According to two recently published rulings of the Federal Supreme Court, blocking access by means of geo-blocking is not sufficient to be removed from the blacklist.
1. Legal situation
Pursuant to Art. 86 para. 1 and 2 of the Money Gaming Act (MGA), access to unli-censed online gambling in Switzerland shall be blocked if the gambling operators have their registered office or place of residence abroad or conceal it and if the web-site of the foreign gambling operator can be accessed from Switzerland. These blacklists are published by ESBK and GESPA.
Pursuant to Art. 87 para. 2 MGA, foreign gambling operators who appear on such a blacklist may challenge the blocking by written appeal within 30 days from publication. An appeal may be filed in particular if the foreign gambling operator has revoked its services in Switzerland or has prevented access to such services in Switzerland through appropriate technical measures.
Until now, the nature of the technical measures which have to be implemented by the foreign gambling operator was disputed. Swiss authorities were of the opinion that the foreign gambling operator had to exclude Swiss players from participating in the gambling completely (e.g. by deleting Switzerland from the country list and/or by not accepting the onboarding of players with Swiss residency). The wording of the MGA as well as the respective explanatory message of the Federal Council, however, supported the view that the implementation of technical means by the foreign gam-bling operator which restrict the access to the gambling site with a Swiss IP address (e.g. IP-blocking) was sufficient to meet the legal requirements (message on the MGA, BBl 2015 8476).
2. Recent decisions of the Federal Supreme Court
The starting point for the two decisions of the Federal Supreme Court were two con-tradictory decisions by two lower courts: The first decision by a court on this question was issued on 15 February 2021 (case no. 23-20) by the Federal Money Gambling Court (competent authority for GESPA). The Money Gambling Court determined that the mere IP-blocking is an "adequate technical measure" within the meaning of the law. The argument that Swiss players need to be blocked in addition to IP-blocking was rejected by the Money Gambling Court. This decision was not challenged at the Federal Supreme Court.
However, the Federal Administrative Court (competent authority for ESBK) came in two other decisions of 30 November 2021 (B-439/2020 and B-520/2020) to another conclusion and stated that in its view the IP-blocking is not sufficient to comply with the legal requirements of the MGA. Rather, the foreign gambling operator needs to actively ensure that no Swiss player can register on the gambling website in order to be removed from the blacklist. The Federal Administrative Court decided in contra-diction to the message on the MGA that IP-blocking cannot constitute an "appropri-ate technical measure" to prevent access from Switzerland since IP-blocking can be circumvented through a VPN connection. These two decisions were challenged at the Federal Supreme Court.
In the two decisions of the Federal Supreme Court of 30 January 2023 (2C_87/2022 and 2C_90/2022) the view of the Federal Administrative Court has been confirmed. The Federal Supreme Court decided that the foreign gambling operator needs to ac-tively ensure that no Swiss player can register on the website in order to be removed from the blacklist. Thus, the mere IP-blocking is not an "appropriate technical meas-ure" in order to be removed from the blacklist since the goals of the MGA may only achieved if the access to unauthorised foreign gambling services is effectively and efficiently prevented.
Against this background, unlicensed foreign gambling operators in Switzerland must now provide a system by which players residing in Switzerland are effectively exclud-ed from their websites in order to be removed from the blacklist (e.g. by actively checking the player's place of residence through appropriate proof). The mere IP-blocking is no longer sufficient, in contradiction to the message on the MGA.
3. Authors' notes:
Pursuant to Art. 86 para. 1 and 2 MGA, access to unlicensed online gambling in Switzerland shall be blocked. At the same time, Art. 87 para. 2 MGA states that the blocking can be challenged in particular if the gambling operator has revoked its services in Switzerland or has prevented access to such services in Switzerland through appropriate technical measures. The wording of the BGS is thus aimed at the territory of Switzerland and wants to prevent persons who are on the territory of Switzerland from accessing gambling services that are not licensed in Switzerland. The message on the MGA confirms this understanding of the law by explicitly listing the "blocking of access to content from Switzerland by IP-blocking" as a sufficient meas-ure to fulfil the legal requirements (message on the BGS, BBl 2015 8476). The Federal Supreme Court has deviated from this wording and has extended the scope of the BGS by referring to its protective purpose.
Depending on the readers political mindset, one may agree with the view of the Federal Supreme Court: Restricting the exclusion of foreign gambling operators from the Swiss market is easier, if blacklisting operators is already possible if players resident in Switzerland are able to register on a foreign operators site. However, the legislator has envisaged a different regime. This indeed raises the question why the Federal Supreme Court considers itself to be responsible for factually amending a piece of legislation by means of interpretation of a newly enacted law. Moreover, the decision of the Federal Supreme Court ultimately leads to the fact that players residing in Switzerland are generally blocked, regardless of whether they are in Switzerland or abroad at the time of accessing gambling services from a foreign gambling operator. Such a – de facto extraterritorial – effect of the MGA was not envisaged by the historical legislator.