Is the Stimulation of Domestic Online Casinos Paying Off in Switzerland?

Article by : Helen Jul 22, 2020

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A year or so passed since Switzerland has started to block foreign-based online gambling operators – the law came into force on July 1, 2019 – to join the cohort of the ‘kept-to-themselves’ countries, driving farther and farther away from the free-market gambling model to what we used to call monopoly. It’s time to analyze whether the blockage paid off.

Is the Blockage Lawful?

If you’re unaware of the details, you might find the blockage outrageous…but that would be a wrong assumption. In fact, the notorious law was put on the vote in 2018 and approved by a staggering number of voters, around 73%.

As a result, the fully lawful provision squeezed all offshore online gambling operators out of the Swiss market (all the banned online casinos are united into a single blacklist) and for the first time allowed Swiss-based companies to offer online gambling services after obtaining the correspondent license. Also, the law is aimed at fighting gambling addiction, which, according to different estimations, afflicts about 50,000 to 100,000 people in the 8.3 million nation.

What about Revenues?

While it was expected that the prohibition would not be welcomed by local gamblers, the main bet was made on the increase in gambling revenue from the state-controlled online casinos. Did it pay off? Let’s have a sneak peek at the numbers since usually, they don’t lie.

The casino gaming revenue in Switzerland has been steadily declining from 2010 to 2017 – from 743 million euros to 667 million euros respectively – whereas 2018 and 2019 became the first two consecutive years of increase. According to the Federal Casino Commission: Annual Report 2019, the land-based casinos generated by about 5% more than in 2018, whereas the online gambling market – represented by the four licensed online casinos – brought €23.5 million in its first partial year of operations.

So the question is, is €23.5 million a decent number? Well, you don’t have to be an expert to see that it represents only a tiny fraction of the total state income from gambling. But maybe online gambling is less profitable in general, you may hopefully ask. It fluctuates depending on the region, but the statistics for the European online gambling field indicates that the Gross Gaming Revenue from online gambling almost equals that of brick-and-mortar venues.

Verdict? Unambiguous: Swiss online casinos are not performing well, to say the least.

Is there a Way Out?

Despite the unsatisfactory result, the list of banned websites is growing (there are more than 200 blacklisted domains at the time of writing), whereas only seven of about two dozen Swiss gambling venues have been authorized to launch online casinos so far.

There’s no doubt that the field will continue to grow for the next couple of years, and more state-licensed casinos will go online, but the only visible solution to the revenue thing is the transition to the good old free market. Unless that is done, there’s very little hope to see Swiss online gambling a decent competitor to its more successful offline counterpart.

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