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BWIN EXECS RELEASED (Update)
(476) (19-September-2006)
Euro 300 000 bail and some harsh words about French justice
After being held over the weekend in a jail in Nice, (see previous InfoPowa reports) Manfred Bodner and Norbert Teufelberger - co-chief executives for Austrian public company BWin - were indicted by a judge for violation of French gaming laws early this week. The men were granted bail of Euro 300 000 and allowed to leave French soil on condition that they return to face any charges.
The two executives had been detained by French authorities since Friday for "violation of French gambling laws" by "offering illegal games of chance, illegal lottery, advertising prohibited lotteries and taking illegal horse racing bets".
The complaint was filed by French state gaming monopoly La Française des Jeux and horse racing operator Pari Mutuel Urbain (PMU) in the Spring of 2005. Judicial proceedings were opened in November 2005.
The Francaise des jeux said it intended to pursue "all those who attempted to break its monopoly".
In a statement Monday, Hannes Androsch , chairman of Bwin, said: "The events in France are unprecedented in their aggressiveness. Although the European Court of Justice holds a different legal opinion and the action taken is in clear violation of EU law. Sham arguments of player protection/addiction are being put forward to maintain the monopoly as long as possible. In response, the European Commission has already started infringement proceedings against seven Member States."
Frederic Manin , a French lawyer acting for the two detained executives said: "In essence, all of this is more than objectionable. French law is incompatible with European Community law. To assert itself against the activities of a company such as Bwin in France, the French State must apply a consistent gaming policy and prove that the monopoly is the only way to protect the purposes of public order."
"If FDJ had a low profile, it might be acceptable," said Manin. "But FDJ has launched a full-fledge diversification campaign, boasts a two-digit annual growth rate and, through its Euro Million game, is reaching out to countries other than France. The interest of FDJ is solely financial. If you let FDJ grow, then other gaming companies should also be allowed into France."
"The interest of FDJ is solely financial", Manin concluded. "If you let FDJ grow, then other gaming companies should also be allowed into France."
The development is the latest in a series of legal clashes between several European Union members who run government gambling monopolies and private companies within the EU who demand the right to offer their services across EU borders. European government-sponsored monopolies are believed to generate as much as Euro 25 billion, or $31.7 billion, in annual revenue.Bwin spokesman Konrad Sveceny said: "We think this is an effort to protect the French monopoly, and it is a disproportionate attempt." He added that his company would contest any charges against the two executives right up to the European Court of Justice , if necessary.
The move has attracted the attention of the European Commission, which has been investigating the gambling monopolies of several European Union member states, following complaints that national policies discriminate against private-sector operators like Bwin.
Oliver Drewes , a spokesman for the internal market commissioner, Charlie McCreevy , declined Monday to comment specifically on the case, but warned pointedly that the commission was considering expanding an investigation of state-run gambling monopolies.
"You cannot say to Operator A, which happens to be a state monopoly making a lot of money, 'Yes, you can do this,' and then tell Operator B, which is in the private sector, that it cannot do the same thing," Drewes said.
The commission in April began infringement proceedings against seven EU countries - Denmark, Finland, Germany, Hungary, Italy, the Netherlands and Sweden - over what it sees as unfair restrictions on private-sector sports- betting operators. Drewes said it was "quite possible" that the investigation would be expanded to other kinds of betting, and to other countries. He said that the commission planned to announce next month whether it planned to take legal action against governments.
Drewes said there was no intention of "harmonising" European rules on gambling, adding that individual states were free to ban online wagers if they chose to do so. But in that case, they would have to apply any ban equally to the public and private sectors. Many government-sponsored betting businesses, like Française des Jeux, offer a broad menu of online gambling options.
Analysts say that online gambling companies have attracted about 5 percent of the global betting business, though it is hard to determine how much they have taken away from the European monopolies. Because of the growing popularity of gambling globally, the overall pot is growing, and online providers have attracted new customers, they say.
Companies like Française des Jeux, which gets less than 1 percent of its nearly Euro 9 billion in annual betting volume from the Internet, clearly see Internet as a threat. The company is 72 percent owned by the French state. A spokeswoman said the company planned to lodge complaints against other online gambling companies, though she declined to name names.
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