Illegal online casinos are increasingly a problem
Published: Wednesday, Jul 3rd 2024, 12:20
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Illegal foreign online casinos are becoming increasingly widespread in Switzerland. This is a problem for gambling addicts in particular, but the AHV is also suffering.
Since the Swiss population approved the revised Gambling Act by a large majority in 2018, previously illegal online gambling has been booming in Switzerland. With legalization, traditional local casinos were able to apply for an online casino license. There are currently ten Swiss providers spread across the whole of Switzerland.
Large illegal market
In addition to the legal online gambling business, there is also a large and constantly growing illegal sector. These are mainly foreign providers who also offer their games of chance in Switzerland without a license.
The Swiss Casino Association estimates that the market share of foreign online casinos will be around 40 percent in 2023. According to this estimate, 180 million francs flowed abroad in the previous year alone.
The economic damage caused by foreign online casinos is therefore enormous. These providers do not pay any taxes in Switzerland. As a result, the AHV also misses out on a considerable amount, as a large proportion of the profits from online gambling flow directly into the social welfare system. In the previous year, this amounted to around 120 million francs from legal offers. Foreign providers did not contribute a single cent.
Foreign providers operate unregulated
Foreign providers are also undermining Swiss player protection regulations. For example, people with problematic gambling behavior are not contacted or blocked. There are also often no limits for stakes and the risk of loss is correspondingly high.
In the event of a legal dispute, users must also contact the countries from which the casinos operate. These are often Malta, Cyprus or Gibraltar. Swiss courts do not have jurisdiction over gambling abroad, even if it is not illegal per se. "However, you play at your own risk," said the Swiss Federal Gaming Board (SFGB), which is responsible for supervision, when asked.
Illegal offers on the rise
However, the exact extent of illegal online gambling is difficult to estimate, according to the SFGB. The blocking list for illegal foreign providers published by the Commission provides an indication. Swiss internet providers are obliged by law to technically prevent access to these sites.
Since the revised Gambling Act made these bans possible, the number has risen steadily. The biggest increase was in mid-2022, when the number of blocked sites shot up from just under 600 to over 1,000. At the end of May 2024, there were 1738 sites on the blacklist. There is no sign of a trend reversal in the figures so far.
Network blocking only partially effective
Apart from blocking websites, the Swiss authorities have hardly any action against foreign providers. It is often not illegal in the providers' home countries to offer their services abroad. They therefore operate in a "gray area".
"The blocking of illegal websites must be stepped up," demands Gerhard Pfister, Member of the National Council and President of the Swiss Casino Association. Although the SFGB has already taken initial steps, "there are still major gaps in the prevention of advertising by illegal providers", Pfister continued in the association's latest annual report.
Profit maximization comes before player protection
"Illegal online casinos are a huge problem for gambling addicts," said Domenic Schnoz, Head of the Center for Gambling Addiction and Other Behavioral Addictions of the Canton of Zurich. He criticized the fact that foreign providers focus solely on "maximizing profits" as particularly problematic.
"In our experience, quite a lot of gambling addicts also play in foreign online casinos," Schnoz continues. The hurdle to doing so is often only a small one and the network blocks can be circumvented quite easily technically.
According to Schnoz, however, the bans are not completely useless. After all, they would certainly deter players. Unfortunately, it often doesn't help with real gambling addicts, because a gambling addiction is like an alcohol or drug addiction, where the addict will go to any lengths to obtain their drug.
Schnoz would therefore like to see the blacklist updated more frequently. It is currently only updated every three months, which is too infrequent given the fast pace of the business.
Player protection in Switzerland with room for improvement
According to Schnoz, player protection at licensed Swiss online casinos is much better. He has had good experiences in his dealings with individual casinos. But even in Switzerland, "there is still room for improvement", Schnoz continues. For example, some terms in the law are vaguely formulated. For example, the term "disproportionate stakes" leaves plenty of room for interpretation.
Another major problem is that there is still no common database of banned players. For example, an addict could easily play with several online providers at the same time without them being able to recognize the overall picture of problematic gaming behaviour.
Schnoz is not against online casinos in principle, as they address a need in the population and, with appropriate security measures, do not lead to gambling addiction per se. If players decide to gamble online, then a licensed Swiss provider is the safest choice in many respects.
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