Closing time: Are international operators going to be locked out of Switzerland?

2018 was a watershed year for the Swiss egaming industry as the Money Gaming Act was passed by the Swiss parliament following an overwhelming referendum vote by the Swiss public.

At its heart, the Money Gaming Act regulates the Swiss market, bringing the regulation of casino gaming, sports betting and lottery under one law and putting these industries under the regulatory purview of the Swiss Federal Gaming Board.

While this law perceptibly makes it easier for international operators to enter the Swiss market, the government effectively closed the door to firms in two areas. The first of these is that Swiss casino operators will now have the exclusive right to apply for egaming licences, in a process that will be restricted to them for a six-year period.

The second is that under the act, Swiss ISP providers will be required by law to block the access of international gaming operators, with the Swiss government reimbursing them for any expenses incurred in doing so.

On 1 January, the Money Gaming Act passed into law. Dr. Andreas Glarner, partner in Swiss law firm MME Legal discusses the market’s reaction to these changes.

EGR: In the wake of the Swiss money gaming act coming into force have many of the international operators begun leaving the market?

Dr. Andreas Glarner (AG): While the new law has taken effect from 1 January, the ISP blocking of international sites will only become effective from July, its really business as usual for most operators until then.

The main features of the act are twofold, firstly the mechanisms are put in place to allow Swiss operators to apply for online licences (this is however limited to existing licence holders in the so-called terrestrial sector) and secondly the exclusion of international operators from operating in the Swiss market. The first licences are only expected to be issued in July, when the new regulations concerning ISP blocking come into force.

EGR: What are the Swiss authorities doing in the run up to July?

AG: Very little regarding dealing with foreign operators. Until the new regime takes effect, Swiss authorities may not implement the technical blocking measures.  If the respective provisions were already in force, the measures would effectively empty out the egaming market without any replacement. Despite this time lag, many providers have chosen to shut down their Swiss operations in advance, while others have chosen to continue operating right up to the change in the law.

Other firms may continue to operate beyond that and leave it up to the user to find an alternative way (such as VPN networks) to access their sites. From a user side, this is still permissible and users who do so will not face any criminal action and the most punishment that foreign providers are likely to face is having their sites blocked to Swiss players.

EGR: The new legislation includes a so-called good reputation clause, how has this been received in the Swiss market and have many operators voiced concerns?

AG: Yes, this new clause can be hugely frustrating to many existing operators as it requires operators to have a “good reputation” to collaborate and partner with a Swiss casino in the online market and if you have actively targeted the Swiss market in the last five years you cannot qualify on this basis.

The definition being applied by the Swiss gaming board is still quite broad and a lot of operators aren’t qualifying to operate in Switzerland. In a nutshell those who are qualified to operate are mainly the B2B providers or operators with little or no presence in the Swiss market.

The Gaming Board announced it would issue guidance in this area, it hasn’t done so yet but it is expected to be issued in time for the licensing process for local providers later this year.