Swiss Supreme Court upholds ban on offshore gaming sites

Switzerland's online casinos must be tied to land-based casinos.
Switzerland's online casinos must be tied to land-based casinos.

The decision kills three operators’ hopes of entering the Swiss online gambling market.

Switzerland.- The Federal Supreme Court of Switzerland has decided to uphold a ban on access to offshore gambling sites. It ruled that the current use of network blocks to restrict access to sites that are not approved by the national regulators was proportionate. 

Switzerland has been using the “domain name system” since 2019 in order to prevent players from being able to access gambling sites other than those casino and lottery sites approved by the two national regulators. Approved casino gaming sites are all tied to Swiss land-based casinos

The country’s regulators had argued that using the blocks ensured that players only use sites that pay tax in Switzerland and protect players against gambling harm.

The ruling was made following appeals from three international gaming operators who had hoped to enter the Swiss market. The ruling on the court’s website does not name the operators, but Germany’s AG has said that it was one of the operators that had appealed.

The Federal Administrative Court last year ruled against four cases filed against the ban by Malta-based Interwetten International Ltd, Videoslots Ltd, bet-at-home Entertainment Ltd, and Lopoca Gaming Ltd.

New Swiss casino licensing regions

Earlier in the year, the Federal Council of Switzerland approved the creation of two new casino licensing regions in the country. The move will allow two new casino licences to be granted, adding to the existing 21 licensees. A tender process will begin next month, with the winning licensees to be announced in autumn.

Switzerland allows one casino licence for each licensing region. Currently, there are 21 regions, but the Federal Gaming Board (ESBK) recommended the system be updated to add Lausanne and Winterthur as two new regions. The existing 21 casino licences will not be affected.

In May, the economics think tank Avenir Suisse suggested that Switzerland should change its approach of linking online casino licences to land-based casinos, proposing the country create online-only licences.

The think tank said that the gambling sector in Switzerland is politicised and inefficient, with politicians choosing to direct the proceeds of gambling revenue. It argued that this has created a “veritable cash distribution industry” around Switzerland’s two lotteries – Swisslos and Loterie Romandie.

Its report states: “The distribution of gambling money is not optimal. The cantonal lottery funds regularly finance projects that interpret the notion of public utility enshrined in the Constitution very broadly.”

It also noted that tax revenue from some casinos goes to different cantons, not those where the land-based casinos are located. Moreover, some cantons were effectively regulators and operators because of their stakes in casinos, the report argues. It also proposed that the two national gaming regulators, Eidgenössische Spielbankenkommission (ESBK) for the German-speaking cantons and Gespa for the French, should be merged.

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