Switzerland Next In Line To Gamble With Net Blocking

The Swiss Parliament this week adopted new legislation to regulate offline and online gambling by limiting it to a fixed number of Swiss-based operators only. While heavily criticised by opponents inside and outside the Parliament in Bern, the main goal was to harvest revenue streams for the general public and enforce a number of obligation. A number of opponents in the Parliament sided with activists in their call for caution against the ‘slippery slope’ of net filtering. A look at other countries illustrates that filtering on an IP or domain name basis is on the rise.

The new Swiss legislation will for the first time legalize online gambling, but will limit it to those operators who hold a valid licence from the Swiss authorities for their terrestrial business. “He that has plenty shall have more,” Green Party member Sibil Arslan said in summarising the new Swiss gambling law.

Keeping Control of Gamblers

The Green Liberal Party and the far-right Swiss People’s Party (SVP) members warned against what they described as protectionist design and limitation to internet freedom. The legislation will limit the number of concessions for gambling and betting providers in the country in general and exclude everybody without a licence from offering online gambling too. Green Liberal Party member Beat Flach called for more “future proof legislation” and an acknowledgement of digital globalisation. SVP party member Lukas Reimann tried to lure the Swiss politicians with the money: “You would have more revenue,” he argued.

The legislation is about a lot of money for the few licensed Swiss casino and sports betting providers – who ran hard lobby campaigns in the run-up to the decision – but also for the authorities: Chf 320 million Swiss francs from online gambling revenues is thrown into the Swiss Social Security system (AHV) annually. Another Chf 560 million from licensed sport betting is passed on to the canton authorities to pay for cultural and sports programs for the general population.

While all parties in the Swiss Parliament agree to keep this system, some offered criticism that the official draft legislation continues to exempt the Swiss gambling and betting providers from tax. In any case, the official proposal promoted fervently by Swiss Federal Councillor Simonetta Sommaruga on 1 March seeks to secure the revenues for cantons and AHV by preventing Swiss gamblers from spending their money on unlicensed online platforms outside of the country.

Just a Little Stop Sign

To enforce the new legislation, the Swiss Parliament also will decide on blocking all online gambling and betting sites except the ones licensed by the Swiss authorities.

Internet service providers will be obliged to block these sites based on IP addresses or domain names. Socialist Party Member Jean-Christoph Schwaab told Intellectual Property Watch before the vote he would opt in favour, despite a decision taken by his party in 2015 against net filtering in general.

“This is not about net blocking like in North Korea, it is just to have a warning signal for users that he is entering an illegal site,” he said.

Schwaab said he was well aware that circumvention is easy, even for somebody with little technical knowledge. “But other countries have succeeded with it,” he added. Belgium, France and other countries, for example, have been able to move high numbers of players to legal offers, he argued.

Belgium as early as 2012 obliged ISPs to block non-licensed gambling providers (the complete list is here) and had banks to block all financial transactions from the blacklisted sites. But the Belgian regulator was not satisfied with the results from these rules. He went on to criminalize and fine the players themselves, something not in the planning in Switzerland.

Slippery Slope

More and more countries evidently are taking the route to use net blocking against gamblers. On 1 January, new gambling legislation became effective in the Czech Republic and the net blocking provisions included received the approval of the Czech Constitutional Court last week. Twenty-one senators filed the constitutional complaint arguing that the net filtering constituted censorship, interfered with freedom of expression and information rights and the right to conduct business.

The Court ruled that blocking could not be likened to censorship of the internet “as systematic controlling or limiting of the disclosure of information,” the Court in Prague explained. “Instead, it is a technical measure aimed at preventing illegal activities, which must be applied so as to avoid interference with the lawful internet content.” The complainants still have to decide if they want to bring the case to the European Court of Justice.

Despite these reassurances, even amidst the always composed and calm Swiss members of parliament, there is concern about a slippery slope.

“There is already now talk about using blocking for copyright violations,” Flach said in the debate in Bern. Green politician Balthasar Glättli warned: “The appetite for net blocking grows with eating.” Right-wing politician Reimann said that if the Swiss legislators blocks gambling providers, there are no good arguments to block jihadists recruiting fighters on the net. Internet censorship is beginning today with this legislation, he warned.

Examples do exist. French authorities in 2016 ordered the blocking of 2700 websites, Interior Minister Bruno Le Roux revealed during a recent cybersecurity conference. Some 834 websites had to be blocked by ISPs, and 1,929 had to be taken out of search engine lists, in the effort to fight “child pornographic and terrorist content,” Le Roux said according to a report by AP.

A complex system of net blocking is in place in the United Kingdom and it covers not only gambling, but also covers topics from dating and nudity to hate or hacking. To get a lesson in overblocking a look to the “blocked” website of the Open Rights Group, a British NGO, is helpful.

Countering Network Security and Leading to Protectionist Calls

In addition to the risk of overblocking and the general error-proneness, technology experts also challenge the IP address or domain name-based filtering because it erodes efforts to better secure the network. The Swiss chapter of the Internet Society and techies from the Swiss Pirate Party warned the net blocking would question the further deployment of authentication mechanisms for domains, called DNSSEC. The technology was developed to provide security against phishing attacks.

“When as a result everybody uses Google’s DNS servers instead of those from their Swiss provider to avoid the blocking, the security measures taken by Swiss providers come to nothing,” said Bernie Hoeneisen of the Internet Society. The warning page planned by the legislator also would not work where traffic was secured with https. Instead, users will receive failure messages – and get confused.

Hoeneisen also thinks the fears that net blocking will become accepted are reasonable. “If you block unlicensed online gambling providers, hoteliers could ask why not block AirBNB and taxi operators might think, Uber could be blocked as well,” Hoeneisen considered.

Wave of Protectionism?

Flach said the idea to lock out all sorts of competitors with net blocking is dangerous and not really future proof, neither economically nor technically as the future will not be websites, but apps.

It is worth looking at the new online gambling provisions from the point of the World Trade Organization General Agreement on Trade in Services (GATS), Rolf Weber, expert in internet law at the University of Zurich, told Intellectual Property Watch. From the case which Antigua brought against the United States at the World Trade Organisation over a decade ago, some conclusions can be drawn, according to Weber.

“Net blocking normally violates the prohibition of discriminatory practices,” he said. While such violations could be defended with public order, such defences again had to be used without discriminating. While further analysis is necessary for each individual case, for the expert it is somewhat astonishing that no further cases have been brought against online gambling laws in other countries.