Version: 01012005
Editor: Franka Pals
Publisher: Novamedia
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The Federal Republic of Switzerland is situated in the southern hart of Europe bordered by Austria and Liechtenstein in the east, Germany in the north, France in the west and Italy in the south.
Switzerland, well known by its cow bells, chocolate, pharmaceuticals, watches, Swiss army knifes, banking system and Alps, was not involved in the First and Second World War. Independence and neutrality became the brand names of Switzerland. Switzerland is neither a member of the UN nor the EU.
The 26 Cantons have a high grade of autonomy. The Capital is Bern, the only European capital without an international airport in its close surroundings.
In Switzerland there are four national languages:
(July 2004 est. Source: CIA)
Switzerland is a prosperous and stable modern market economy with a per capita GDP 20% above that of the big western European economies. Switzerland is still considered a safe haven for investors because it has maintained a degree of bank secrecy and has kept up the franc's longterm external value.
With an average of 42 hours worked each week people in Switzerland work more than in other countries. With low ancillary wage costs, a high level of employee motivation and acknowledged high quality standards, the labour costs in Switzerland are attractive by international standards. Switzerland has one of the lowest rates of taxation and social security contributions of all the industrialised countries - companies based in Switzerland are the first to gain. These charges represent just 33.75% of the gross domestic product.
| Population: | 7.450.867 (July 2004 est.) |
|---|---|
| Age structure: | 0 -14 years: 16,8% (male 647.362; female 602.333) |
| Currency: | Swiss Francs (CHF) |
| GPD | GDP - purchasing power parity - $239,3 billion GDP - real growth rate: -0,5% GDP - per capita: purchasing power parity - $32,700 (*Source: CIA, 2003 est.) |
| Telecom | Number of Mobile telephones: 64.5 % |
| Internet | Internet penetration: In March 2001 was online last 14 days: 43.8%. (Source: Pro Active International, The Internet Monitor.3. Legislation [Revision of the Federal Act on Lotteries and Professional Betting]) Internet hosts: 667.275 (2004) Internet users: 2,556 million (2002) |
Website: http://www.ofj.admin.ch/themen/ lotterie/intro-e.htm
The gambling for money has a constitutional basis in Art. 106 of the Federal Constitution of Switzerland. The constitution partitions the market in the sectors of Casinos (games of chance) on the one hand and the lottery and betting sector on the other hand. The first sector is governed by the Federal Act on Games of Chance and Casinos of 18th June 1998 (GCA), as discussed in 4.8; the latter by the Federal Act on Lotteries and Professional Betting of 8th June 1923 (LBA). The competence to regulate the entire sector of games of chance lies with the Federation; the competence for the execution of the GCA lies with the Swiss Casino Commission, for the execution of the LBA primarily with the Cantons. The Section Lottery and Betting of the Federal Office for Justice supervises the entire field of lotteries and betting in Switzerland and oversees enforcement, evaluates and reviews a sample of (cantonal) judgements, submits opinions to the courts and the authorities and answers a wide variety of enquiries from other authorities and the public. It also produces annual lottery statistics for Switzerland.
Lotteries in general are prohibited by the Swiss lottery law. Only the cantons have the right to hold lotteries for the public good.
The overall turnover of the market for games of chance in Switzerland today is approx. CHF 6,000 to 7,000 million.
The Swiss gaming market is divided into the market for lotteries and betting on the one hand, and the casino market on the other. The casino market is also deemed to cover the gaming machines that are still permitted in public venues up to 2005. Games of skill which offer a monetary prize (machines with which the manual or mental dexterity of the player determines whether they win or lose) and entertainment machines (racing simulators, video consoles and pinball machines) are not covered by either the GCA or the LBA and are thus not classified as belonging to either of these markets.
In Switzerland there are various forms of lotteries (in particular number lottery, sport lottery 'Toto') on offer. Besides these there are other lottery products in the form of paper lottery tickets and in electronic form) as well as to a very limited extent betting ('totalizator' betting at sports events). In addition to the major number lottery which is drawn on Wednesdays and Saturdays, countless types of scratchcards and tear-off envelopes can be bought at various outlets, such as kiosks, post offices, tobacconists, etc. Currently available only in French-speaking Switzerland, there are also the highly controversial "Tactilo" lottery machines in restaurants, bars etc., as well as other forms of electronically based gaming (e.g. Loto Express). Also, today it is possible to gamble in 24 existing so-called 'Kursälen' (Casinos) at the boule table and at money gambling machines with limited stakes.
The Swiss spent CHF 2,29 ($ 1,6 billion) billion on home based lotteries in 2003, with more than a quarter of the total gambled on the twice-weekly Swiss Lotto game. Each Swiss spends an average of CHF 312.- per year on authorized lotteries (and 4 betting). According to the law at least 50 % of sold tickets should go to prize money. Lotteries and betting that are authorized in Switzerland generate around CHF 400 million every year.
A distinction is made between large and small lotteries.
Large lotteries (with target amounts of above CHF 100,000.-) have been operated since 1 January 2003 by only two lottery companies. Swisslos and Loterie Romande. Three Swiss lotteries ( Sport-Toto- Gesellschaft, SEVA Lotteriegenossen- schaft and Interkantonale Landeslotterie) merged at the start of 2003 to form a single company called Interkantonale Landedloterie/Swissloss.
Located in Basel Swisslos serves the whole of Switzerland with the exception of the six cantons in the western part of the country, which are the jurisdiction of Loterie Romande.
The latter company is responsible for the Swiss Number Lottery (Wednesday and Saturday lottery) on the basis of a mandate of the above companies, which has a high turnover.
Small lotteries (target amounts below CHF 100,000.-) are often on offer at various events and are used to increase the attraction and often the financing of such events. In particular at small sports and society events lotteries or tombolas are organised where the price must not be money or something with a clearly defined money value. Such games are exclusively governed by cantonal law.
The LBA of 1923 governs two special areas of games of chance, namely lotteries and betting. A third area, known as mixed lotteries or premium bonds entirely got out of use for nearly forty years. The section "Lottery-like undertakings" governs - at secondary legislation level - the special areas of snowball systems and public competitions and prize draws.
Although the LBA seems to be a reasonably good law, in many areas it does not seem to be up to date with modern developments. This applies in particular with respect to lotteries offered in electronic form and the entire betting sector.
With the recently revised Federal Law on Casinos, the Federal Law of Lotteries will need (according to the Federal Council) to be revised as well since it may not offer contemporary solutions to a variety of problems. This is particularly true with regard to lotteries offered in electronic form and the entire betting sector. It also needs to be coordinated with the revised GCA on some points.
On 31 May 2001 the Federal Department of Justice and Police convened a commission of experts to work on the revision of the Federal Lotteries and Commercial Betting Act. On 9 December 2002, the FDJP referred the draft and explanatory report prepared by the commission of experts into the consultation (committee) stage, which lasted until end-March 2003. The Swiss Federal Council acknowledged the results of the consultation stage on 20 August 2003. It is very unlikely that the legislation would become effective before 2008, because the cantons and game organizers must be given sufficient time to prepare for its implementation.
The aim of revising the Lotteries Act is to ensure that lotteries are held properly and transparently and to protect society against the harmful knock-on effects of such games. The net proceeds of these games will, as before, be used to benefit charitable undertakings and good causes.
* Source: Swiss Federal Ofice of Justice
1-2% (depends on the canton) of the turnover is paid directly to the cantons according to a special key based on the number of inhabitants of each canton. There are no further taxes for the operators. The profit goes to the cantons for good causes. The operators itself are non-profit organisations.
Lottery winnings are considered in most cantons as income with the effect that winnings are not tax free (tax regulations are different from canton to canton). A speciality: Winnings over 50 CHF are subject to the 'Verrechnungssteuer' of 35%. This is some kind of pretax which is 'payed' by the lottery.
Example: Player wins 1000 CHF, Lottery pays out 650 CHF to the winner and 350 CHF are tax. The player can ask for the remaining 350 CHF as compensation for his standard income tax. Quite complicated... (Source: Daniel Gähwiler (Swisslos)
The amount of taxes concerning casinos, applied on the operator's gross income, is calculated from the difference between the sum of bets and the sum of gains which were paid out to players. The Federal Council determines the tax rate varying between 40% and 80%. However during the first four years of the operation of a casino the tax rate is minimized to 20 %. For detailed information see 5.2.
Website: www.comlot.ch/en/index.html
By Jean-Pierre Beuret, Chairman of the Association of Swiss Lotteries:
The Association of Swiss Lotteries is an association pursuant to Arts. 60 et seq. of the Swiss Civil Code and its head office is in Bern.
The Association was founded on 28 April 1982 by the Interkantonale Landeslotterie (ILL), the Société de la Loterie de la Suisse Romande (Loterie Romande- LoRo-) the (former) SEVA Lotteriegenossenschaft (SEVA) and the (former) Sport-Toto-Gesellschaft (Sport- Toto).
Today, Swisslos, Loterie Romande and Sport-Toto form the Assiociation of Swiss Association. The Assembly of Members is constituted by two representatives of each member Association. Moreover the Assembly elects the Association Chairman and the Board. Each Association member is entitled to a seat on the Board.
During the '30s the canton of Bern created the SEVA Lotteriegenossenschaft (SEVA) which organised lottery games on its territory.
Subsequently after the regrouping of several cantonal lotteries, the Inter-kantonale Landeslotterie -ILL- ( responsible for organising lottery games in the other German-speaking cantons and in Italian speaking Ticino) and the Société de la Loterie de la Suisse Romande -Loterie Romande, LoRo- (responsible for the six French-speaking cantons) were created. Eventually, in order to make the organisation of sport betting possible, the Sport-Toto-Gesellschaft (Sport-Toto) was created.
Even though each of these companies organised lottery games on a defined territory, except for the Sport-Toto company whose activity (sport betting) was extended throughout Switzerland, the need to coordinate rapidly became essential.
In 1959 a first Convention was signed to coordinate the activities of all four lottery companies.
In 1969 the four companies, ILL, Loterie Romande, SEVA and Sport-Lotto Toto, launched the Loterie Suisse à Numéros and the Société de la Loterie Suisse à Numéros was created for that purpose. The lotto game (bingo) soon became the most widespread in Switzerland.
The resulting changes for the Swiss lottery sector and the ever more frequent attempts from foreign companies to sell their lottery tickets in Switzerland during the '70s reinforced the need for more intensive cooperation. Therefore, in 1982 it was decided to create a non-profit-making association called the Association of Swiss Lotteries.
Within this Association the people in charge of lottery companies coordinate and exchange information on their activities, on the sector in general, on their current projects and on their respective results.
The 2 lottery companies in Switzerland are:
At present the activities of the Lottery enterprises are regionally regulated. This applies to the sales of the lots and plays as well as to the distribution of the profits. Loterie Romande is responsible for six west Swiss of cantons (Vaud, Fribourg, Valais, Neuchâtel, Geneva and Jura), the Interkantonal Landeslotterie provides for the cantons of German Switzerland.
In September 2004, both Swissloss as Loterie Romande decided to join Euromillions (worlds' biggest Lottery with 9 countries participating) in order to maintain market share (see 4.4).
Website: www.swisslos.ch
SWISSLOS was established on January 1, 2003 as a result of the merger of three lotteries: Interkantonale Landeslotterie, Sport-Toto-Gesellschaft and SEVA Lotteriegenossenschaft. The full name of the lottery is Interkantonale Landeslotterie / SWISSLOS which is located in Basel.
Gross income in 2003 was CHF 840 million. Paid out prize money in 2003 was CHF 438 million.
The lottery supports public service projects in the cultural, environmental, social and sports domains. All of Swisslos' profit - gained from the numbers lottery and from the sale of tickets - goes into the lottery funds of the twenty Swisslos sponsor cantons (the German-Swiss cantons and the Ticino). The yearly amount that goes to public service projects from Swisslos via the cantons is in excess of CHF 200 million.
At June 3, 2004, Interkantonale Landeslotterie/Swisslos has successfully completed certification to the WLA Security Control Standards (www.world-lotteries.org/).
The products are:
Lotto: - Lotto sat/wed
Sportsbetting:
Instant (scratch tickets):
Website: www.loterie.ch
The Société de la Loterie de la Suisse Romande was founded on July 26, 1937 to run lotteries strictly in accordance with federal and cantonal laws and regulations. The cantons of Vaud, Valais, Fribourg, Neuchâtel, Geneva and Jura are members of this organisation and redistribute all the benefits of the lottery 'Loterie Romande' to good causes. The money is used especially to finance social welfare, health, cultural as well as research projects.
Today, the Loterie Romande still serves its original purpose. Profits, remaining after winnings and overheads have been paid, are devoted entirely to the support of social, cultural or research institutes of public utility in the French-speaking part of Switzerland which are in no way legally committed to State bodies (Confederation, Canton or Municipality). These sums are allocated by independent entities that are appointed or approved of by the cantons. Every year thousands of persons take benefits directly and indirectly from the benefits of the Loterie Romande.
Total profits for 2003 are CHF 175 million of which over CHF 143 million was donated to benificiaries.
Online products are:
Loterie Romande distributes numerous scratch games. New in 2002 was a lottery scratch game on cd-rom; Mozaic.
The Lottery Romande, as the pioneer of instantaneous tickets - in 1978 LoRo introduced the first scratch ticket in Europe, the Tribolo - was ranked in 2000 3rd in Europe in terms of per capita sales of this type of game. It ranks 1st for the sale per inhabitant of keno type games (LotoExpress and Banco Jass). In the world ranking of State lottery companies, the Lottery Romande comes 30th in per-capita sales of all types of games taken together (instantaneous tickets, number lotteries and other on-line games of the keno type, with the exception of Tactilo).
The Loterie Romande and the PMU français signed an agreement in 1991 creating a network of retailers in the Suisse Romande that offered wagering on French and Swiss horse-races. The PMU français contributed its computer system and its know-how, the Loterie Romande its right to exploit bets and lotteries in order to give its entire profit to institutions of public utility and to stimulate the economic growth of Swiss horse-races (70% for public utility, 30 % for the Swiss Federation for horse-races). In December 2001, the contract has been extended for another 10 years.
Euro Millions is a new Lotto game organized by multiple european countries.
This first European lottery is an initiative from Française des Jeux (France), Camelot (UK) and Loterias y Apuestas del Estad (Spain). The first draw took place on Februari 13th, 2004.
As of October 8th, 2004, Belgium, Luxembourg, Switzerland, Portugal, Ireland and Austria joined Euromillions. With nine nations taking part, EuroMillions is now the world's biggest lottery in terms of population (200 million). The biggest jackpot paid out since the launch of EuroMillions in February was 33 million Euro. But prizes could run up till 50 million Euro. The chance of winning the jackpot is one in 76 million. The organisers of EuroMillions guarantee a one-in-24 chance of a win. To hit the jackpot, punters have to select seven lucky numbers - and hope they come up trumps. If no one wins, the jackpot rolls over to the following week. There are no restrictions on where a person can buy a ticket, but winnings can only be collected in the country of sale. Tickets cost SFr 3,20 each.
The Federal Lotteries and Professional Betting Law forbids lotteries in Switzerland (art. 1). Nevertheless, it empowers the cantons to authorise lotteries provided that all the global profit realised is redistributed to good causes and charity corporations (art. 5). Thus, each year, the two Swiss lottery companies (Swisslos, LoRo,) turn over their entire profit to ad hoc commissions after deduction of their overheads.
The lottery and betting companies bring in annually some 400 million francs for public cultural, social and sports causes of which 150 million francs in French-speaking Switzerland.
The cantonal distribution commissions, called lottery funds on the territories of Swisslos and cantonal distribution commissions on the territory of the Loterie Romande, redistribute the profits to tens of thousands of non-profit-making public utility institutions who are active in the following areas:
The Sport-Toto contributes 25% of its annual profit to the Swiss Olympic Committee and 75% to the cantonal distribution commissions responsible for funding various sports.
Switzerland is the home of international bodies such as:
But the following organizations have their headquarters also in Switzerland:
And exactly those four bodies, UEFA, FIFA, WLA and EL, created the European Football Pool (EFP), an Incorporated Association pursuant to Article 60 ff., Swiss Civil Law.
The purpose is, in close cooperation with the European other relevant Regional Lotteries Associations and the World Lottery Association, to act in and represent the common interests of associated companies in general and vis-a-vis FIFA, UEFA and the national football associations and football leagues, in particular.
The Association shall complete all tasks necessary in the realisation of its general purpose, in particular by:
Membership shall be restricted to state licensed or authorised Toto and/or sports betting companies who contribute the money deriving from their net revenue or their taxes wholly or in part to national sports activities. In addition they should undertake the realisation, by means of their membership fees, of the UEFA-Intertoto Cup and other competitions. The members may base their betting products on these games series.
For the Bylaws of the European Football Pool (EFP),see PDF document EFP_Bylaws_Eng.pdf.
The Intertoto is a product of the above mentioned EFP. The aim of the UEFA Intertoto Cup, which supersedes the International Football Cup (IFC), is to offer an attractive fixture list between mid-June and the end of August. Thereby enabling the member companies of the European Football Pool to run football pools and lottery competitions.
For more information on the UEFA Intertoto Cup: see pdf document UICO1e-final.PDF.
Gambling in Swiss casinos was legally prohibited until 1993. This law was abolished by means of a referendum as part of the reorganisation of the federal budget. In April 2000 a new Federal Law on Games of Chance and Casinos (Bundesgesetz über Glücksspiele und Spielbanken, 1998) came into effect that permits casino gambling with unlimited stakes for the first time since 1921. The fact that the former law remained in force for so long is partly the result of the democratic structures which makes any change in the Federal Constitution a long and wearisome business. Another reason may be that Switzerland is such a small country, and there are so many possibilities for gambling in the neighbouring countries of Germany, Italy, Austria and France. In 1993, however, over twenty casinos in Switzerland opened with a reduced maximum stake of approximately three dollars and this meant that the gambling facilities consisted almost exclusively of slot machines.
As of April 1st, 2000, casinos can now be run only with a concession granted by a newly established federal agency. The law is specified by the Federal Casino Decree (Bundesrätliche Spielbankenverordnung) and was ratified by the federal government on February 23, 2000. In the corresponding decree, detailed guidelines specify the conditions under which gambling in Switzerland may take place.
According to the Swiss legislative process this law was made possible by a referendum in 1993; three-quarters of the electorate voted in favour of re-establishing casinos with high stakes (a 1920 referendum disallowed gambling in casinos where it had been allowed before 1921). In 1920 55% of the population supported the closing of casinos. This change in voting behaviour between the 1920s and the 1990s reflects a general trend in market economies to emphasise individual liberties and decision making which has also affected attitudes toward other public health policies (e.g., alcohol policy).
The Federal Act on Casinos serves 3 purposes
The FAC distinguishes between games of skill (games where winning involves some skill of the player) and games of luck (games where winning predominantly depends on coincidence and requires a certain bet). While the regulation of the former is left to the Swiss Cantons, the regulation of the latter is subject to the FAC. Games of luck may only be offered by licensed casino operators. The operation of games of luck over the Internet is not allowed. The law governing the Swiss lottery remains untouched by the FAC.
As far as the license to operate a casino is concerned, the FAC distinguishes between large casinos requiring a type A license ("Grand Casinos") and small casinos requiring a type B license ("Kursäle"). The distinction is not based on the physical size of the casino, but rather on the type of games which are offered. Because the FAC requires geographical diversity as to the location of the casinos, a casino operator must obtain two separate licenses - one to locate a casino in a specific region and another to operate the casino.
Unique is that the casino managements must prove, by means of a social concept, that they will do everything in their power to combat the harmful effects of gambling. Furthermore, there will be restrictive conditions and official checks with regard to money laundering. In addition to economic and administrative information each casino applying for a concession has to submit a fully developed 'social concept' that includes detailed prevention measures for dealing with people with gambling problems, staff training and evaluation research, which an independent advisory board will control.
In the fall of 2001 the first casino concessions were granted based on the quality of each applicant's overall proposal. The new legislation is creating a unique situation in Switzerland. To reduce the potential harm for gamblers that is associated with new forms of gambling, the legislation should be standardised and continuously optimised. These new measures require evaluation and government control.
Until the Federal Law on Games of Chance and Casinos came into effect, the maximum stake in gambling had been limited to CHF five per game. Slot machine gambling had different cantonal (state) laws that controlled the management of the amusement arcades (facilities with only machines) and small casinos. This led to a total banishment of gambling in some cantons (e.g., Zurich) while a relatively high number of machines were distributed to small casinos, amusement arcades and public places such as bars and restaurants in other cantons (e.g., Ticino). Additionally, many grand casinos in France, Italy, Austria and Germany are situated alongside the Swiss border.
Gambling via telecommunications, especially Internet, is forbidden. In Switzerland, however, there are no models for prosecution in case of violation, nor does the law or the decree provide any. On April 1, 2005 the operation of all games of chance amusement machines run by persons or legal entities that have not been granted a concession will be stopped.
Taxation will be regulated as follows: Casinos of Type A pay 40% of their revenues up to CHF 20 million, and for each additional million the taxation rises by 0.5%. Casinos of Type B pay 40% of their revenues up to CHF 10 million, and for each additional million the taxation rises by 1%. The plan is to evenly distribute the concessions across Switzerland. Type A casinos will only be permitted within a catchment area of a million people or more. Overall, the intended result is to have about two to six Type A casinos and 15 to 20 Type B casinosall over Switzerland.