Gambling fact-check: ‘closed Switzerland’ vs ‘open Denmark’

Blocking gambling sites of foreign providers has been a major issue during the campaign, with both sides pointing to the Danish model to make their point. Keystone

Denmark is an open market when it comes to online gambling and Switzerland should follow its example, say opponents of a new Swiss gambling law. But supporters claim the Danish gambling model and the proposed Swiss approach are actually equally restrictive.

Ahead of a nationwide vote on the issue on June 10, swissinfo.ch looked at the accuracy of statements both sides have made about Denmark. Although we didn’t find any outright lies, some comments are certainly misleading. 

The claims

According to the proposed lawExternal link, websites of casinos based outside Switzerland will be blocked within it. In Denmark, on the other hand, since 2012 all casinos – domestic or foreign – can be granted licences, as long as they comply with strict regulations. This is a win-win for casinos and society, say opponents on the “No” campaign websiteExternal link:

“The experiences of other European countries such as Denmark and Britain show that countries that integrate what is offered online internationally by casinos – instead of excluding it – can effectively limit the black market (to less than 5% of the whole) and benefit from additional tax revenue for the state.”

swissinfo.ch

According to a 2016 reportExternal link by management consultants Deloitte, “the [Danish] model is considered successful with a large number of licence holders, and an estimated small amount of illegal gambling. […] Many licence holders contribute to a competitive gambling market with little incentive for gamblers to use illegal sites”. The Danish Gambling Authority could not confirm to swissinfo.ch whether the black market share was less than 5%. In its 2017 annual reportExternal link it says that “the number of suspected violations requiring further evaluation fell between 2016 and 2017, indicating the illegal market in Denmark is still very small”.

Data from the gambling authority shows gross revenue from online casinos reached DKK1.8 billion ($283 million) in 2017External link, a marked increase from the DKK870 million they generated in 2012External link, the year the new gambling law came into effect. Online gambling revenue is taxed at 20% by Danish authorities. In Switzerland, the justice ministry says in its Q&A section on the new gambling lawExternal link that more than CHF250 million ($252 million) “flows into the coffers of foreign internet casinos based in offshore locations such as Malta or Gibraltar”, as reported by the University of Bern in a 2015 studyExternal link.

The Swiss justice ministry is also quick to point out that it’s not as if anything goes in Denmark.

“In Denmark, not every foreign provider receives a licence either. So there are also network blockages in Denmark.” 

swissinfo.ch

So said Justice Minister Simonetta Sommaruga on April 28, in response to a questionExternal link from a reader of freesheet 20Minuten, who had said surely there would be even more money for Swiss institutions and social security schemes (some of the beneficiaries of casino tax money), if foreign casinos weren’t shut out of the market – unlike in Denmark.

Since 2012 Denmark issues licencesExternal link to online gambling providers regardless of where they are based, if they meet specific requirements. It also has measures in place to block unlicensed sites. In her answer, Sommaruga went on to explain provisions in the proposed law but didn’t answer the question. Had she done so, she would have had to admit that the reader was correct in pointing out the additional revenue foreign casinos would likely generate, as they have in Denmark (see above).

The blocking of websites is a sore point with the “No” campaigners, who object to what they consider state censorship of the internet. What’s more, they say on the No campaign websiteExternal link, blockages are pointless:

“Network blockages can be bypassed with just a few clicks and are therefore practically useless for blocking foreign [gambling] in Switzerland.”

swissinfo.ch

Deloitte says one disadvantage of the Danish model is that the “internet-block and payment-block is easy to surpass [sic] for users”. The Swiss justice ministry itself admits thisExternal link but adds blockages won’t be ineffective as a result. It says that “although players can get around the block, most people will stick to it. […] The stop sign will work like at a building site: it can be ignored, but everyone knows it can be dangerous to do so”.

Opponents argue they are not calling for a legal vacuum. Anaïs Grandjean, co-president of the Young Green Liberals, acknowledged in a television debateExternal link on May 9 that Denmark has a site-blocking system, adding:

“But it almost never uses this because it doesn’t need to.”

swissinfo.ch

The Danish Gambling Authority told swissinfo.ch that between 2012 and 2017, 25 websites were blocked, of which 13 remain blocked. “Almost never” is open to interpretation, but an additional 24 unauthorised sitesExternal link were blocked on February 6 this year, more than three months before the television debate.

Jean-Luc Moner-Banet, CEO of the lottery in French-speaking Switzerland, responding to Grandjean during the television debate, concluded:

“At the end of the day, the Swiss system [being proposed] is very similar to the system in Denmark.”

swissinfo.ch

As Moner-Banet explained in the debate, foreign casinos will be able to apply for online gambling licences in the next round of bidding, provided they meet requirements set out in the proposed law. But this will not be possible until six years after the law comes into forceExternal link. Foreign providers would then need to obtain a licence through a subsidiary in Switzerland or by acquiring a share in a Swiss casino. No such requirements exist in Denmark, although providers from outside the EU and European Economic AreaExternal link must have a legal representative in Denmark.

The verdict

Opponents of the new law are correct when they say Denmark is open in that it will grant a licence to any online casino that fulfils the criteria. However, it still blocks those that offer unauthorised gambling.

The government is correct when it says Denmark blocks websites that offer unauthorised gambling. However, the Danish and Swiss laws are not as similar – and therefore Switzerland is not as liberal – as some supporters imply.

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