Switzerland is on the verge of legalizing online gambling in the country as the nation prepares for the national referendum on June 10.
The national referendum will decide whether the country will move forward with the recently passed revision of their existing gambling law titled ‘Money Gaming Act’. The Act which was passed by the Swiss Parliament in September 29, 2017, will lift the current online ban and allow local brick-and-mortar casinos to offer online gaming to Swiss nationals.
Three weeks ago, leading GfS Bern research institute found that the number of Swiss nationals who are in favor of the Money Gaming Act has increased from the previous 52 percent to 58 percent. According to GfS Bern co-director Lukas Golder, support for the legislation is stronger among Swiss residents of French- and Italian-speaking regions, women and the older generation.
Because of the statistics, the industry believes that the national referendum will end up in favor of the parliament’s decision, finally giving the green light for the government to implement the revised gambling act and start accepting applications for online gambling licenses.
Specifics Of The Money Gaming Act
Discussions about the Money Gaming Act became possible when 87 percent of all voters and cantons accepted a new wording for Article 106 of their constitution, which says that regulation and legalization of gambling will be put into the hands of the federal government. The act also stipulated that taxes collected from the casinos will flow to the old age pension fund and to the specific Swiss cantons. Proceeds of lotteries, on the other hand will go exclusively to community welfare projects such as sporting events, art and cultural festivals, and other social activities.
Backed by these regulations set by the constitution, the Swiss parliament first deliberated on the Money Gaming Act back in March 2017, where they went on to decide that online gaming should be permitted in the country—as long as it is only offered by operators of terrestrial Swiss casinos.
This means that only operators with terrestrial casinos could apply for an online gaming license while foreign operators will not be eligible to apply. To protect the Swiss people from succumbing to the polluted international gambling landscape, a blacklisting of all foreign gambling sites will be rolled out and Internet Access Providers will be required by law to block access to these foreign gambling sites.
According to Swiss Casinos Group CEO Marc Baumann, this foreign-blocking provision should not be a problem since he doesn’t think foreign operators will be interested in entering Switzerland. Baumann says that the federal government plans to roll out a tax rate that is one of the highest in Europe, making it uninteresting to foreign companies who can set up shop somewhere cheaper.
Currently, the rates are still in consultation but the federal council is suggesting to impose a tax rate of 20 percent for the first CHF3m (US$3m) of revenue, and then 40 percent on the next millions up to CHF10m, increasing incrementally as the revenue goes up, with a maximum rate of 80 percent.
Also included in the Money Gaming Act is a reduced tax rate and charges for “mountain casinos,” which are land-based casinos located in Davos or St. Moritz. This was considered to attract tourism to these areas.
Setting The Stage For a National Referendum
When the act was announced, opposition was quick to arise from the youth wings of the Free Democratic Party, Green Liberal Party, and the Swiss People’s Party. According to Swiss law, if the parties could come up with 50,000 signatures that show they are against the act by January 2018, the timeline of the act will be delayed and the parliament will be forced to hold a national referendum to decide whether they will go ahead with the new gambling act.
By January 18, representatives from the parties submitted the 50,000 signatures to parliament, which set the stage for a national referendum that will take place on June 10. With 58 percent of the Swiss electorate already in favor of the new gambling act, there is a huge possibility that the national referendum will turn out in favor of the Money Gaming Act.
If the electorate votes yes, the consultation on the online gambling tax rates will take place and a decision will be made on June 15. This will also mean that the parliament’s decision will remain unchanged and the act will come into force by 2019. If the odds are turned and the national referendum rejects the act, the implementation will have to be reviewed again and be forced back by 2 to 3 years.