As one of the most developed countries in the world, Switzerland’s delay in addressing the global phenomena of online gambling is surprising. The country best known for its neutrality, may soon find itself in the throes of battle between its very own citizens. The Swiss Experiment is here to document and deliver information on the on-going saga of Switzerland’s new gambling frontier. Before delving into the specific repercussions of new gambling laws, it’s important to understand just how much change the Swiss legislation is proposing, and in order to understand you must have a grasp of the Money Gaming Act.
The Money Gaming Act is Switzerland’s newest gambling legislation. It was passed by parliament at the end of September 2017, and it’s already drummed up a large amount of both support and criticism. Currently, the gambling industry of Switzerland is broken into two separate factions — casino games (poker, blackjack, etc.) and lotteries/ betting. The Federal Act on Games of Chance and Casinos (FGA) is responsible for the upkeep and running of Switzerland’s casinos. The FGA requires a license for the operation of any land casinos, and the operation of any online casinos is strictly prohibited. In addition to the FGA there is the Federal Gaming Board (FGB) which takes a closer supervision of casino game compliance.
The Federal Act on Lotteries and Commercial Betting (SLA) is the federal body responsible for the regulation of lotteries and other types of betting. On the whole, the majority of lotteries are banned throughout Switzerland. Exemptions are usually granted to lotteries used for charitable purposes. Just like casinos, a license is required for any lottery. To date, only two licenses have been granted to Swiss lotteries: Swisslos and Loterie Romande.
The Money Gaming Act aims to bring these two groups together under one overarching federal regulation. This act has been kicking about since 2014, and the recent vote by parliament has finally made the citizens of Switzerland take notice. While some things are kept relatively the same, such as needing a license to operate money games, other aspects are notably different. One of the biggest changes comes with the legalization of online gambling. The Swiss government is willing to grant licenses for the creation of online gambling sites, but only to casinos operators who already operate land casinos within Switzerland. By adding this stipulation, the Swiss government hopes to keep foreign operators out of the Swiss gambling market. If a foreign group wishes to operate an online casino within Switzerland, they must first team up with the owners of an existing licensed land casino. Not only will Swiss online casino operators be required to have a land casino license, they must also prove the commercial viability of their online casino endeavors before they receive a license.
Overturning the ban of online casinos is not the only change the Money Gaming Act is bringing about. Small scale poker tournaments will also be allowed under this new gaming act. As with casinos and lotteries, these tournaments will require a license. For permission to be granted, poker operators will have to abide by certain regulations such as: limited number of participants, limited amount for buy-in, and no-risk to either the operator or public space.
Currently the taxation of Switzerland’s gambling industry is almost nonexistent. Sports betting and lottery winnings are taxed if they exceed CHF 1,000, and casino winnings are not taxed at all. With the Money Gaming Act, taxation for lottery and betting winnings would decrease. Taxation of lottery and sports betting winnings would occur if they exceed CHF 1,000,000, however gambling gains would be open to income taxation.
Lastly, the Money Gaming Act would take a more proactive stance on protecting the citizens of Switzerland. Cantonal governments would be responsible for developing organizations to help with gambling addiction. These organizations would offer helpful resources such as therapy for those struggling with gambling addiction. In addition finding and helping addiction sufferers, the new regulations would ensure gaming operators would enforce a certain level of safeguard measures. These measures would provide transparency between operator and player and protect against sports competition manipulations.
It may be difficult to understand why Switzerland’s Money Gaming Act is drawing negative attention. On the surface, all of the changes seem to be progressive, but nothing too radical. However, the Swiss Experiment is going to delve deeper into this new legislation to see just what all the controversy is about.
As mentioned earlier, these new regulations would lift the ban on online gambling, and ensure that only Swiss operators were able to profit from this market. It’s not the change itself which is controversial, but rather the methods used to ensure this change. Everyone knows that just because something is illegal doesn’t mean it doesn’t happen, and this is especially true for online interactions. So, even though the Swiss government claims that only Swiss operators will profit from online casinos, how can they be sure that no foreign operators will try to weasel their way in via the World Wide Web? The proposed method to keep foreign entities out of the Swiss online casino market is by blocking certain domain names. The Swiss Federal Gaming Board and the Intercantonal Betting Board will be responsible for creating a blacklist of non-licensed online casino providers. Domain names that end up on the blacklist will be passed along to internet access providers, and these providers must block access to the specified domains within a certain timeframe. In exchange for blocking non-licensed domain names, internet access providers will be compensated for their efforts.
It’s easy to understand how this method has incited debate. A government agency determining what its citizens can and cannot see on the internet violates any concept of a free and open internet. Blocking certain domain names infringes on a citizen’s personal rights to use the internet how they choose. However, after much discussion, members of Parliament agreed that the use of a blacklist was the only way to ensure the safety of Swiss citizens against foreign gambling operators.
Despite passing in the parliament, Swiss law allows citizens to propose a referendum within a certain amount of time. For a referendum to be possible, 50,000 signatures of eligible voters are needed within 100 days of a law being published. As of January of this year, 66,000 signatures had been obtained. People from both conservative and liberal leanings have expressed dismay over the government’s interference with citizens’ internet access. Those dismayed with the method of regulation state that non-licensed gambling providers will find a way despite the blocking of domains. Those on the other side argue that a successful referendum would guarantee the loss of millions of francs every year.
With the amount of controversy surrounding Switzerland’s new Money Gaming Act, it’s unlikely that any portion of the regulations will be enforced before 2019. There are still many discussions and compromises that need to happen in the coming months for an agreement to be made between the government of Switzerland and its people. The Swiss Experiment is here to keep you up-to-date on all the latest news and trends of the Swiss gambling industry. Get in contact with us today.