Swiss Government Publishes Draft Gaming Act
By Dr. Simon Planzer, Planzer Law
Gaming operators have been eagerly awaiting news from Switzerland for quite a while. Now, the Swiss government finally published the first draft of a new Swiss gaming act. It contains significant changes to the current system, most notably the licensing of online games and the permission of poker tournaments outside of casinos. However, in the current version, only the land-based casino operators already established in Switzerland would be able to legally offer such games. The road to the final version of the gaming act is still long and no doubt will see the influence of various pressure groups.
Switzerland is highly regarded for its political stability. However, this system at times comes at a certain price, including the fact that Swiss legislative mills grind slowly. After several years of preparation, the Swiss government finally published on 30 April 2014 the first draft of a new gaming act. This article offers an overview of the most notable changes likely to be introduced by the on-going legislative reform. Finally, significant differences between Switzerland and the EU and EEA member states are noted.
System currently in place
With her 21 casinos, Switzerland features one of the highest densities of casinos per capita in the world. What is more, high income levels make the country’s residents a very interesting customer group for national and international operators. The gaming regulation currently in place consists of two main gaming acts, one regulating lotteries and betting (“Bundesgesetz betreffend die Lotterien und die gewerbsmässigen Wetten”), the other act addressing all other games of chance (“Bundesgesetz über Glücksspiele und Spielbanken”). Lottery and betting offers of a certain size can only be offered by the two exclusive licensees Swisslos (German and Italian speaking parts) and Lotérie Romande (French speaking parts). All other games of chance may only be operated within the premises of licensed casinos. Both sectors have their own supervisory bodies (“Comlot”; Federal Gaming Board).
The new gaming act: online games and poker
While the new gaming act will replace the two present acts, it is likely to keep in place key features of the current gaming regulation (e.g., separate supervisory bodies, use of certain percentage of gaming proceeds for ear-marked purposes). However, the new gaming act will also introduce significant changes.
Following a recommendation by the Federal Gaming Board, the Swiss government wishes to extend gaming offers to online channels. Only the final version of the gaming act will show which operators under which conditions will be able to legally offer online games. The first draft foresees that only casino operators already licensed in Switzerland can apply for the extension of their license to include online games as well. Swisslos and Lotérie Romande already practise a portfolio of online games.
The draft act also foresees the black listing and blocking of non-licensed operators. However, the draft does not foresee the suppression of payment services that relate to non-licensed operators. The government report further notes that blocking measures can be fairly easily circumvented and therefore full effectiveness of these measures should not be expected.
As in other countries, pokes games have become hugely popular in Switzerland too. Texas Hold’em in particular has taken a peculiar development in Switzerland. After the Federal Gaming Board held that Texas Hold’em tournaments did not constitute games of chance (but games of skill), poker clubs popped up throughout the country. These business operations came to an abrupt end by a contrary judgment from the Federal Supreme Court. Now, the draft act foresees that ‘money tournaments’ will be permissible under certain conditions outside casinos. Therefore, poker tournaments can again be organised. However, in the current version, the players would only play with small stakes and exclusively against each other with the tournament organiser not being involved in the game.
The special legal framework in Switzerland: neither EU nor EEA member
It should be noted that Switzerland is not an EU or EEA member state. However, through a complex and wide network of agreements, Switzerland has close economic ties with the 28 EU and 3 EEA member states, which for instance includes free movement of workers and self-employed persons. Having said that, the voluminous gaming case law of the Court of Justice of the EU and the EFTA Court are not directly applicable in the Swiss gaming market. Contrary to the developments in other European countries, a liberalisation of the national gaming market cannot be enforced through court proceedings before the Court of Justice of the EU or the EFTA Court. The battleground of the various interest groups is thus limited to the legislative procedure.
Outlook
The draft gaming act is until August 2014 in the stage of consultation. Subsequently, the federal government will bring a bill along with an explanatory report to the federal parliament. It is at that stage that interest groups who are thus far not yet happy with the direction of the draft gaming act will certainly make their influence known. The final provisions of the act may still see substantial changes. Several members of parliament have in past years intervened with parliamentary submissions. Moreover, even the preparatory commission considered several regulatory models for online games, including the licensing of foreign operators.
For further information, please contact planzer@planzer-law.com.
