Money laundering fears delay casino licensing

Licence distribution for casinos will be a long process Keystone Archive

The Swiss government has laid out a plan for the approval of licenses for casinos and gambling houses in Switzerland, but strict guidelines about the origin of investments and the transparency of operations are likely to slow down the process.

This content was published on January 24, 2001 - 18:58

So far, the government has received 63 applications for gaming licenses, but it appears less than half satisfy the conditions required.

The Swiss justice minister, Ruth Metzler, said on Wednesday she hoped the first few licenses could be granted by May, but admitted that the process of reviewing the applications had been difficult.

"It won't be a pain free business," said Metzler, "and it is possible that some parts of Switzerland will not be granted gaming licenses at all."

The Swiss government is above all keen to ensure that future casinos operate in a completely legal and independent manner. Swiss voters approved making gambling houses legal in 1993, and since then various committees have been examining the rules under which casinos should be licensed to operate.

"Applicants for licenses must satisfy a whole series of conditions, and those conditions are strict," said Benno Schneider, president of the federal gaming commission.

"Applicants must enjoy a good reputation, they must have a proper business plan, and they must prove that they have the capital to start such a business," said Schneider.

Furthermore, anyone applying to run a casino must be prepared to give exact details of where the start up capital to open the business originally came from. This condition appears to have been the biggest stumbling block for many of the 63 applicants.

"We have run into problems here," said Schneider, "many applicants showed a typically Swiss reluctance to reveal the origins of their money."

The reason for the strict regulations is the Swiss government's fear that some casinos could be used for money-laundering purposes, especially if they run into financial difficulties in their first few years of operation.

"We know from looking at casinos in other countries that those which are not profitable are open to abuse, for example money-laundering," said Schneider.

In recent years the Swiss government has tried hard to improve Switzerland's reputation regarding money laundering, by introducing new legislation requiring banks to check more closely the origin of new investments.

Schneider said that because of the large sums of money exchanged at casinos, the government expected them to satisfy the same transparency criteria as the banks.

As a result, and despite the high hopes of the many applicants for gaming licenses, there will not many casinos in Switzerland in the near future. The government had hoped to approve up to 25 licenses by the end of this year, but Justice Minister Ruth Metzler admitted this may not now be possible.

"Our new casinos must be economically viable, and they must attract customers, including tourists," said Metzler.

"If the applicants can't do that, and they can't answer our questions about their business plans, then they won't get a license. If that means parts of Switzerland do not have casinos, then that's the way it has to be."

by Imogen Foulkes

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