Facts
On the occasion of the 2006 FIFA World Cup held in Germany, Nomura Bank International PLC issued an investment product called "13.5% CHF Equity Yield Note in CHF with 1-year 'Bonus Coupon' on the FIFA World Cup". This product, distributed in Switzerland by Credit Suisse bank, had two components:
The first component invited the investor to acquire a "Note" (denomination of 1,000 CHF) until April 28, 2006. The redemption of the "Note" depended on the fluctuations of the shares of five companies sponsoring the World Cup. The second component concerned the "Bonus Coupon", which provided for an additional interest of 1 to 15% depending on the performance of the Swiss national football team.
The Department of Economy, Housing and Tourism as well as the Administrative Court of the Canton of Vaud considered that this was a prohibited bet under the Federal Act on Lotteries and Professional Bets. Nomura and Credit Suisse then appealed to the Federal Tribunal by way of an administrative law appeal.
Considerations
The Federal Tribunal dismissed the appeal. It considered that the product offered by the banks had the characteristics of a game of chance within the meaning of the Federal Act on Gambling and Casinos, insofar as the hope of gain was inextricably linked to the obligation to acquire the "Note", representing a stake, and where the chance of gain depended essentially on the results of the Swiss national football team, i.e. on a random event.
The Federal Tribunal also ruled that the product constituted a professional bet within the meaning of the Federal Act on Lotteries and Professional…