Swisslos Sportsbook

GeoComply’s geolocation technology will be integrated into the OpenBet platform, SG Digital’s innovative and best-of-breed sports betting solution. GeoComply will verify a player’s wager is placed from a location authorized for legal sports betting, to ensure compliance with federal and state regulations.

Sci Games Announces Sports-Betting Contracts, Vendor

Scientific Games has announced two contracts for sports-betting solutions to the national lotteries in Hungary and Switzerland, and an agreement with GeoComply for sports-betting geolocation technology.

Scientific Games Corporation announced contracts for sports betting solutions at two separate European lotteries, utilizing the company’s patented AEGIS technology, and separately announced a new vendor to supply geolocation technology for its sports-betting platform.

First, the company announced the rollout of technology to service the Hungarian National Lottery, Szerencsejáték Zrt. Days later came the announcement that its sports betting platform also will be utilized by Swissloss, the lottery covering the German- and Italian-speaking regions of Switzerland.

With the implementation of the new internet sports betting platform in Hungary, Scientific Games is now Szerencsejáték Zrt.’s sole provider of gaming systems technology, and is responsible for the development, installation and maintenance of the systems. The omni-channel platform allows Szerencsejáték Zrt. to deliver sports betting via mobile and internet, as well as through their distribution channel of nearly 5,000 retail lottery terminals.

“Since migrating our online sports betting platform to a Scientific Games solution, we now have one company providing advanced gaming technology that supports our entire gaming portfolio,” said David Csillag, CIO for Szerencsejáték Zrt. “The new technology accelerates the implementation of our IT strategy, drives efficient operations and lower maintenance costs, and creates a seamless gaming experience for our players.”

Scientific Games, initially through a legacy company, has provided sports betting, gaming system technology, lottery retailer terminals and instant games solutions to Szerencsejáték Zrt. since 1997. In 2015, Scientific Games launched its AEGIS open-software system in Hungary.

“We are now supporting Szerencsejáték Zrt. in a multi-channel gaming environment,” said Pat McHugh, senior vice president, global lottery systems for Scientific Games. “Our ability to seamlessly integrate end-to-end solutions for all products in their portfolio is core to our strategy of providing significant value to our lottery customers. Since migrating to Scientific Games’ latest platforms, Szerencsejáték has successfully executed on their business plan, and has become one of the fastest-growing lotteries in Europe, achieving double-digit growth year-over-year. Our advanced technology helps Szerencsejáték Zrt. implement its new strategy and become a very innovative gaming company.”

The Swisslos solution was provided by Scientific Games after winning a new contract to implement the new sports betting system with expanded wagering capabilities for the lottery’s sports product. The company has provided a fixed-odds sports betting system to Swisslos for about 15 years.

“We have been working on the attractiveness of our main sports product for quite some time, and are delighted to successfully complete the project with the launch of a new sports betting platform from our trusted technology provider, Scientific Games,” said Dr. Roger Fasnacht, director of Swisslos.

Swisslos has offered sports bets, lottery numbers games and instant games to players in Switzerland since 1937, and to players in the principality of Liechtenstein on a contractual basis since 1968. Swisslos transfers its entire net profit to the member states of the Swiss Confederation.

Scientific Games has provided gaming systems technology, retailer terminals and instant games to Swisslos for more than two decades. Recently, the company was awarded a new contract to replace Swisslos’ current gaming system with its AEGIS technology in 2018-19.

“The launch of a new sports betting platform for Swisslos completes two back-to-back successful sports technology implementations for Scientific Games in Europe,” said McHugh. “We believe that Swisslos players will appreciate a highly secure, integrated retail and online sports betting experience, and the lottery will benefit tremendously from the expanded capabilities of our multi-channel system. This is consistent with Scientific Games’ focus on providing market-leading sports betting solutions to responsibly increase profits for our lottery customers.”

Meanwhile, Scientific Games announced that it has signed an agreement with Canada-based GeoComply to provide its market-leading geolocation compliance services to the company in anticipation of regulated sport betting being legalized in the United States.

GeoComply’s geolocation technology will be integrated into the OpenBet platform, SG Digital’s innovative and best-of-breed sports betting solution. GeoComply will verify a player’s wager is placed from a location authorized for legal sports betting, to ensure compliance with federal and state regulations.

“Scientific Games has been a longtime partner of GeoComply since the onset of U.S.-regulated iGaming, having first gone live with our geolocation technology in New Jersey in 2013,” said GeoComply USA CEO Anna Sainsbury. “As a market innovator, they have taken the initiative to anticipate the U.S. sports betting market’s regulatory needs by integrating our geofencing capabilities into their products. This move ideally positions Scientific Games as the industry awaits the Supreme Court decision on the Professional and Amateur Sports Protection Act (PASPA).”

Quinton Singleton, vice president of corporate strategy and government affairs for SG Digital, said, “Having recently announced that our sports betting solution is already under review by the New Jersey Division of Gaming Enforcement, Scientific Games sees itself at the forefront of the industry to mobilize and offer live online sports wagering as soon as the law permits. GeoComply’s technology is key for preparing and licensing our solution in such a highly anticipated time in our industry.”

Winnings from terrestrial casinos are tax-exempt. This also applies to winnings from online casino games and lotteries, sports betting or large games of skill up to CHF 1 Mio., if the games are licensed in Switzerland.

Insurance & Reinsurance

Mergers & Acquisitions

Digital Health

Chapter Content Free Access

1. 1. Relevant Authorities and Legislation
2. 2. Application for a Licence and Licence Restrictions
3. 3. Online/Mobile/Digital/Electronic Media
4. 4. Enforcement and Liability
5. 5. Anticipated Reforms

1. Relevant Authorities and Legislation

1.1 Which entities regulate what type of gambling and social/skill gaming activity in your jurisdiction?

Relevant Product

Who regulates it in digital form?

Who regulates it in land-based form?

Gaming

Casino gaming (including slots and casino table games such as roulette & blackjack)

The Swiss Federal Gaming Board (“SFGB”), based on the Money Gaming Act (“MGA”).

Small poker tournaments (neither automated nor intercantonal): the cantonal authorities.

Swiss Gambling Supervisory Authority (“Gespa”).

Automated and/or intercantonal: Gespa.

Small games (neither automated nor intercantonal): the cantonal authorities.

Betting

Automated and/or intercantonal: Gespa.

Small games (neither automated nor intercantonal): the cantonal authorities.

Sports/horse race betting (if regulated separately to other forms of betting)

Automated and/or intercantonal: Gespa.

Small games (neither automated nor intercantonal): the cantonal authorities.

Fantasy betting (payment to back a ‘league’ or ‘portfolio’ selection over a period of time, for example in relation to sport or shares)

Switzerland does not have a special regulatory regime for fantasy betting, e-gaming and social gaming. It must be decided on a case-by-case basis if a bet/game qualifies as a casino, a large-scale or a small-scale game under the gaming regulations. Dependent on that decision, SFGB, Gespa or the cantonal authority is the competent regulatory body.

Lotteries

Automated and/or intercantonal: Gespa.

Small games: cantonal authorities.

Social/Skill arrangements

“Social” gaming with no prize in money or money’s worth

Social games with no prize in money/money’s worth are not considered gaming in the sense of the Swiss gaming regulations.

Skill games and competitions with no element of chance

Skill games that are not automated, intercantonal or online are not subject to the MGA.

1.2 Specify: (i) the law and regulation that applies to the Relevant Products in your jurisdiction; and (ii) – in broad terms – whether it permits or prohibits the offer of Relevant Products to persons located in your jurisdiction.

Since 1 January 2019, casino games, lotteries, sports betting and skill games have been regulated by the MGA and the Ordinance on Money Games (“MGO”). These laws generally regulate money games in which there is the chance to win a prize or other monetary advantage in return for a stake/monetary transaction to enter the game. The MGA distinguishes between casino games, lotteries, sports betting and skill games. Lotteries, sports betting and skill games can be categorised into large-scale (executed automatically, intercantonal or online) and small-scale games (neither automated, intercantonal nor online) (Art. 2 MGA).

Licensed land-based casinos can apply for an extension of their licence to offer online gaming. Licences for (online) betting and lotteries will only be given to Swisslos and Loterie Romande. Foreign providers cannot apply for a licence and their websites are blocked (DNS-blocking) by the Swiss authorities if the provider does not block the access to the games from Switzerland itself.

2. Application for a Licence and Licence Restrictions

2.1 What regulatory licences, permits, authorisations or other official approvals (collectively, “Licences”) are required for the lawful offer of the Relevant Products to persons located in your jurisdiction?

Swiss law distinguishes between terrestrial casino licences and the extension of the terrestrial licences for online gaming, lottery and betting licences and licences for small games (not executed automatically, online or intercantonal).

2.2 Where Licences are available, please outline the structure of the relevant licensing regime.

Casino licence

A-type casino: no limits in stakes and the number of offered games and slot machines, connected jackpots and maximum winnings possible. Only casinos with a licence “A” qualify as Grand Casino (Art. 6 MGA).

B-type casino: usually for spa or resort casinos, with a limited number of table games (three) and slot machines, limited stakes, jackpots may not be connected. The limit per stake for automated games in B-type casinos is CHF 25/game.

The number of licences is determined by the Swiss Federal Council (“SFC”), whereby the locations are distributed evenly among interested regions (Art. 7 MGA). A licence is usually granted for a period of 20 years and can be renewed (Art. 12 MGA). The licence can be extended for the offering of online games (Art. 9 MGA).

The concession is not transferable (Art. 14 MGA).

Large-scale games (lotteries, sports betting and skill games which are executed automatically, intercantonal or online)

In order to be able to offer large-scale matches, an organiser’s licence and a gaming licence are required. These are issued by Gespa, with the cantons deciding on the maximum number of lottery and sports betting operators (Art. 23 MGA). Only Swisslos and Loterie Romande receive licences for large-scale games. The licence is not transferable to third parties (Art. 30 MGA).

Small game licence (lotteries, sports betting and skill games which are executed neither automatically, online nor intercantonally)

Small-scale games operators can apply for a cantonal licence with the competent cantonal authority. There are separate regulations concerning small lotteries and sports betting in the cantons.

2.3 What is the process of applying for a Licence for a Relevant Product?

The SFC decides on the maximum number of the terrestrial casino licences that may be granted, and also defines the geographical locations of such casinos.

The written application for the casino licence must be submitted to SFGB. SFGB reviews the application and submits a proposal to the SFC. The SFC decides whether or not to grant a licence. Casinos holding a Swiss casino licence can apply for an extension of their licence to offer online games. The process of the application is the same as for a terrestrial casino licence.

Applicants of large-scale games must submit their application to Gespa (only Swisslos and Loterie Romande can receive a licence) and operators of small games must submit theirs to the cantonal authority.

2.4 Are any restrictions placed upon licensees in your jurisdiction?

Licensees may only provide casino games and large-scale/small games services within the scope of (i) the licence obtained, and (ii) the applicable regulations. Licences contain a wide range of restrictions with regard to the games that may be offered, how these games must be organised, what form and in which amounts payments may be accepted and how the marketing, social concept and security as well as AML procedures are organised. If the licensee fails to comply with the regulations, SFGB, Gespa or the cantonal authority may cancel or impose restrictions on the licensee.

2.5 Please give a summary of the following features of any Licences: (i) duration; (ii) vulnerability to review, suspension or revocation.

A casino licence is usually granted for a period of 20 years (Art. 12 MGA). After the 20-year period has elapsed, the licence can be extended or renewed. In certain circumstances, the licence may be revoked, restricted or suspended. A revocation of the licence is possible if any of the following apply (Art. 15 MGA):

• The requirements for issuing the licence are no longer fulfilled.
• The licensee has obtained the licence based on incomplete or false information.
• The licensee has not started operations within the set time limit by SFGB.
• The licensee leaves the business inoperative.
• The licence is used for any unlawful or improper purposes.

The licence for large-scale or small games is not subject to a fixed term but can be limited in time and be renewed. In addition, the licences can be subject to conditions and obligations (Art. 29 MGA). If the legal requirements for the licence are no longer given, Gespa (or in cases of small games, the cantonal authority) can withdraw the licence. The licence may also be suspended, restricted or subject to additional conditions and obligations (Art. 31 MGA).

2.6 By Relevant Product, what are the key limits on providing services to customers? Please include in this answer any material promotion and advertising restrictions.

Casino games: the limits on the types of games, stakes and the maximum number of slot machines depend on the type of the licence (A licence or B licence, see question 2.2 above).

Large-scale lotteries: may only be offered by Swisslos or Loterie Romande.

Small lotteries (cantonal licence): the maximum stake for a single bet is CHF 10, with a maximum of CHF 100,000 for total stakes (Art. 37 MGO, total stakes of CHF 500,000 if the goal of the lottery is to finance an event of supra-regional importance). The value of the prizes must be at least 50% of the maximum total stakes.

Small local sports bets (cantonal licence): maximum stake of CHF 200 per bet, with a maximum of CHF 200,000 for total stakes on one competition day (Art. 38 MGO).

Small poker tournament (cantonal licence): maximum entry fee of CHF 200 and CHF 20,000 total entry fees. There are additional restrictions regarding the number of tournaments, number of participants, duration of tournaments, etc. (Art. 39 MGO).

Tombola: maximum total stake of CHF 50,000 (Art. 40 MGO).

Any advertisement for the commercial offering of games of chance is prohibited if made in an obtrusive way (Art. 74 MGA). Advertising may also not be addressed to minors or persons subject to a ban. Advertising for money games not licensed in Switzerland is prohibited.

Any prohibited promotion can be sanctioned with a fine up to CHF 500,000 (Art. 131 MGA).

2.7 What are the tax and other compulsory levies?

Casinos

In accordance with the Swiss Constitution, a casino’s gross revenues are taxed. The collected tax funds flow into Switzerland’s pension system.

Terrestrial casinos: the basic tax rate is 40% (up to CHF 10 Mio. gross gaming revenue). The federal government can change the current level of taxation rates up to 80% (Art. 120 MGA).

Online gaming: the basic tax rate is 20% (up to CHF 3 Mio. gross gaming revenue) and can be increased up to 80% (Art. 120 MGA).

Players

Winnings from terrestrial casinos are tax-exempt. This also applies to winnings from online casino games and lotteries, sports betting or large games of skill up to CHF 1 Mio., if the games are licensed in Switzerland.

Winnings from small games (not executed automatically, intercantonal or online) are tax-free if they are licensed by the competent cantonal authorities. Winnings from lotteries or games of skill for sales promotions are tax-free up to CHF 1,000. Winnings from foreign casinos, resp. non-licensed games, are fully taxed.

2.8 What are the broad social responsibility requirements?

One of the main objections to the deregulation of the casino market is the assumption that deregulation would result in an increase in gambling addiction. Therefore, applicants must present a social concept, including measures to prevent gambling addiction and strict security policies (Art. 76 MGA).

The social concept of casinos and providers of online games of luck must include the following measures:

• information for players about the risks of games, possibilities for self-control, bans, etc.;
• early identification of at-risk players;
• implementation of bans;
• education of personnel; and
• data collection on the effectiveness of the measures.

2.9 How do any AML, financial services regulations or payment restrictions restrict or impact on entities supplying gambling? Does your jurisdiction permit virtual currencies to be used for gambling and are they separately regulated?

Casinos are subject to the Federal Act on Combating Money Laundering and Terrorist Financing in the Financial Sectors (“AMLA”) and are considered financial intermediaries. SFGB has issued an ordonnance to clarify the application of the AMLA for casinos. In addition, the majority of the licensed casinos are members of the Self-Regulating Organisation, which sets the AML standards for its members.

Financial intermediaries under the AMLA must comply with different duties of due diligence. For example, casinos must verify the identity of the customer on the basis of an identification document in one of the following situations:

• When they enter a casino.
• When they reach a certain threshold.
• When they establish a certain business relationship (accounts or deposits).

In addition, casinos must report any suspicion of money laundering immediately and respect the criminal provisions of the AMLA. A violation of provisions of the AMLA may lead to a revocation of the casino licence. Lottery companies are not yet considered financial intermediaries. The Federal Justice and Police Department has issued an ordonnance to specify AML requirements for providers of large games (intercantonal, automated or online lotteries, sports bets and games of skill).

Virtual currencies: neither the MGA nor the MGO have imposed any restrictions on virtual currencies.

2.10 What (if any) restrictions were placed during the COVID-19 pandemic? Are they still in force?

At present, access to casinos is only granted to persons who have recovered, been vaccinated or tested. This applies to all persons over 16 years of age. Only the official Swiss COVID-19 certificate is valid as proof.

Certificates issued by a Member State of the EU or EFTA in accordance with Regulation (EU) 2021/95320 and the EU legal acts issued on the basis thereof are also accepted.

Masks are not compulsory in the playing hall of casinos, but are still compulsory in the building, corridors and toilets.

3. Online/Mobile/Digital/Electronic Media

3.1 How does local law/regulation affect the provision of the Relevant Products in online/mobile/digital/electronic form, both from: (i) operators located inside your jurisdiction; and (ii) operators located outside your jurisdiction?

There is no clear definition of online gambling. However, the chain of distribution to the customer is significant in determining whether a game is classified as remote gaming or online gaming. Since 1 January 2019, existing casinos with a Swiss licence can apply for an online licence.

Offering non-licensed online games within Switzerland is prohibited. Foreign, non-licensed operators who offer online cash games of luck to Swiss players may be foreclosed from the Swiss market through the introduction of DNS-blocking measures to be implemented by the Internet access providers (Art. 86 MGA).

However, foreign providers will be able to cooperate with Swiss casinos in order to offer their online services legally in Switzerland. The cooperation will, amongst other requirements, only be approved if the cooperation partner has a “good reputation”.

3.2 What other restrictions have an impact on Relevant Products supplied via online/mobile/digital/electronic means?

To access online games, a gaming account with the operator is required. To be able to open an account, a player must be over 18 years old, Swiss-resident and not be banned from gaming. The provider of online games must identify the players. Winnings from licensed gambling can only be transferred to accounts in the name of the player (Art. 45 et seq. MGO).

3.3 What terminal/machine-based gaming is permitted and where?

Gaming machines that involve a predominant element of skill can be operated outside casinos, if permitted by cantonal law (Art. 106 para. 4 Federal Constitution). Cantonal permission can only be granted if the gaming machine has been approved by SFGB as skill-based.

There are two main categories of slot machines:

• Gaming machines, which have entertainment as their sole purpose (such as table football, pinball and any kind of sports simulators).
• Slot machines, which give the player an opportunity to win money or other prizes of monetary value (such as points, chips or goods).

The rules for the control and construction of the slot machines are set forth in the Casino Ordonnance. The MGO contains restrictions as to the stakes for slot machines according to the type of the casino licence (A or B).

4. Enforcement and Liability

4.1 Who is liable under local law/regulation?

The following parties are liable for breaches of the relevant legislation:

• the casino licensee;
• the customer itself;
• the large-scale/small game licensee; and
• the gaming service operator and supporting third parties.

4.2 What form does enforcement action take in your jurisdiction?

The licence may be withdrawn from domestic casinos or large-scale operators. In addition, prison sentences and high fines up to CHF 500,000 can be imposed (Art. 131 MGA).

Websites of foreign gaming providers can be blocked, and the provider will be listed on a public blacklist (Art. 86 MGA).

4.3 Do other non-national laws impact upon liability and enforcement?

No, there are no other non-national laws that have an impact upon liability and enforcement. Switzerland is not a member of the European Union; therefore, EU law is not applicable.

4.4 Are gambling debts enforceable in your jurisdiction?

In general, under Swiss law, gambling and betting debts do not give rise to a claim (non-actionable claim; Art. 513 of the Swiss Code of Obligations).

A claim may arise if the claim arose during a licensed lottery game or during a game in a casino licensed by the competent authority (Art. 515 of the Swiss Code of Obligations).

4.5 What appetite for and track record of enforcement does your local regulatory authority have? Have fines, licence revocations or other sanctions been enforced in your jurisdiction?

2018

SFGB imposed fines in the amount of CHF 1.5 Mio. and demanded CHF 500,000 compensation for illegally earned profits (based on the gambling legislation in force until 31 December 2018). SFGB did not enforce other (administrative) sanctions.

In 2018, Gespa opened 78 cases for suspected violations of the lottery legislation (based on the lottery legislation in force until 31 December 2018).

2019

The MGA came into force on 1 January 2019 and the first six online licences were granted in June and November 2019.

During the second half of the year, SFGB and Gespa published three blacklists of blocked websites of foreign gaming providers. In addition, SFGB instituted 108 criminal proceedings for illegal gaming.

2020

In April and November 2020, three more licences for the offering of online games were granted. SFGB and Gespa published further blacklists at the beginning of and throughout the year.

2021

In August 2021, two more licences for the offering of online games were granted. Since the beginning of the year, SFGB and Gespa have been publishing further blacklists.

It remains to be seen whether the blocking measures, new player protection measures and new provisions to ensure secure and transparent gaming operations will prove their worth in practice.

5. Anticipated Reforms

5.1 What (if any) intended changes to the gambling law/regulations are being discussed currently?

Since a legal reform has just taken place and the new MGA and the MGO came into force on 1 January 2019, no further reform is pending for the time being.

Prosecution and fines under criminal law

A general introduction to gambling law in Switzerland

In January 2019, a comprehensive legislative overhaul entered into effect. The revised gaming legislation does not define ‘games of chance’ or ‘gambling’. Instead, it uses ‘money games’ as the key overarching notion that also refers to the legislative scope: the Gaming Act (or literally, the ‘Act on Money Games’) deals with a wide range of games that involve the expectation of a prize or something of monetary value in exchange for a stake (money or money-worth) or the conclusion of a legal act (Article 3(a) Gaming Act).

The Gaming Act distinguishes between ‘major’ and ‘minor’ games; notions that refer to the range that the games feature. Major games include lotteries, sports betting and games of skill that are carried out automatically, intercantonally or online (Article 3(a) Gaming Act). Minor games by contrast are lotteries, sports bets and poker tournaments that are neither automated nor intercantonal nor online (small lotteries, local sports bets, small poker tournaments) (Article 3(f) Gaming Act). The Gaming Act further defines the following commonly known gaming terms:

1. lotteries are money games open to an unlimited number of persons, or at least a large number of persons, in which the result is determined by the same random draw or similar procedure (Article 3(b) Gaming Act);
2. sports betting is a money game in which the winnings depend on the correct prediction of the course or outcome of a sports event (Article 3(c) Gaming Act);
3. casino games are money games open to a limited number of persons, excluding sports betting, skill games and small games (Article 3(g) Gaming Act); and
4. games of skill are money games in which the outcome (the prize money) depends entirely or predominantly on the skill of the player (Article 3(g) Gaming Act). In this sense, ‘skill competitions’ are games of skill, too. The same goes for ‘(daily) fantasy sports’ if the predominant character of skill can be shown. The notions of pool betting and spread betting are not defined and secondary lotteries are not regulated in the law.

‘Competitive sports for prizes’, namely e-sports, are subject to much discussion, including in Switzerland. The regulatory authorities have not taken a final stance on the issue of e-sports. The Swiss Gambling Supervisory Authority (Gespa; this was formerly the Inter-Cantonal Lottery and Betting Commission (Comlot)) published a statement online in which it noted that neither a general definition of e-sports nor accordingly an overall qualification under the Gaming Act could be provided. E-sports were likely to qualify as games of skill that may or may not require a licence. It also quoted the Federal Office of Sports taking the view that e-sports did not currently qualify as official sports. 2 If an e-sports event were to be qualified as a sports competition, it would as consequence fall outside the scope of the Gaming Act.

‘Free prize draws’ do not fall within the scope of the Gaming Act. According to Article 1(2)(e) Gaming Act, the Act does not apply to lotteries and games of skill carried out for a short period of time by media companies to promote sales. However, the exemption only applies if these games do not pose a risk of excessive gaming and if the free gaming option is available on the same favourable terms of access and participation as by way of a pay option or the conclusion of a legal act.

With regard to the distinction between ‘speculative’ and ‘hedging’ financial products as well as gambling products, the Gaming Act states that it does not apply to activities subject to supervision by the Swiss Financial Market Supervisory Authority (FINMA) in accordance with the Financial Market Supervision Act of 22 June 2007 (Article 1(2)(f) Gaming Act). In other words, FINMA supervises financial products that involve elements of chance.

ii Gambling policy

Gambling generally is permitted but subject to strict regulation. Contrary to recent developments in other jurisdictions, it is not prohibited to encourage people to gamble. However, this policy is counterbalanced with the political expectation that some of the proceeds from games of chance should be allocated to society, for instance, to good causes or the federal retirement fund.

iii State control and private enterprise

The Gaming Act implemented a protectionist approach where the domestic land-based operators of games of chance enjoy the exclusive right to operate their games online, too. However, international business-to-consumer (B2C) and business-to-business (B2B) operations can serve as business partners to domestic lotteries and casinos. These limitations do not apply to the skill gaming sector.

The lottery and sports betting sectors are state-owned: the cantons (regions) have granted only two licences to large-scale public lotteries: Swisslos and Loterie Romande. By contrast, casinos can be privately held, and the same goes for games of skill operations.

iv Territorial issues

Casino games are regulated and licensed at federal level. Lotteries, sports betting, skill gaming and poker tournaments are regulated by cantonal law, with the federal gaming laws serving as the applicable framework legislation. For example, federal law addresses poker tournaments in the relevant Act and Ordinance, but the cantons hold the powers to regulate (or prohibit) poker tournaments in more detail in their implementing cantonal laws.

v Offshore gambling

Bearing in mind experiences in other markets and the limited effectiveness of the Swiss domain blocking, a significant share of remote black-market activities can be suspected in Switzerland owing to the chosen regulatory model (ring-fenced market), the long cooling-off period for international B2Cs and the high commercial value of the Swiss online gaming market. In principle, regulators and other authorities have enforcement instruments available under the applicable laws to act against unlicensed foreign operators. However, in using these instruments, there are legal, practical and technical difficulties.

Warning letters and domain blocking

Both regulators, the Federal Gaming Board (ESBK) in the area of casino games as well as Gespa in the area of lotteries, sportsbook and skill gaming, have the powers to send out warning letters to foreign operators and to put unlicensed gambling and gaming domains on a blacklist. Swiss ISPs are legally obliged to apply domain blocking to such domains. The deterring effect of domain blocking is limited for various reasons. Technically, the domain blocking can rather easily be circumvented, for instance, by the use of VPN clients. Legally, players do not risk prosecution under criminal law. Finally, there is no payment blocking available under the Swiss Gaming Act.

Prosecution and fines under criminal law

In principle, the regulators and law enforcement have the legal bases to use criminal prosecutions against unlicensed gaming offers and related advertising. These means of criminal law are readily available and used against illegal domestic offers. They can also be used against domestic advertising for foreign offers. By contrast, while these instruments are, in principle, also available in relation to foreign unlicensed offers, the authorities have thus far shown little appetite to use these means against foreign operators. This may be for various reasons, including uncertainty as per the applicability of criminal law to foreign operators and practical issues of enforceability.

Legal and regulatory framework

i Legislation and jurisprudence

The federal Gaming Act was adopted by the Swiss parliament in September 2017 and subsequently a referendum organised by an alliance of youth parties. The Gaming Act was adopted by the voters in June 2018 and entered into effect on 1 January 2019. Apart from a few exceptions defined in the law, the act serves as the legislative framework for all games involving consideration and prize.

The Gaming Act is complemented by federal secondary law, cantonal law and inter-cantonal law:

1. the Federal Government’s Gaming Ordinance;
2. two ordinances by the Federal Department of Justice and Police: Casino Ordinance and Money Laundering Ordinance;
3. the ESBK’s Money Laundering Ordinance;
4. 26 cantonal laws implementing the federal gaming laws; and
5. inter-cantonal agreements through which the cantons regulate shared issues such as licensing.

The ESBK is the regulator for casino games, while Gespa is the inter-cantonal regulator for lottery, sports betting and skill games. Furthermore, the Federal Department of Justice and Police exercises overall supervision regarding money games and enjoys certain powers, too.

iii Remote and land-based gambling

Although the law distinguishes between remote (online) and bricks-and-mortar (offline) gambling, there are no separate, independent online licences available in the area of lottery, sportsbook and casino games. Separate online licences can only be applied for in the field of skill games. Casinos and public lotteries can, upon approval by the respective regulator, offer their games online, too.

iv Land-based gamblingCasinos

There are currently 21 casinos in Switzerland. Casino games, games of chance on gaming machines as well as large poker tournaments can only be offered by and within the licensed bricks-and-mortar casinos. The federal government (the Federal Council) determines the number of licences (i.e., ‘concessions’) (Article 5(3) Gaming Act).

While there are no bookies in Switzerland, the two public lotteries can sell their lottery and sports-betting products in their respective geographical territories, Swisslos in Italian- and German-speaking Switzerland, Loterie Romande in French-speaking Switzerland, notably through a wide network of kiosks.

Depending on the applicable cantonal laws, automated games of skill may or may not be permissible in gaming halls or amusement arcades.

Cantonal laws may permit small poker tournaments on their territory, which most cantons allow for in their implementing laws. In comparison to large poker tournaments in casinos, these tournaments are subject to various regulatory limitations.

v Remote gambling

Prior to the adoption of the Gaming Act, Switzerland was one of many unregulated online gaming markets for international operators. Domestic lotteries offered a limited range of products also online without an express legal basis. By contrast, domestic casinos had no legal possibility to offer games of chance online.

The situation significantly changed with the Gaming Act. Public lotteries can offer a wide range of lottery and sports-betting products online. Similarly, casinos can offer a full range of casino games as well as poker online. Persons with residence or habitual stay in Switzerland can sign up to these licensed offers and play remotely.

Casinos and public lotteries can seek business partnerships or collaborations with international B2Cs and B2Bs, provided that certain legal requirements are met, such as the good reputation criterion (B2Cs) or a fit and proper test (B2Bs and poker collaborations). The good reputation criterion also refers to former commercial activities on the Swiss market. However, the international business partners do not need to seek establishment in Switzerland. This requirement only applies to skill gaming operators who can apply for an independent online licence.

vi Ancillary matters

While game operators (lotteries, casinos, skill game operators, poker tournament organisers and minor games organisers) need some form of licence or authorisation, platform or game providers do not need to, and nor are they able to, apply for licences. The regulator considers the domestic operator as the licensee. However, if the domestic casino wishes to see a partnership with an international B2C or B2B approved, it will have to make sure that the international partner meets various regulatory requirements.

While there is no personal licensing for key individuals in land-based casinos, they nevertheless need to be approved by the regulator as the law requires them, for instance, to enjoy a good reputation. The latter criterion also applies to international B2Cs and B2Bs when they are considered as main business partners.

There are also various technical requirements, such as that casinos may only purchase online games from suppliers that use an IT security management certified in accordance with the ISO/IEC 27001 standard or ensure comparable security by other means.

vii Financial payment mechanisms

Generally speaking, Swiss gaming law itself does not per se exclude certain payment mechanisms such as e-wallets or cryptocurrencies. Naturally, any payment mechanism must be compliant with anti-money-laundering requirements. Furthermore, the Gaming Ordinance requires that winnings and balances in a player account can only be transferred to a ‘payment account’ that is held in the name of the holder of the player account. The initial practice of the ESBK of limiting ‘payment accounts’ to Swiss bank accounts was criticised in the casino sector and scholarly literature. 3 The ESBK has subsequently broadened the range of accepted payment accounts.