Regulation of Sports Lotteries and Betting in Switzerland

Abstract

1. Introduction The regulation of lotteries, in particular, sports lotteries, and betting in Switzerland may be viewed as a classic example of how gambling, one of the strongest individualistic human passions, could be used to serve the public good. Despite a recent slight decrease in the receipts from lotteries and these revenues still remain a primary source of the financing of sport in the country. Out of 2.73 billion Swiss francs spent in 2007 in Switzerland by its residents on lotteries and sports betting in general (on average, 360 Swiss francs per resident), Swisslos and Loterie Romande, two principal lotteries and sports betting operators in the country, have transferred 523 million Swiss francs to Cantonal funds of lotteries and sport as well as to sportive associations, whereas the analogous figures for a record 2006 year were 2.8 billion Swiss francs (on average, 374 Swiss francs per resident) and 586 million Swiss francs respectively. (1) In relative figures, this means that currently the proceeds of lotteries accounts for approximately 80 per cent of the budget of the Swiss Olympics, (2) for more than half of the sports budget of the Swiss Cantons as well as for 15% of the budget of Swiss Sport Assistance. (3) Therefore, the purpose of this Chapter is to present the system of regulation of sport lotteries and betting in Switzerland and to explain how it achieves such remarkable results. There is no specific legislation on sports lotteries and betting in the country, and they are governed by legislation applicable to all types of lotteries, including sports lotteries, as well as betting. Consequently, this Chapter, first offers a brief historic overview of the creation of the general regulatory framework for lotteries and commercial betting in the country. After providing a snapshot of the current state of the market of sports lotteries and bet-ting in Switzerland and its major participants, the Chapter continues with the consecutive presentations of the existing system of state licensing and supervision of lotteries and starting in each case with the discussion of the meanings of lottery and betting, their characteristic features and distinctions from similar institutions, illustrated by decisions of the Swiss Supreme Court (Tribunal federal), the highest Court authority in the country. The Chapter concludes with the outline of proposed reforms to the existing regulatory frame-work providing, in particular, a brief overview of the draft Federal Lotteries and Betting Law of 2002, (4) and of the current state of this reform. 2. Constitutional foundations and history of lotteries and betting regulations in Switzerland 2.1. Constitutional foundations of the existing system of regulation The existing system of regulations of lotteries and commercial bet-ting in Switzerland reflects the confederative structure of the country and the distribution of the legislative competence in the area of gambling and lotteries between the Swiss Confederation and the 26 Swiss Cantons. Under the Swiss Federal Constitution of 1999, Swiss Cantons are sovereign to the extent that their sovereignty is not limited by this Constitution and exercise all rights which are not delegated to the Confederation. (5) In accordance with the Federal Constitution, the legislation on gambling and lotteries belongs to the domain of the Confederation. (6) As a result, the lotteries and betting in general, including sports lotteries and sports are regulated in Switzerland primarily on the Federal level, namely, by the Federal Lotteries and Commercial Betting Law of 1923, (7) and the Ordinance of 1924 to this Federal Law, (8) whereas the individual Cantons have adopted their respective laws, (9) regulations (10) or decrees of the cantonal government, (11) implementing the provisions of the Federal legislation. In addition to that, all 26 Cantons have ratified the Inter-Cantonal Convention on the supervision, licensing and distribution of profits from the lotteries and betting operated at the inter-Cantonal level or in the whole territory of Switzerland, which entered into effect on July 1, 2006 (CILP). …