Wednesday, September 20, 2006

France was likely to face a legal challenge from the European Commission
over its restrictions on gambling operators, Brussels said on Tuesday,
warning it could target Paris as early as next month in a broader sweep
against national governments. The threat was made following last week's
arrest in France of two senior executives of Bwin, an Austrian online sports
betting operator. The French authorities claim Bwin has violated French
gaming law, which bans private sports betting businesses from operating in
the country. Brussels said on Tuesday that it was likely to launch a number
of new cases against countries that impose illegal restrictions on gambling
operators. Earlier this year, Charlie McCreevy, the EU internal market
commissioner, opened infringement procedures against seven member states,
including Germany, Italy and Sweden. His spokesman said on Tuesday: "We
continue to receive complaints and commissioner McCreevy intends to proceed
with these cases and initiate additional cases against other member states,
including France."

On the Bwin arrests, he warned that criminal sanctions against individual
executives that were based on laws against illegal gambling could in
themselves be "problematic" from the Commission's point of view.

Under EU law, governments have the right to place restrictions on gambling
and sports betting operators, but they must be "non-discriminatory,
proportionate and consistent". Mr McCreevy's spokesman said: "It is not
acceptable to limit the freedom to provide betting services on account of
protecting consumers and at the same time allow mono-poly holders to
advertise betting services."

Bwin resumed trading on the Austrian stock exchange yesterday after its
executives were released on bail on Monday night. Its shares fell by a third
but in afternoon trading it recovered some of its lost ground to be down
about 16 per cent.

Bwin said it expected a decision by the end of the year on whether Manfred
Bodner and Norbert Teufelberger, the two Bwin executives, would face
cri-minal charges. It has been instructed by the French investigating
magistrate to put a notice on its website informing visitors in the next few
weeks that online betting could be in breach of French gaming laws.

The company is also under pressure in Germany, its biggest market, where
authorities are trying to revoke its gambling licence.