Swiss Online Gambling Referendum — Weekly Round-up for June 15, 2018

By Brian Cullingworth, Last updated Jun 15, 2018

Swiss Online Gambling Referendum Takes Place This Weekend (Update)

Younger demographic fights against internet censorship

Switzerland‘s coalition of youth wings and political parties will have their say Sunday June 10 on new gambling proposals from government that would exclude foreign companies from the online gambling market, making it the exclusive preserve of local land casino operators.

The Swiss government was forced to take the issue to a referendum following a petition of over 50,000 organised by the younger demographics between the ages of 18 and 29 (see previous InfoPowa reports) who fear that the government’s restrictive gambling proposals constitute censorship of the internet.

The proposals have already been approved by the Swiss parliament.

The changes to Swiss gambling laws will position them among the most restrictive in Europe, triggering criticism that the government is turning Switzerland into an ‘authoritarian state’.

Defending the online gambling exclusivity given to local land casino operators, Swiss Justice Minister Simonetta Sommaruga said that the restriction was essential to ensure that gambling companies abide by the government’s rules, thus reducing the risk of gambling addiction, which annually costs the government around half a billion Swiss francs (US$500,000).

It will also ensure that the government’s tax requirements are fulfilled, she said; last month Sommaruga told an online forum that Swiss punters spend around 250 million Swiss francs annually on unregulated betting sites abroad that do not pay Swiss taxes.

Opponents of the government view say that the country could gain a greater tax harvest by opening the online market to the many foreign online companies prepared to licence and pay taxes in a regulated jurisdiction.

Whether the youth demographic will be successful in the referendum is uncertain; recent polls have indicated that 58 percent of Swiss voters will likely support the government proposals. The average age of parliamentary lawmakers in Switzerland is 53.

Swiss voters in Sunday’s referendum will also be asked whether they support a “Sovereign Money” proposal from government which would legally bar any institution besides the central bank from creating new money.

The proposed law changes the current situation, where the central bank issues only around 10 percent of the money in circulation, with the rest issued virtually by private banks and other institutions when they provide credits to clients.

Supporters of the change argue that the present system permits institutions to lend more than they hold in reserves, raising the risk of another financial crisis similar to the crash of 2008.

Opponents of the sovereign money concept, who presently have the upper hand according to the polls, say the proposed changes threaten the nation’s financial stability.

Swiss Referendum: Exit Poll Indicates Voters Will Say Yes To Gambling Reforms, No To Sovereign Money Proposal (Update)

Online gambling will be exclusive to Swiss land licensed operators, with strict enforcement

The Swiss referendum Sunday has been completed, and will deliver affirmation of two key laws supported by the government: Voters approved parliament’s gambling reform proposals, and rejected the sovereign money proposal which would have seen new money issuance confined to the central bank, a situation to which government was opposed.

That’s what exit polls conducted by independent research institute gfs.bern projected Sunday afternoon, predicting that a mere 25 percent of voters supported the sovereign money proposal.

Researchers also predicted that voters will approve by a wide 72 percent margin the government’s gambling reform law designed to give locally licensed land betting operators exclusive authority to offer both online and land gambling products.

The reforms are backed by stringent enforcement provisions to keep foreign firms out of the market despite claims from a mainly youthful activist and political demographic that the law represents censorship of the internet (see previous InfoPowa reports).

Due to take effect in 2019, the government says the reforms are designed to tackle gambling addiction and ensure that gambling tax revenues due from Swiss gambling are received.

Both houses of parliament have already passed the legislation.

Swiss Referendum Results Released (Update)

Earlier research exit polls proved to be correct

The exit poll predictions by Swiss research institute gfs.bern on Sunday (see previous InfoPowa report) proved to be accurate that evening when the official figures for the referendum confirmed that the tough gambling reforms passed by parliament received support from 73 percent vs. 23 percent of votes against – mainly from younger demographics.

The voter turn-out was described as low.

A spokesman for the Christian Democratic Party described the vote for the government proposals as a pragmatic decision by Swiss voters who support the concept of funding civil society projects with revenue emanating from taxes on local casinos and lotteries.

The reform makes online gambling the exclusive preserve of Swiss authorised gambling companies, who may nevertheless partner with foreign firms in a similar model to that which evolved in Belgium.

Opponents to the government’s reforms expressed disappointment at the result, some repeating their belief that the enforcement measures enshrined in the law constitutes censorship of the internet.

The Swiss Federation of Casinos welcomed the result and commented that government may offer a four-year tax break to operators that elect to offer online products following concerns that the sliding scale tax rate, which runs from 20 percent on GGR to as much as 50 percent, could be too onerous at the top end, making Swiss offers less competitive and profitable.

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