PUBLIC VS PRIVATE IN ONLINE GAMBLING CLASH

19 September 2006

Newspaper

INT’L HERALD TRIBUNE
By Eric Pfanner International Herald Tribune

Published: September 18, 2006

LONDON The detention of the heads of an Austrian online gambling company by French authorities has raised the stakes in a Europe-wide battle between lucrative state-sponsored betting monopolies and their upstart rivals on the Internet, raising eyebrows at the European Commission in Brussels.

The executives, Manfred Bodner and Norbert Teufelberger, were expected to appear before a court outside Paris on Tuesday morning. They were taken into custody last week as they announced a sponsorship agreement between their company, Bwin Interactive Entertainment, and AS Monaco, a soccer team that plays in the top French league….

While the detention of Bodner and Teufelberger raised the specter of U.S.- style enforcement tactics, analysts say the motivation behind the move is different. While U.S. opposition to online gambling has been partially rooted in religious and moral concerns about the dangers of wagering, European objections have stemmed largely from a desire to protect government-sponsored monopolies that generate more then €25 billion, or $31.7 billion, in annual revenue.

As of late Monday, Bodner and Teufelberger had not been charged with wrongdoing, but their detention stemmed from a complaint filed by Française des Jeux and Pari Mutuel Urbain, or PMU, the French monopoly operators of sports betting, lotteries and other forms of gambling.

“We think this is an effort to protect the French monopoly, and it is a disproportionate attempt,” said Konrad Sveceny, a spokesman for Bwin, which recently changed its name from Bet and Win Interactive Entertainment.

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….

READ THE COMPLETE STORY IN THE INTERNATIONAL HEARLD TRIBUNE

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