73% of Swiss Voters Choose to Legalize iGambling, But Block Foreign Sites

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Tuesday, June 12th, 2018 | Written by Charles Washington

On Sunday, Switzerland held a national referendum to determine whether a future legalized online gambling industry should ban international online operators from offering their products within the country. Despite its relatively small turnout of just 34%, an overwhelming 73% majority of people subsequently voted in favor of the legislation, meaning offshore casinos will now be blocked from accessing the country’s $700 million gambling market.

The ban is expected to be implemented at the start of 2019, but in the meantime various interested parties have criticized the result of the referendum. Furthermore, some have suggested that voters may not have been entirely informed as to the details of the referendum, and may have thought that they were voting for legalized online gambling, perhaps unaware about the foreign operator restriction.

One such politician expressing his disappointment of the referendum is Luzian Franzini, co-president of The Greens’ youth wing, who said there existed a “generation gap” with lawmakers, and that the new law paved the way for further internet censorship in Switzerland.

“They may not really have understood what this could do to the internet,” explained Franzini.

Forced Referendum

In September 2017, the Swiss parliament passed the Money Gaming Act which combines the country’s existing casino and lotteries laws into a consolidated piece of legislation. Significantly, the single law also lifted the previous online gambling ban, whilst at the same time restricting their operation to just the country’s 21 land-based casinos. Whether international operators will be allowed to form partnerships with any of these local venues, however, remains unclear at this time.

It was the Money Gaming Act’s ban on foreign operators that initially created a major backlash amongst youth political groups, and after garnering the required 50,000 signatures, they succeeded in forcing a nationwide referendum on the issue.

More Funding for Social Programs

Following Sunday’s referendum and the Money Gaming Act being accepted in its present form, Justice Minister Simonetta Sommaruga praised the result, and highlighted the fact that “voters prefer to continue the current policy, only allowing gambling under restrictions.” Christian Democrat lawmaker Karl Volger also hailed the “pragmatic decision by Swiss voters who want to continue funding civil society projects with revenue of the casinos and lotteries.”

These politicians and others in favor of the new law had argued that restricting online gambling to Swiss operators was necessary in order to stop offshore casinos from drawing away more than $254 million per year in untaxed revenues. This lost money, they said, would not only undercut the ability to fund civil society, sports culture and the state pension, but also meant that less funds would ultimately be available to contribute towards anti-gambling programs.

Critics Unconvinced

Opponents of the ban, however, remain unconvinced and have pointed out that the move ultimately presents a “serious encroachment on the freedom of business and information.” They also argued that a blanket ban was “economically unreasonable,” and simply was an attempt by gambling companies to shut out unwanted international competition over the Internet.

Furthermore, critics have said that the government will actually receive less money from its legislation as individual gamblers will now pay taxes on winnings above one million francs, instead of the present 1,000 francs threshold, making less revenue available for government coffers. Instead, they have argued that the government could simply have provided greater incentives for international operators to agree to be taxed, with the Young Liberal Party website stating:

“A sensible solution is obvious: The foreign online offer should be integrated and the corresponding companies regulated and taxed. This will secure important revenues for the cantons, youth, sports and AHV / IV.”

Accusations Fly

In the meantime, interested parties on either side of the political divide have accused each other of being swayed by gambling interests.

Parliamentarian Marcel Dobler, for instance, told a Swiss news agency Tages Anzeiger that one of the country’s brick and mortar casinos offered him a seat on the board in what he viewed as a blatant attempt to win his support. On the other side, Switzerland’s land-based casinos have accused youth political groups of accepting financial incentives from international casino firms in order to garner their continued support.

Finally, opponents of the ban have pointed out that blocked IPs and domains can easily be evaded via virtual private network (VPN) and other services, prompting a retort from the Swiss government that at least 17 other EU countries are currently blocking websites from unlicensed gambling operators.