On 1 March 2017, the Swiss Parliament deliberated on the new draft of a revised gambling law. In the discussion, two issues were of particular significance and have been hotly disputed: Who will qualify to apply for an online licence? How will foreign operators be detained from the Swiss market?
New: Blocking of foreign operators
As already proposed by the Federal Council, the Parliament decided to block the access to foreign online gaming providers on a technical level if their services have not been licensed in Switzerland. The technical measure being discussed is the implementation of IP-Blocking by Internet Access Providers.
This issue was hotly disputed given that the proposed technical blocking measure strongly interferes with personal rights and restricts the individual to freely access the internet. Nonetheless, the majority of the Parliament eventually followed the argument that such measures are required to protect Swiss players from unregulated foreign offers. This despite the fact that experts agree that technical measures may easily be circumvented and will not be an efficient measure to protect Swiss players.
If the new law enters into force (see below "What is next?"), the Federal Council will need to decide on the details of the implementation of the blocking measures. It is thus too early to discuss details on how IP Blocking will be enforced eventually. However, we currently have the following expectations:
- Timing: The new regulations are unlikely to enter into force prior to 2020.
- Blacklisting: Once enforced, the supervising authorities will maintain a blacklist for relevant operators. Internet Access Providers will have the obligation to block access of Swiss users to the blacklisted websites.
- User may continue to access foreign sites: However, the new regime does not aim to prohibit the use of foreign gambling services in Switzerland. Swiss user may therefore without risk circumvent the blocking measures to continue to use the services of foreign gambling providers.
- Global competition for Swiss providers: Consequently, new Swiss operators will still have to compete with global players for the Swiss market, but without having the possibility to provide services to players outside of Switzerland.
New: Online concessions only for Swiss casinos
The Parliament adopts the proposal of the Swiss Federal Council which states that only operators of physical casinos located in Switzerland may offer online gambling services. Foreign operators as well as holders of a licence for a terrestrial casino will not be allowed to offer any online gambling services in Switzerland. Also, it shall not be possible to acquire a pure online concession. In a nutshell:
- Who will be able to apply for an online gambling concession: Only holders of a licence for a land based casino will qualify to apply for an online gambling concession. Moreover, in order to be able to extend an existing terrestrial concession to online gambling services, the applicant will have to establish the commercial viability of the planned service.
- Will suppliers to operators need licensure? No. For the time being, the draft Money Gaming Act does not introduce a licence requirement for suppliers. However, suppliers will need to provide their services to licensed operators. In order for the Swiss authorities to approve such collaboration, the Swiss operator will need to provide evidence that its foreign supplier has “a good reputation”. It is yet unclear what test the Swiss authorities will apply with regard to these criteria and to what ex-tent past business activities will be taken into consideration in this assessment.
What is next?
After the debate on 1 March 2017 lasted seven hours, the Parliament did not finish discussing the new law. The debate on the gaming revision is expected to continue on 15 March 2017.
As soon as the Parliament reaches a final agreement on all aspects of the new Money Gaming Act, it will be published in the Swiss Federal Gazette. Swiss Law provides citizens with the opportunity to launch a public referendum if they oppose the law. For the referendum to go ahead, only 50'000 eligible voters must provide their signature within 100 days after the law has been published in the Federal Gazette. If the criteria are met, the electorate can vote on the disputed law. For the law to be put into force definetly a (simple) majority of all the votes cast is needed.
Considering the strong oppsition the law faced in the parliamentary debate, we consider that a referendum is a likely scenario. This would further delay the implementation of the new act by approx. 2-3 years.