Swiss think tank calls for online-only licences

Avenir Suisse – an economics and social issues think tank – argued that gambling in the country is often both politicised and inefficient.

It noted that politicians choose where the proceeds of gambling revenue go and that a “veritable cash distribution industry” has grown around Switzerland’s two lotteries – Swisslos and Loterie Romandie – which combine for around 80 different lottery funds.

“The distribution of gambling money is not optimal,” the report’s authors said. “The cantonal lottery funds regularly finance projects for which the notion of public utility enshrined in the constitution is interpreted very broadly.”

In addition, the study noted that “contrary to popular belief”, tax revenue from some casinos goes toward different cantons from the ones where these casinos exist.

A further problem, it said, came from the fact that many cantons effectively acted as operators – through stakes in casinos – and regulators.

The think tank added that the way funds are distributed also leads to inefficiencies. It said that the costs of managing the lottery funds fell between CHF16m and CHF22m per year, while “the annual friction costs of the current system are expected to amount to several tens of millions of francs”.

The study also noted that the challenges created by Switzerland’s system of regulation were exacerbated by the rise of online gambling. Many regulatory duties are split between national-level and cantonal bodies and the study argued that “these two artificially separated spheres of play can be less and less so”.

As a result, it said changes were needed in three areas. First, it said the government should not take on the role of gaming operator and should instead focus on regulation. As part of this, it argued that the government should also focus on “redistributing directly” the proceeds of gambling.

Second, the countries two supervisory bodies – Eidgenössische Spielbankenkommission (ESBK) and Gespa – should be brought together as a single regulator.

Third, it said “a modular approach to regulation is needed”, replacing what it called the “analogue-first model”, in which online gambling is seen as an extension of a land-based licence. Under the think tank’s proposed system, operators would be able to apply for online-only licences.

“Unlike the current system, in which digital games are the exception, the opposite is

expected to happen in the future,” it said. “Analogue games would be treated as exceptions, which would turn the system upside down.”

Earlier this week, the Swiss Federal Council approved the creation of two more licensing regions, meaning the country could issue two more gaming licences. This would bring the total number of licensees to 23.