When Regulation Costs More Than the Problem: The Questionable Logic Behind Swiss DNS Blocks
A Critical Look at ESBK, EFK and the Economics of Inefficient Gambling Control
The report by the Swiss Federal Audit Office (EFK) on the supervision of casinos and gambling shows an uncomfortable truth: Switzerland continues to rely on a system of DNS blocks and a constantly growing list of illegal gambling sites – even though these measures are easily circumvented in practice, expensive to administer, and economically hardly justifiable.
(Source: EFK Report on Casino and Gambling Supervision (PDF))
Economic Nonsense: Why Maintaining Block Lists is Expensive – and Ineffective
The EFK notes that while the number of blocking measures against foreign gambling sites is increasing, these can be easily circumvented – both by players and operators. Users employ VPNs or alternative DNS resolvers; operators switch domains rapidly.
This means specifically:
- high administrative costs
- permanent updating of block lists
- elaborate publications (e.g., in the Federal Gazette)
- technical implementations at internet service providers
… and all this with barely visible market impact.
From an economic perspective, this system makes no sense.
A list that is never complete and never effective generates costs – but saves none.
The Provocative Question: Does Regulation Cost More Than It Benefits?
When the administration itself admits that blocks "can be easily circumvented," one must ask the uncomfortable question:
Are the costs of DNS blockades and maintaining block lists higher than the savings that theoretically result from player protection and prevention?
The EFK report provides indirect evidence:
- The inspection burden is high (multiple controls per casino per year)
- IT forensics is largely absent and must be purchased externally
- Criminal proceedings take a long time due to dependencies on third parties
- Cantons must participate in controls – with their own costs
- Administrative capacity is tied to an instrument whose effectiveness is minimal
This creates the impression of a bureaucratic end in itself: A system that keeps busy but doesn't solve problems.
Conflicts of Interest? When Auditors Become Supervisors – and Vice Versa
Particularly sensitive is the close personnel interconnection between EFK and ESBK:
Leading employees of ESBK were previously employed at EFK.
This need not be staged as a scandal, but should be critically questioned:
- Does the EFK really audit an authority where former colleagues and possibly superiors sit with the necessary distance?
- Is there an incentive not to criticize one's own former work too harshly?
- Is the ESBK therefore assessed remarkably gently in the report, even though structural problems are clearly recognizable?
Instead of harsh system criticism, the report sometimes reads like a friendly performance review:
"Effective, but with optimization potential" – while simultaneously noting that DNS blocks are easily circumvented and alternatives exist.
Political Decision Rather Than Technical Necessity
The report makes it unmistakably clear: DNS blocks are not a technical imperative, but a political decision.
The Federal Office of Justice (BJ) has examined alternatives (such as other instruments against the illegal market) and comes to the – politically opportune – conclusion that blocking foreign websites is "appropriate."
But "appropriate" from which perspective?
- technically, DNS blocks are weak
- economically, they are inefficient
- preventively, they are barely measurably effective
Above all, they are one thing: visible.
One can present a growing block list, communicate numbers in press releases, and create the impression of decisive action.
Which Alternatives Would Be More Effective?
Instead of struggling with a technically questionable instrument, the state could use effective levers:
- Block payment flows: Cooperation with payment service providers to block deposits and withdrawals to illegal operators
- Expand international cooperation: Joint procedures with seat countries like Malta or Gibraltar instead of pure symbolic politics in Swiss DNS space
- Strengthen digital law enforcement: Build genuine IT forensics capabilities instead of dependence on third parties
- Risk-oriented supervision: Shift resources to where the risk potential is highest, instead of controlling all casinos at the same pace
- Prevention instead of pseudo-protection: Investments in education, counseling, and addiction prevention instead of maintaining list bureaucracy
Conclusion: A System That Protects Itself – Not the Players
The EFK report shows between the lines:
- Supervision is expensive
- Blocks are easily circumvented
- The illegal market remains unclear
- IT resources are too scarce
- Criminal proceedings take too long
- DNS blocks are a political, not a logical choice
Nevertheless, EFK and ESBK stick to the system. Criticism remains cautious, structures remain intact, budgets remain secure.
The central question remains unanswered:
Wouldn't we achieve more player protection with the same resources if we put the money from DNS blockade bureaucracy directly into prevention, counseling, and international cooperation?
As long as no one honestly answers this question, the system remains as it is:
An expensive apparatus that reliably protects above all one thing – itself.