Facts

Multiple organisation of illegal gambling outside licensed casinos: Statute of limitations, prosecution principle, assessment of facts and sentencing

Parties and procedural participants:

The appellants are appellant 1 (responsible for managing the premises [C.] ) and appellant 2 (owner of the premises and father of appellant 1). They are represented by Attorney Dr. Stefan Suter.

The respondents are the Public Prosecutor’s Office of the Canton of Basel-Stadt and the Swiss Casino Supervisory Authority (SCSA). The subject of the appeal is the judgment of the Appellate Court of the Canton of Basel-Stadt dated 9 December 2024 (SB.2024.2), which confirmed the judgment of the Criminal Court of Basel-Stadt dated 13 November 2023 and the penalty order of the SCSA dated 14 December 2022.

Legal bases and allegations:

  • The appellants are accused of multiple organisation of gambling outside licensed casinos within the meaning of Art. 56 para. 1 lit. a Casino Act (CasA). Gambling within the meaning of the CasA is games in which a monetary gain or other pecuniary advantage dependent wholly or predominantly on chance is at stake in return for a stake (Art. 3 para. 1 CasA). Gaming machines are devices that offer a game of chance which is essentially automatic (Art. 3 para. 2 CasA).
  • The organisation of gambling is only permitted in licensed casinos (Art. 4 para. 1 CasA).
  • The appellants are alleged to have operated several devices with gambling or gaming machines in the premises [C.] between 2016 and 2018. Appellant 1 is said to have been responsible for managing the premises, while appellant 2, as owner of the premises, is alleged to have rented them to his son with knowledge of their use and to have significantly contributed to their management.

Procedural history and decisions of the lower courts:

1. Penalty order of the SCSA dated 14 December 2022:

  • The SCSA found both appellants guilty of multiple organisation of gambling outside licensed casinos and imposed a fine of CHF 25,900 each.
  • It disposed of the items and funds seized from appellant 1 and established a compensation claim of CHF 84,918 against him. After offsetting with the funds released from seizure amounting to CHF 77,997.60, he still had to pay the Confederation a compensation claim of CHF 6,920.40.

2. Judgment of the Criminal Court of Basel-Stadt dated 13 November 2023:

  • Following the appellants’ objections to the SCSA’s penalty order, the Criminal Court of the Canton of Basel-Stadt confirmed the convictions for multiple violations of the Casino Act and the imposed fines as well as the SCSA’s decisions regarding ancillary consequences.

3. Judgment of the Appellate Court of Basel-Stadt dated 9 December 2024:

  • On appeal by the appellants, the Appellate Court of the Canton of Basel-Stadt confirmed the judgment of the Criminal Court of Basel-Stadt.

Main points of contention and appeal requests:

The appellants requested in their criminal appeal

  • The judgment of the Appellate Court of the Canton of Basel-Stadt be set aside and they be acquitted.
  • The compensation claim be dismissed and the corresponding operative part be set aside.
  • The seizure be lifted and the seized funds be returned to appellant 1.
  • Subsidiarily, the case be remitted to the lower court for reassessment.
  • No costs be awarded. The appellants be granted appropriate party compensation.

Core arguments of the appeal:

The appellants argued

1. Statute of limitations:

The appellants contended that the SCSA’s penalty order dated 14 December 2022 was not a first-instance judgment within the meaning of Art. 97 para. 3 SCC and therefore did not interrupt the statute of limitations. The lower court assumed a seven-year limitation period for the offences under Art. 56 para. 1 lit. a CasA. The first-instance judgment of the Criminal Court of the Canton of Basel-Stadt was issued on 13 November 2023. For the offences allegedly committed by the appellants on 22 September 2016 (date of seizure of several devices), the statute of limitations had therefore already expired.

2. Violation of the prosecution principle:

Appellant 2 alleged a violation of the prosecution principle. It was not clear which specific factual circumstances were the subject of the prosecution. The indictment contained no details of an individualized act of commission attributed to him, which would have made effective defence impossible. This constituted a violation of the prosecution principle as well as his right to be heard in accordance with the duty to state reasons.

3. Arbitrary assessment of facts and violation of the presumption of innocence:

The appellants challenged the lower court’s assessment of the facts and, invoking the principle “in dubio pro reo”, alleged a violation of the presumption of innocence. They criticised in particular the admissibility of the testimony of the service employee [D.] , the lack of individualisation of the acts of commission, the insufficient consideration of their objections and the arbitrary determination of the compensation claim.

4. Sentencing:

The appellants contested the sentencing and criticised the lower court for imposing fines that were manifestly excessive and arbitrary. They also objected to the lack of possibility of a suspended execution of the fines imposed for the offences.

5. Compensation claim and seizure:

Appellant 1 argued that the seizures had been unlawful, the funds should be released and not offset against the compensation claim. He also criticised the compensation claim of CHF 84,918 imposed on him. The estimate underlying the calculation of the compensation claim was arbitrary and insufficiently reasoned. The lower court’s approach violated the presumption of innocence.

Legal bases of the appeal:

The appeal was based on the following legal provisions

  • Art. 56 para. 1 lit. a CasA (organisation of illegal gambling).
  • Art. 3 CasA (definition of gambling and gaming machines).
  • Art. 4 para. 1 CasA (prohibition of offering gambling outside licensed casinos).
  • Art. 97 para. 3 SCC (interruption of the statute of limitations by a first-instance judgment).
  • Art. 325 para. 1 lit. f and g CrimPC (requirements for the indictment).
  • Art. 29 para. 2 Cst. and Art. 6 para. 1 ECHR (prosecution principle and right to a fair trial).
  • Art. 70 para. 1 and 5 SCC (forfeiture and estimation of assets).
  • Art. 71 para.
1 SCC (compensation claim for assets no longer available). **Procedural duration and suspensive effect:** The appellants criticised the lengthy duration of the proceedings of over six years (first police check on 22 September 2016 until the penalty order of the ESBK on 14 December 2022). The application for suspensive effect filed with the criminal appeal was dismissed by order of 30 January 2025. **Decision of the Federal Supreme Court:** The Federal Supreme Court considered that the appeal should be dismissed insofar as it was admissible. The court costs of CHF 3,000.-- would be imposed on the appellants in equal shares and under joint and several liability. **Title:** "Multiple organisation of illegal gambling outside licensed casinos: statute of limitations, prosecution principle, assessment of facts and sentencing\" **Facts:** **The appellants:** Appellant 1 (responsible for managing the premises [C.] ) and appellant 2 (owner of the premises and father of appellant 1) were represented by Advocate Dr. Stefan Suter. **The respondents:** The Public Prosecutor’s Office of the Canton of Basel-Stadt and the Swiss Casino Supervisory Authority (ESBK). **Facts and allegations:** The appellants are accused of having **offered several devices with gambling or gaming machines in the premises [C.] between 2016 and 2018**. Appellant 1 was responsible for managing the premises, while appellant 2, as owner of the premises, allegedly rented them to his son with knowledge of their use and significantly contributed to their management. **Procedural history:** **1. Penalty order of the ESBK of 14 December 2022:** The ESBK found both appellants guilty of multiple organisation of gambling outside licensed casinos and sentenced them to a fine of CHF 25,900.-- each. It disposed of the items and funds seized from appellant 1 and established a compensation claim against him in the amount of CHF 84,918.--. After offsetting the funds released from the seizure amounting to CHF 77,997.60, he still owed the Confederation a compensation claim of CHF 6,920.40. **2. Objection to the penalty order:** After [A.A.] and [B.A.] lodged objections to the ESBK penalty orders of 14 December 2022, the Criminal Court of the Canton of Basel-Stadt confirmed the convictions for multiple offences under the Casino Act and the imposed fines as well as the ESBK decisions regarding ancillary orders by judgment of 13 November 2023. **3. Appeal against the judgment of the Basel-Stadt Criminal Court:** Following the appeals by [A.A.] and [B.A.] , the Appellate Court of the Canton of Basel-Stadt confirmed the judgment of the Basel-Stadt Criminal Court on 9 December 2024. **Legal issues:** **1. Statute of limitations:** The appellants argued that the ESBK penalty order of 14 December 2022 was not a first-instance judgment within the meaning of Art. 97 para. 3 SCC and therefore did not exclude the expiry of the statute of limitations. The lower court assumed a seven-year statute of limitations for the offences under Art. 56 para. 1 lit. a Casino Act. The first-instance judgment of the Criminal Court of the Canton of Basel-Stadt was issued on 13 November 2023. For the offences allegedly committed by the appellants on 22 September 2016 (date of seizure of several devices), the statute of limitations had therefore already expired. The lower court considered, based on Federal Supreme Court case law, that the penalty order must – similar to a first-instance judgment – be based on a comprehensive foundation and be issued in adversarial proceedings. As a result, it was to be equated with a court judgment. The Federal Supreme Court had repeatedly reviewed and confirmed its case law that penalty or confiscation orders are to be equated with first-instance judgments for statute of limitations purposes. The defence counsel’s concerns that this practice might not be ECHR-compliant had been addressed by the Federal Supreme Court in BGE 147 IV 274 para. 1. Since the defence counsel had not raised any substantial objections to this case law, there was no reason to deviate from it in the present proceedings. **2. Violation of the prosecution principle:** Appellant 2 alleged a violation of the prosecution principle. It was not clear which specific factual circumstances were the subject of the prosecution. The indictment contained no details of an individualised act attributed to him, which meant that effective defence had not been possible. This constituted a violation of the prosecution principle as well as his right to be heard under the duty to state reasons. The lower court considered that the carefully reasoned penalty order of the ESBK essentially alleged against appellant 2 that he had made the premises of the premises [C.] – which were in his ownership and rented to his son (or his company) – available with knowledge of their intended use for the gaming machines offered there, or that he had intentionally provided his son with a gaming establishment with illegal devices, even if the ostensible purpose had been the operation of a bar. In the penalty order, the ESBK in particular addressed the substantive objection that appellant 2 had not been the licence holder of the premises [C.] during the relevant period and therefore, contrary to the contested penalty order, could not have made premises available. This sufficiently described what was alleged against the appellant to enable effective defence. There was no violation of the prosecution principle. **3. Arbitrary assessment of facts and violation of the presumption of innocence:** The appellants challenged the assessment of facts by the lower court and, relying on the principle "in dubio pro reo", alleged a violation of the presumption of innocence. They criticised in particular: - The admissibility of the statement of the service employee [D.] , who had testified without an interpreter. Her examination violated Art. 6 ECHR and Art. 68 CrimPC. There was an impression that she had been influenced. By relying on her statements, the lower court acted arbitrarily. - Appellant 1 claimed that he had only provided his guests with devices with an internet connection – and not illegal gambling. There was no substantiated response to the reasons given by the lower courts. - Appellant 1 argued that it seemed \"rather anachronistic" that coins were to trigger a gaming credit. The lower court had assumed restaurant revenue and recorded income from illegal gambling. - Appellant 1 contended that the gaming platform \"extra-bet777.com" could be operated independently by customers. Eine contractual intermediary role of appellant 1 was therefore not required. The lower court did not explain why such a contractual intermediary role would have been necessary or actually existed. In doing so, it breached its duty to state reasons and arbitrarily determined the facts. Appellant 1 claims that the entire factual presentation by the lower court was arbitrary because he would have had to pay out gambling winnings. It is completely unrealistic that an online gambling operator would accept cash payments from a third party in the form of coins or other cash. The lower court did not provide any evidence of payment transactions or contractual relationships, which is why his conviction is baseless, arbitrary and violates the presumption of innocence. Appellant 2 claims that he was merely a regular customer at the establishment [C.] . In 2014, he formally transferred the operation to his son, appellant 1. He neither held a publican’s licence for the establishment nor had any ownership function. As a customer, he had no influence on the operation. By deviating from this general rule without providing any justification or evidence, the lower court acted arbitrarily. Appellant 2 also argues that it was arbitrary for the lower court to assume “with the greatest probability” that the operation was under his management on 22 September 2016, even though the evidence clearly showed that appellant 1 was the owner of the operating company. It is arbitrary to assume that the devices inspected in 2016 had already belonged to him earlier. This constitutes a violation of the principle “in dubio pro reo”. The lower court concluded – based on the seized equipment and its evaluation, the statements of players and service staff encountered, and the findings of the ESBK – that the following evidentiary findings of the first instance were not arbitrary: Appellant 1 had taken over responsibility for the establishment [C.] from his father, appellant 2, in January 2014 and had rented the premises. The establishment [C.] was not a licensed casino within the meaning of the Casino Act. Nevertheless, gaming equipment offering games that the ESBK had classified as gambling or gaming machines within the meaning of Article 3 Casino Act in its rulings of 26 February 2014, 4 April 2014 and 24 June 2015 had been operated there. Access to the games – in particular those operated via the gaming platform “extrabet77.com” – had been granted to users exclusively through the person responsible for the establishment or its staff. Users had paid cash to the operation; in return, staff had credited the corresponding gaming chips via a tablet. The appellants and their staff had placed the bets in a separate service wallet from which they had also paid out any winnings in cash. Moreover, appellant 1 had comprehensive administrative rights: he had managed the devices, allocated them via tablets, credited gaming chips and had access to the accounting. For other devices – for example those offering games via the platform “Till eInternetKiosk” – inserting coins had released the gaming credit. Appellant 2 was the owner of the premises of the establishment [C.] . From January 2014, he had rented the establishment to his son, appellant 1, and transferred operational responsibility to him. After that, he frequently attended the establishment as a supposed regular customer and was aware of what was happening there. In fact, he was involved in the operational management. In addition, the PCs seized during the first inspection on 22 September 2016 had, according to the lower court’s factual findings, been procured and offered in the establishment under his management. When the establishment was still under his management, he had operated a total of six illegal gaming machines there with appellant 1, which the police had discovered during two inspections. For these incidents, father and son had been finally convicted. Legal considerations: 1. Statute of limitations and equal treatment of a penalty order with a first-instance judgment: The Federal Supreme Court confirmed its consistent case law, according to which a penalty order within the meaning of Article 70 ACLA is to be treated for statute of limitations purposes as equivalent to a first-instance judgment within the meaning of Article 97(3) SCC. This practice had been repeatedly reviewed and confirmed. The appellants had not presented any new arguments that the Federal Supreme Court had not already considered. There was therefore no reason to review the constant case law. The Federal Supreme Court stated that it was not apparent why a material effect such as the interruption of the statute of limitations could not be linked to a decision issued by an authority that did not meet the criteria of an independent and impartial court, as long as an appeal against this decision could be lodged with a court having full jurisdiction. In administrative criminal proceedings, compliance with Article 6 ECHR was guaranteed by Article 72(1) ACLA, which provides that the person affected by the penalty or confiscation order may request a review by a criminal court within ten days of notification. Compatibility with Article 6 ECHR resulted from the possibility of requesting a review by a criminal court meeting the required guarantees. The appellants did not address the reasoning of this case law in substance. The contradictory nature of the penalty order in administrative criminal proceedings resulted from the party and participation rights granted. However, the appellants had not…