Swiss E-gaming Is One To Watch
By Jana Sedlakova
Switzerland could be one of the next countries in the European Economic Area (‘EEA’) to allow online gambling as the wave of regulation continues. Gambling was banned in Switzerland between 1921 and 1993. Online gambling has now become a central point of discussions in relation to opening the Swiss market. The laws of 1993 and 2000 split gambling into games of chance and skill and only games of chance are permitted. After passing the 1998 law, online gambling in Switzerland had been prohibited but the ban is difficult to enforce. Only lotteries can be provided via the internet and they are licensed at the Canton (regional) level. Swisslos and the Loterie Romande are the two authorised lottery providers.
Existing legislation governs lotteries, betting and gaming businesses, primarily within the provisions of the Confederation (art. 106, al. 1, Constitution). Two bills were enacted in that remit. Firstly the 1923 Act on Lotteries and Professional Betting and secondly the Act on games of chance and gambling establishments as amended in 1998. Source Droit & Technologies. The Federal Act on Lotteries and Professional Betting of 1923 made nationwide lotteries illegal.
Article 106 of the Federal Constitution of Switzerland has split gambling into two parts, first being games of chance including casino games governed by the Federal Act on Games of Chance and Casinos 1998 and the second being lotteries and betting governed by the above mentioned Federal Act on Lotteries and Professional Betting.
Initially only restricted casino game stakes were allowed and this was lifted in 2000.
As the illegality of online gambling has not been enforced in Switzerland the laws have acted poorly as a deterrent. After a period of comprehensive research the Swiss government has decided to follow the global trend of online gambling governance and to regulate. A report from the Swiss Federal Gaming Board in 2009 formed the basis for the movement towards the regulation of online gambling.
The Swiss Federal Council has stated that the downsides associated with problem gambling, including addiction are addressable.
Gambling, as defined by the Federal Act on Games of Chance and Casinos 1998, would be subject to a tax rate of ‘no more’ than the tax rate on lotteries or betting wins. It has been accepted by the Switzerland’s Federal Council that illegal gambling providers on the internet are generating revenues that should generate income for Switzerland.
At present, gambling via casino games under the Federal Act on Games of Chance and Casinos 1998 is exempt from tax.
The new legislation, before being presented to Parliament for passing, is subject to a consultation which is due to take place in mid-2013.
According to Zurich-based consulting group, Richterich & Partner, Switzerland has established the Online Gambling Association Switzerland (‘OGAS’) to manage and coordinate likely online gaming ahead of the forthcoming regulation. OGAS intends to liaise with Swiss public authorities to create the aforementioned legal system designed for online gambling. It would also act as an advisory establishment helping to access the market. Furthermore it would also have an informative function to provide up to date information about the market.
The exact approach to be adopted by the Swiss authorities remains to be seen.