court had overturned. He believes that it would be correct to regulate this area at the level of the Federation of FBiH, to set uniform rules for all municipalities, which would avoid any possibility of manipulation, writes Patria.