Switzerland Votes Yes to Online Gambling and Internet Censorship

Swiss voters approved what appeared to be a controversial new gambling law by a wide measure earlier this month. On June 10th, the new Money Gaming Act was approved by 72.9% of voters in a referendum despite widespread opposition from a coalition of voters among various political parties.

The Money Gaming Act was passed by Swiss parliament last September in an effort to modernize and consolidate two older laws governing gambling, betting and lotteries. Two of the key changes in gambling law initiated by the act are to legalize online gambling and to block internet access to unlicensed gambling sites located abroad.

Online gambling in Switzerland will be made legal and strictly-regulated under the new gaming act. Once the law takes effect, operators will be able to apply for licenses to offer casino games online. The law restricts licenses to holders of land-based gambling licenses, but international operators may apply for a license if they partner with a local land-based casino.

In addition to holding a land-based license, would-be online casinos will also be required to prove the viability of the business. In other words, license applicants must prove they have the financial resources and technical know-how to run a safe and stable online casino.

Opposition Mounts Referendum Movement

Opposition to the Money Gaming Act was reportedly fierce among younger voters concerned that the IP-blocking measures included in the law open the door to internet censorship. Under the law, the Swiss Federal Gaming Board and Intercantonal Betting Board will maintain blacklists of foreign online casinos that local internet service providers will be required to block.

Opponents objected to the law on grounds that it establishes a dangerous precedent for internet censorship in Switzerland and could lead to further restrictions on free access to information. Opponents also noted internet blocking measures could be easily circumvented, rendering the dangerous new precedent unnecessary in the first place.

Additionally, opponents argued that the law would actually hurt gaming revenues as it would dissuade international operators from setting up shop in Switzerland and paying local taxes. That concern was magnified by one aspect of the law which raises the minimum taxable win amount on sports betting and lotteries from CHF 1,000 to CHF 1,000,000.

After the law passed parliament last year, a consortium of young political groups banded together in opposition to the law. The coalition was able to collect the required 50,000 signatures to force a referendum on the law. Had the referendum been successful, the law would have been blocked and lawmakers sent back to the drawing board.

Referendum Approves Swiss Gambling Law

Polls leading up to the referendum provided an early indication the law would be approved. According to one poll, 52% of respondents said they planned to vote in favor of the law.

Those in favor of the law assuaged concerns raised by opponents stating that other European countries have implemented internet blocking measures to protect their own gambling industries to no ill effect. Supporters also argued that even if circumvention is not perfect, similar efforts in other countries have been successful at moving gamblers away from unregulated foreign casino sites and onto state-approved platforms.

Supporters also noted that the new law is necessary to raise revenues for gambling addiction programs, social security and sports and culture programs. Justice Minister Simonetta Sommaruga noted at one point that Swiss citizens spend up to CHF 250,000,000 every year at foreign gambling sites that pay absolutely zero taxes in Switzerland.

In the end, even pollsters were surprised when nearly 73% of voters voted yes in overwhelming fashion. Voter turnout was low on referendum day with a turnout of just 34%.

What This Means for Swiss Gamblers

With the referendum done and over, the Swiss Money Gaming Act is set to take effect at some point in 2019. Local casino operators have already signaled their intent to acquire online gaming licenses despite the specter of sky-high tax rates for operators.

Gamblers will benefit from improved player protections as the Money Gaming Act calls for raising the level of responsibility among operators and cantons alike. New measures will be instituted to address gambling addiction, increase transparency and to protect against unfair gaming.

On the other hand, there are concerns Swiss gamblers will suffer reduced online gaming options and less generous offers in a highly-regulated, highly-taxed gambling environment. That’s not to mention what could come down the line now that the government has opened the door to internet censorship.