Authorising online gambling is not only a difficult process in Germany. Liechtenstein also has its own peculiarities when it comes to dealing with the issue. Gambling has been legal there for some time and is an important part of the economy. However, online gambling will not be allowed for at least another four years.

Gambling was legalised in Liechtenstein in 2010. Over the years, the small country has become a real hotspot for casinos in Europe. The turnover generated by the local casinos is enormous. Anyone who thinks that online casinos are also doing well in the Principality is mistaken.

Despite the success of the brick-and-mortar casinos and the obvious interest in such games in Liechtenstein and neighbouring countries, Liechtenstein has decided not to issue any licences for online gambling for the time being. This was discussed at the last government meeting in 2023.

Gambling in Liechtenstein curbed by government

Gambling is booming in the small principality between Switzerland and Austria. Since legalisation and the opening of the first casinos, the business has expanded massively. With a population of no more than 38,000, Liechtenstein now has the highest density of casinos in Europe. There are now a total of seven casinos:

  1. Casino Schaanwald Liechtenstein
  2. Casino Admiral Triesen
  3. Grand Casino Liechtenstein
  4. Castle Casino Vaduz
  5. Casino Eschen
  6. Casino Ruggel
  7. Plaza Casino Liechtenstein

In recent years, there have been repeated reports that the development of the Liechtenstein government is "not comfortable". Residents were also concerned about their country's reputation, according to an article in the German newspaper Süddeutsche Zeitung. Higher taxes, stricter requirements for staff training and an expansion of player protection regulations have not made things easy for casino operators.

Another sign of this is the now extended moratorium on online gambling until 2028, which means that no licences will be issued until at least then. Local casinos licensed in the Principality will also not be allowed to go online with popular games.

The government's central hopes for this approach were outlined in a statement in the Liechtenstein newspaper Vaterland, which has been quoted by several media outlets in this context:

These measures are expected to lead to further market consolidation. In view of the still dynamic development of terrestrial gambling in Liechtenstein and the developments in the Swiss online gambling market, the Government will continue to refrain from granting online gambling licences. It has decided to temporarily suspend the processing of applications for online gaming licences until the end of 2028".

In addition, the Liechtenstein government announced an agreement with Switzerland to exchange information on problem gamblers. This is intended to ensure "effective cross-border protection of players" and is expected to come into force in 2024.

Even the acceptance of local casinos was up for debate in 2023

Liechtenstein's casinos and gaming houses have been a huge success over the past decade. However, the Principality's government is also doing its utmost to curb the growth of such gambling establishments. In fact, a ban on new casino licences was decided in 2022.

A referendum was then held in 2023 to ask the people whether casinos should be banned altogether by 2028. A whopping 70 per cent of eligible voters cast their ballots. The decision to keep casinos was clear. 73.3 per cent of people were against a total ban.

Such an exclusion would have had an immense negative impact on the economy. The people of Liechtenstein are (understandably) happy to overlook the controversy surrounding the potentially harmful aspects of gambling in terms of gambling addiction or their country's reputation.

Liechtenstein's main casinos generate huge revenues

Publications from recent years suggest that Liechtenstein's two largest casinos together generate an annual turnover of at least 53 million Swiss francs. These reliable figures are from 2019 - before the pandemic. However, various sources - including the Liechtensteiner Vaterland - have reported that profits have soared again. In previous years, the talk was of a whopping 82 million and more across all venues. Overall, a significant increase can be expected.

A report by the ministry states that there are many reasons for the high income - but the large catchment area is the main factor. The 2019 report specifically states: "The reasons for the rapid growth are manifold. The two casinos attract players from Bad Ragaz, St. Gallen and Bregenz. The customer- and business-friendly legislation has also contributed to the success. Market research carried out by the casinos has also shown that the catchment area of the casinos in Liechtenstein is much larger than expected".
The two highest-grossing casinos near the Swiss and Austrian borders alone pay more than 20 million Swiss francs in taxes and licence fees each year. Despite all the good intentions, the state certainly does not want to miss out on this revenue.

Conclusion

Gambling, and casinos in particular, are a real phenomenon in Liechtenstein. With such success, it is surprising at first glance that the online market is still being ignored. On closer inspection, however, it becomes clear that online offerings licensed in Liechtenstein are likely to be used legally only by Liechtenstein residents. However, since a very large proportion of the gambling customers who generate such high tax revenues for the country in the brick-and-mortar casinos appear to come from abroad, the online business may not be sufficiently profitable. It remains to be seen whether online casinos will finally be able to obtain a licence in the Principality in 2028. The government's restrictive approach is unlikely to give supporters much hope.

Image source: https://pixabay.com/de/photos/international-fahne-flagge-2694624/

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