Switzerland legalized gambling in 1923 in the form of lotteries. Brick-and-mortar casinos have been allowed from 2000 onwards, and there are currently 21 such establishments often visited by citizens of neighboring countries. Online casinos started popping up as early as 2019 after an amendment was passed for the Federal Act of Games of Chance. The amendment allows private companies to hold a Swiss online gambling license and offer services to Swiss players legally.
Switzerland has historically had issues with rampant gambling before the 2019 amendment. Its citizens were forced to gamble on unregulated websites that were not paying revenue tax and could not be blocked by the Swiss government. The amendment has allowed the government to restrict any unlicensed casino operator and even urged financial institutions to block transactions between unlicensed casinos and offshore bank accounts. Similar to the land-based casinos, there can only be 21 online casino Switzerland licenses issued, making the market extremely competitive.
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Switzerland Online Gambling Framework
While Switzerland is not a member of the European Union, they adhere to a similar gambling framework as the other European countries. Let’s take a closer look at the framework:
- The market allows private investors to hold an online gambling license for casino games but not sports betting. Sports betting remains a state monopoly which is different from other EU countries.
- High taxation rates start at 20% when under CHF 3 million. Progressive taxation rates on gross gambling revenue increase the percentage paid by 0.5 per million francs with a maximum of 80%. The taxation rate is the second-highest in Europe, only after France that can reach 100%, and does not include regular taxes between 11.9% and 21.6%. Players are also taxed on their wins if they exceed CHF 1 million.
- Online casinos that do not hold a license will be blocked. However, if the government fails to block unlicensed websites, they will not prosecute gamblers that visit them.
- While all online gambling forms are legal, only the casino and poker sectors can be offered by private investors. Lottery, lottery game variants, sports, and online sports betting remain exclusive to Swisslos and Loterie Romande.
Switzerland Gambling Licenses
The Federal Gaming Board ESBK issues Swiss gambling licenses, and the website is available in Italian, German, or French. ESBK can award casinos with two different licenses:
- Casino license A for Grand casinos with no maximum bet limit per game. There is no limit on the number of table games and video slot machines either, and progressive jackpots are allowed.
- Casino license B for Spa and resort casinos with a maximum of 3 tables. The maximum bet per spin cannot exceed CHF 25, and progressive jackpots are not allowed.
If a company wants to receive an online gambling license, they need to hold one of the above land-based licenses and request an extension from ESBK. The licenses cannot be transferred, but joint ventures between international companies and Swiss brick and mortar casinos are allowed. At the moment, all of the 21 land-based licenses are already held by Swiss companies, which makes it very difficult for international gambling companies to enter the market.
The licenses are valid for six years, and the European Union has publicly criticized Switzerland for its licensing requirements that heavily favor already established Swiss businesses. There are 26 cantons in Switzerland, and only 19 of them allow casinos, usually with one license available per canton. The scarcity of licenses has led to partnerships between international companies and existing casinos; for example, Oryx Gaming entered a joint venture with Grand Casino Luzern.
Conclusion
Switzerland has a heavily regulated land-based and online casino gambling environment established in 2019. Licensing requirements and fees are available on the ESBK website, and sports betting remains exclusive to the Swisslos and Loterie Romande duopoly. Only 11 of the 21 brick-and-mortar license holders have requested an online gambling extension when writing this article. Still, the number is expected to grow as international gambling companies are trying to enter the highly lucrative Swiss market.
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