The regulation of the Swiss online gambling market has been discussed as an important topic by local lawmakers for several years now. The Swiss Parliament has recently made progress in the creation of a new set of regulations, although its efforts may not be very welcomed by many.
Early in March, lawmakers participated in a series of discussions during which the details of a new Money Gaming Act were set. In brief, when and if adopted, the act will replace the regulatory fuzziness when it comes to the provision of online gambling within the country’s borders with a certain amount of clarity.
Here it is important to note that iGaming is not exactly illegal in Switzerland at the moment. Local players are able to access foreign gambling websites but at their own risk of gambling in an unregulated environment.
The Money Gaming Act will change the existing status quo drastically. Under the draft legislation, those foreign gambling websites will be blocked from the country. With that said, online gambling licenses will be available only to the operators of local brick-and-mortar casinos. There are 21 such venues to be operating around Switzerland. In other words, there will not be licenses for online gambling operations only.
Swiss lawmakers have been firm in their stance to deny foreign online gambling operators access to the local market. IP-blocking has been proposed as the measure against foreign operations. Said measure was welcomed by the local casinos, but was highly contested by non-Swiss operators and even by the country’s Internet access providers. The latter argued that IP-blocking would incur huge costs that they were not willing to cover.
Despite the controversy around the blocking measure, it remained part of the proposed legislation. However, IP-blocking has not proved to be very effective in other regulated jurisdictions because it is practically very easy to circumvent the block.
Taxation is another important matter included in the Money Gaming Act. Following a proposal from the Federal Council, the government has decided that all money games without exception will be exempt from tax.
The proposed legislation will now be discussed in the Council of States. If approved there, it will be ready for publication in the Swiss Federal Gazette. However, it is believed that the Money Gaming Act will not come into effect before 2019 or even 2020. The highly contested IP-blocking may turn into a big stumbling block that would delay the law’s implementation.
If foreign operators are blocked, this would leave local players with very few options for playing online. And judging from previous instances of lawmakers limiting access to gambling websites to few select, this usually forces players to opt for unregulated operations.
It all shows that the Money Gaming Act has been crafted with the intention to revive local land-based casinos which have had very hard time these past years. According to a report by the Swiss Casino Federation (Schweizer Casino Verband), the country’s 21 casinos generated CHF681 million in 2015, down 4.1% from a year earlier. The reviewed year was the eighth consecutive one of revenue decrease.
Land-based casinos will have to prove their viability in order to be granted an online gambling license. However, given their current state, it is very curious how many of them will be able to support iGaming operations.
