The Federal Gaming Board (FGB) has called for stronger measures to prevent gamblers from playing above their means.
In its annual report, the Swiss regulatory body said the number of gambling addicts rose dramatically in 2005, with people barred from Swiss casinos up by more than a third on the previous year.
Switzerland's 19 casinos continued to hit the jackpot, posting record profits of SFr874.4 million ($702 million) in 2005 - an increase of SFr105 million over 2004, according to the FGB.
Last year more than four million punters tried their luck in one of the casinos belonging to the Swiss Casino Federation (SCF).
But the bright lights have a darker side: there are an estimated 70,000 people addicted to gambling in Switzerland.
Last year the SCF barred 13,500 people from entering its casinos - mostly encouraged by the gamblers themselves - to stop them from losing their shirts.
"In the future there may well be a massive increase in the number of gamblers barred, either due to greater gambling addiction or because the casinos do a better job," warned Benno Schneider, president of the FGB, in Bern on Monday.
In its 2005 annual report the board reprimands the casinos, accusing them of failing to provide sufficient preventive measures for gamblers, and demanding improvements to social programmes.
There are major disparities between programmes designed to help gambling addicts and several establishments have reduced budgets for these measures dramatically, stated the FGB.
The regulatory body is particularly concerned that the casinos and their staff are failing to detect gamblers who might go off the rails early enough.
It is urging better monitoring of regulars - as these are the people most at risk – drawing up profiles of gamblers in trouble and outlining the type of support casinos can offer.
More than half the money earned by the casinos ends up in the coffers of the government and cantons.
In all, SFr374 million of the casinos' gross takings in 2005 went to the federal welfare system and SFr69.3 million is headed to the cantons where the casinos are located.
Most of the money came from people trying their luck on slot machines, which generated SFr676.6 million, while the amount taken on the gambling tables fell last year by 23 per cent.
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Swiss voters agreed to lift a ban on gambling in a referendum in 1993.
The Swiss government granted the first round of concessions allowing casinos to be set up in 2001. The government awarded so-called Class A licences to seven casinos, all of which are allowed to operate with no upper limit imposed on bets.
The 18 members of the Swiss Casino Federation possess 3,223 slot machines and 233 gambling tables.
The government recently proposed to modify the law on slot machines, allowing them to be reintroduced in restaurants. However it was badly received by almost all sectors of the industry.
Swiss casino operators can be fined up to SFr500,000 for letting gamblers who have been barred from playing return to the tables.