Liechtenstein is a small sovereign state in Western Europe bordering Switzerland and Austria. Until 2010, the gambling business in the principality was considered illegal, since since 1949 a law banning gambling was in force. The only permitted gambling entertainment in the country was the Internationale Lotterie in Liechtenstein Stiftung, which has been operating on the Internet since 1995. The ILLF operated many lottery sites, each of which donated a percentage of the proceeds to charities. However, in 2011 the lottery went bankrupt and ceased operations.
In 2010, parliament passed a new law – Geldspielgesetz (GSG), which allows gambling for money, as well as the operation of official casinos in the country. The new law was developed based on the Swiss experience. The government considered that the legalization of gambling will bring new jobs to Liechtenstein citizens, additional tax deductions will go to the treasury, and the principality will increase the number of tourists.
This bill came into force in 2011, but to this day, not a single land-based casino has been opened on the territory of the state. True, in 2012 there was an attempt to issue a concession for the operation of the Vaduzerhof AG casino. But the project was curtailed due to the fact that another contender for the concession, Admiral AG, filed a complaint in connection with the refusal received. The litigation lasted for about a year. As a result, the government decided to revise the hastily adopted rules on gambling. In October 2016, amendments came into force aimed at regulating the licensing system for gambling establishments.
As of May 2017, there are two major casinos that are interested in entering the Liechtenstein market, Admiral Casinos AG and Casinos Austria AG. They have already applied for a license and will soon find out the decision of the Office of Economic Affairs (Amt für Volkswirtschaft). Analysts claim that Liechtenstein’s new casinos will be able to compete with the nearest Swiss casinos, since here the tax rate will be significantly lower (from 12.5% to 40%) than in neighboring Switzerland (52.13%).
As far as online gambling is concerned, it is not allowed. However, the country has not yet registered any of its own online casinos. But players from Liechtenstein are free to visit the websites of foreign operators. Such sites are not blocked or prohibited by law.
Liechtenstein’s gambling laws
There were many attempts to legalize the gambling business in Liechtenstein. The first occurred back in 1968, when the country faced severe financial difficulties. However, Prince Johann paid off all the debts out of his own pocket, since he did not want the presence of gambling in the principality. Since then, for many years, there have been constant discussions on this issue, but all attempts to legalize the gambling industry have not been crowned with success. It wasn’t until 2010 that the government passed the Gambling Act (Geldspielgesetz), which came into force in 2011. According to this law, gambling means any games for money in which the winnings are determined randomly. These include:
- games of skill. This category includes entertainment, the result of which depends in whole or in part on the skill and skill of the player. As a rule, they are held in casinos (poker, blackjack, etc.);
- bookmaker rates;
- slot machines;
- gaming tournament in the casino;
- online gambling.
Liechtenstein’s gambling law is intended to:
- ensuring the regime of safe, orderly and transparent gambling business;
- protecting customers and third parties in the field of gambling operations from money laundering, organized crime and terrorist financing through game providers;
- prevention of socially harmful consequences of gambling operations.
Under this law, all government revenues from the gambling industry must be donated to various charitable projects and events.
It is prohibited to take part in gambling to persons:
- under the age of 18;
- who have independently applied for blocking gambling for themselves in order to protect themselves from gambling addiction;
- who are members of institutions, officers of supervisory bodies, and members of the Advisory Board;
- to which coercive measures were taken in accordance with the law on the implementation of international sanctions.
The following persons are subject to restrictions on playing in a casino:
- members of institutions and employees of casinos;
- shareholders owning more than 5% of the stake in the casino;
- members of subsidiaries of companies involved in the production or sale of game objects.
Regulators of the Liechtenstein gambling industry
The main regulator of the gambling industry in the Principality of Liechtenstein is the Office of Economic Affairs (Amt für Volkswirtschaft). This body is subordinate to the Ministry of Internal Affairs, Justice and Economy. It is the Office of Economic Affairs that decides on the issuance of a license or concession for the provision of services in the field of gambling.
The supervision and enforcement of the gambling law is carried out by:
- The Office of Economic Affairs;
Conditions for obtaining a license in the gambling jurisdiction of Liechtenstein
Every operator wishing to organize a casino in the country is required to obtain a concession from the government. There is no legal right to award a concession. The government has the right to limit the number of permits for gambling business.
A casino concession can only be granted if:
- the applicant, not later than within two months from the date of granting the concession, divided the share capital into registered shares;
- the applicant, main business partners, shareholders and persons entitled to dispose of the property of the company, have sufficient personal funds, a good reputation and guarantees for the impeccable conduct of business;
- the applicant, the owners of the shares and the main partners have proven the legitimate origin of the funds available at the request of the government;
- independence from external management, transparency, as well as monitoring of gambling activities and funds are ensured through charters, organizations, contractual obligations, internal regulations and quality management systems;
- the plaintiff guarantees safety, due diligence and social integrity;
- the applicant provides performance calculations that show that the company is economically viable;
- the plaintiff stated in a written report the economic advantages of the casino;
- the applicant has a corresponding internal institution.
To obtain a concession, the operator must apply to the Office of Economic Affairs. The government decides on her extradition. If the number of applications submitted exceeds the planned number of state concessions, then the government makes a decision based on the quality of the applications in order to optimally fulfill the purpose of this gambling law.
Typically, a gambling license is valid for 20 years. If it is justified by special circumstances, the government can provide a shorter or longer period of its validity. Also, the concession can be extended or renewed. However, it is not transferable.
The concessionaire must notify the Office of Economic Affairs:
- without delay and no later than four weeks after significant changes in conditions licensing (criminal case or conviction, bankruptcy, procedure for revoking or suspending concessions);
- timely before legal force: on the transfer of shares in a concentration of more than 5% of the capital or the transfer of voting rights to one person; an increase or decrease in the share; on the conclusion of agreements with major business partners.
The state collects taxes on gross income from gambling business in accordance with the following provisions:
- in a casino – not less than 12.5% and not more than 40%;
- in lottery and betting – not less than 10% and not more than 20%;
- for online gambling – not less than 5% and not more than 12.5%.
Online gambling in Liechtenstein
Online gambling is allowed in Liechtenstein. According to the law, the organizer of online games must publish on the home web page:
- your name and address;
- the date of the concession agreement;
- an indication that it is a legitimate money game;
- an indication that minors are prohibited from playing.
Before the start of the game, the organizer must request the following information from the player:
- name and address, including email address;
- date of birth;
- bank account or credit card details with the owner’s name and address.
Currently, there are no online casinos registered in Liechtenstein, but local players can freely visit the websites of foreign operators. They have more than 100 online casino sites that accept bets in Euros and Swiss Francs. As a rule, such sites have an interface in German.
The most popular slot machines in Liechtenstein
Liechtenstein players visit the sites of various foreign virtual casinos and play slots from manufacturers such as: IGT, Greentube, WMS, Playtech, NetEnt, etc. It is difficult to single out specific machines that players give special preference to. But, of course, they are familiar with such top games:
- Book of Ra;
- Sizzling Hot;
- Lucky Lady’s Charm;
- Zeus III;
- Pompeii etc.
Prospects for the development of the gambling business in Liechtenstein
Despite the fact that the gambling business in Liechtenstein has been officially allowed since 2011, not a single land-based and online casino has been established in the country. But in the near future, two operators will receive permission from the government to open their casinos. The names of the companies applying for the concession are known – they are Admiral Casinos AG and Casinos Austria AG. Operators have already decided on the site of their casinos, and also developed a plan for its construction.
In the future, the Liechtenstein gambling business is waiting for transformation. Since tax collections are relatively low here, many companies will want to enter the country’s market. And this, in turn, will contribute to the rapid development of this industry and the attraction of additional revenues to the budget.