Switzerland Moves to Block Illegal Gambling Market

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Tuesday, March 21st, 2017 | Written by Stephen Smith

Many European nations have instituted regulatory frameworks to control online gambling within their borders, with these laws designed to protect consumers from unscrupulous sites, prevent money laundering and provide tax revenue to federal and local governments. Once legislation is signed into law, though, countries are then left with the puzzle of how to enforce them. Furthermore, sites that do not receive official state-issued licenses don’t simply vanish, so what can be done to prevent their use?

Net Blocking

At the beginning of this month, Switzerland adopted legislation to regulate online gambling in the country, while restricting the market to just a small number of Swiss-based operators. As a result, lawmakers are currently debating how to prevent unlicensed operators from offering their products in Switzerland, with a large portion of the Swiss Parliament believing that the best option is net blocking.

With this solution, Internet Service Providers will be required to restrict access to all illegally operating online poker sites, and if the legislation passes, players who attempt to navigate to such sites will be greeted with a screen that lets them know they are accessing an illegal gambling site. Licensed Swiss gambling operators fully support the bill and have lobbied hard to see it passed and signed into law.

Opposition to Internet Blocking

While many Swiss legislators are in favor of the proposed net blocking proposal, there is still outspoken opposition to it on both sides of the political spectrum. The Green Liberal Party and the right-leaning Swiss People’s Party have joined forces to kill the bill, and collectively have a number of objections to the proposal, including:

– An infringement of free speech. There are concerns that banning certain websites amounts to censorship, which is an issue tht has been hotly contested in other European nations that have also blocked access to illegal websites. A Czech court, however, found that their government’s net blocking law did not infringe on rights, as illegal websites are not protected by that country’s laws. There is a chance that Swiss courts would rule the same.

– A slippery slope. Opponents to the net blocking legislation argue that blocking illegal gambling sites could lead to restricted access to other sites in the future. They claim that it would set a precedent and give the government the chance to block sites like pornography or blogs critical of the current controlling party. Proponents of the bill state that the purpose of the legislation is not to restrict Internet access, and lawmakers have gone on the record as saying that no one has the intention of using net blocking to control information dissemination the way that North Korean and China do.

Nevertheless, Bernie Hoeneisen from the Internet Society still believes that moving in this direction would be a slippery slope, and elaborating further stated: “If you block unlicensed online gambling providers, hoteliers could ask why not block AirBNB and taxi operators might think, Uber could be blocked as well.”

– A protectionist action. Perhaps the most compelling argument against net blocking sites is that it is a protectionist action, meant to benefit Swiss companies at the expense of foreign operators. European Union law does require governments to promote free trade, and prohibits laws that create state-run monopolies, or restrict business only to companies located within one nation’s borders. If opponents can prove that only Swiss-based companies have been given licensure, there is a chance that an EU court would strike down the law.

– An easy work around. Lastly, opponents to the law state that it simply won’t be effective, pointing out that both players and operators can take evasive steps to avoid being blocked or to work around blocks. As Bernie Hoeneisen explains:

“When as a result everybody uses Google’s DNS servers instead of those from their Swiss provider to avoid the blocking, the security measures taken by Swiss providers come to nothing.”

No Taxes on Winnings

In related news, Switzerland’s lower house, the National Council, has put itself in opposition to the Council of States by voting down a proposal to tax sports betting and lottery winnings this week.