Switzerland plans to regulate online gambling

A bill was introduced into Swiss parliament during the week which, if passed, would allow for licensed and locally regulated online casino games in that country for the  first time.

Under the proposed legislation, Switzerland’s 21 land based casinos would be able to offer games online. But not any time soon. Even if approved, the new law will only take effect from 2019. Way too late according to The Swiss Federation of Casinos who have seen their members’ profits fall 30% since 2007.

While the current law doesn’t allow for online casino games, it is reportedly one of the least actively enforced bans in Europe, and Swiss players have unfettered access to online gambling services offered by non-Swiss operators. It’s not surprising local casinos are coming off second best and want to get online as soon as possible.

Online licenses for local casino only

The proposed laws make no allowance for non-Swiss base operators to apply for licenses. Readers familiar with the EU’s single market (Four Freedoms) laws may wonder whether this will attract the scrutiny of the European Commission. I’m wondering this also.

The requirement of a local presence for iGaming licensing isn’t on the face of it welcomed by the EC. As put by European Commissioner for Internal Market, Industry, Entrepreneurship and SMEs Elżbieta Bieńkowska in response to a question as to why this is happening by EU Parliament member  David Casa:

“Without prejudice to a specific assessment of any particular notified draft law, the Commission has concerns about the compatibility of national provisions subjecting the provision of online gambling services to establishing a physical presence in the recipient Member State “

With regard to Switzerland, things are even more complicated. They are not part of the EU. Nor are they a member of the European Economic Area. They have however adopted various provisions of European Union law in order to participate in the Union’s single market.

Winnings will be tax free

There is good news for players though.

Under the new law all gambling winnings will be tax exempt. Currently casino winnings are exempt (as if players would declare cash won inside a casino anyway), but lottery and sports betting winnings are subject to tax.