Switzerland’s Controlled Online Industry Faces First Controversy

The controlled online casino industry in Switzerland is not even a year old and it already has its first controversy about payment processing.

On Wednesday, Swiss media reported that some customers of two locally licenced online casinos that funded their online accounts via PostFinance – SwissPost’s financial services unit – had woken up to the discovery that their PostFinance account balance was dramatically lower than the previous night, some at the tune of “several tens of thousands of francs.”

The gamblers concerned were customers of Jackpots.ch and Casino777.ch online casino sites, both of which are operated by Stadtcasino Baden Group and were among the first sites to launch into the country’s new regulated online gambling market. PostFinance is considered a socially responsible payment option with Swiss online casinos, as it is impossible to overdraw accounts.

A software update at PostFinance on March 17 appears to have meant that customers who transferred sums from PostFinance to online casinos saw their money deposited into the casino accounts without being debited from their PostFinance accounts. Reportedly, the technical hiccup lasted until late May.

When PostFinance adjusted the account balances of these customers to reflect on online casino transfers, customers who did not keep meticulous records of their financial activity only learned of the problem on June 8. These accounts were left with a negative balance in some cases, which caused PostFinance to lock the accounts, causing some customers to be unable to pay other bills.

While stressing that the problem was not his company’s doing, Detlef Brose, CEO of Grand Casino Baden, announced that the sites “will reimburse all game losses related to subsequent bookings made more than 30 days ago.” That leaves customers on the hook for any post-May 10 transfer to the gambling account.

PostFinance is less generous and only offers to work out a repayment plan with customers whose balance is now in the negative. The blunder is said to have impacted more than 1,000 customers.

Seven online casino licences have been issued in Switzerland so far, although not all eligible sites have launched. The two Stadtcasino Baden sites produced combined revenue of CHF7.6 m (US$ 8 m) by the end of 2019 and helped partially offset the loss of land-based revenue after all casinos were forced to shut down by mid-March due to COVID-19 by the government. Earlier this month, the casinos were allowed to open again.