From the “good news / bad news” file, residents of Switzerland have voted in favor of a referendum that will legalize online gambling, buuuuttt…only Switzerland’s brick-and-mortar casinos will be able to offer online gaming. The law, which has already been passed by both houses of parliament, will go into effect at the beginning of next year.

It is the latter part of that which has many up in arms. Opponents of the legislation view the banning of international gaming operators as a form of internet censorship. Youth divisions of political parties are especially enraged. For instance, on its website, the Young Liberal Party said (translated by Google):

The Swiss economy benefits in particular from a freely accessible Internet. The blocking of foreign Internet sites to protect domestic market participants is economically unreasonable. In addition, network blockades are a serious encroachment on the freedom of business and information.

With the decision to block the network, Parliament sets a dangerous precedent that opens the door to further interference in the freedom of the Internet and serves as a good example for those aspirations that simply want to shut out unwanted competition on the Internet. A sensible solution is obvious: The foreign online offer should be integrated and the corresponding companies regulated and taxed. This will secure important revenues for the cantons, youth, sports and AHV / IV.

The gambling law throws our country back in terms of digitization years and limits our competitiveness. Young-minded, Young GLP and Young SVP are therefore fighting together the patronizing and backward law and taking the referendum.

The referendum was approved overwhelmingly by Swiss voters, 73 percent to 27 percent, which was a much greater gap than expected. It is unknown to us if people were enthusiastic about legalizing online gambling and perhaps didn’t know about the foreign company restriction, wanted online gambling enough where they just didn’t care about the international operator ban, or were truly in favor of the ban.

Government Officials See Things Differently

Swiss Justice Minister Simonetta Sommaruga says the barring of foreign operators is necessary to make sure regulations are followed, specifically showing concern for problem gamblers. Things is, I can’t see any reason why rules can’t be enforced with operators located outside Switzerland boundaries. Why, because you might not be able to drive to their headquarters or something? Put together a proper licensing procedure and follow that up with proper regulatory oversight. If you can make sure a licensee in Switzerland follows the rules, you can make sure one in the Isle of Man can do so, too.

It is estimated that gamblers in Switzerland spend about $253 million on foreign gaming sites each year, so this new law will certainly help bring much of that back home to be taxed. The funny thing, though, is that the minimum amount of gambling winnings that will be taxed for a player will over a million Swiss francs, whereas it is only 1,000 Swiss francs right now. Thus, while the government will start getting more tax revenue from Switzerland-based online gambling sites, it will likely get less revenue from individuals.

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