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German crackdown raises the stakes for internet gambling
By Eric Culp In Frankfurt And Pierre Tran In Paris
24 September 2006BRITISH executives of online gambling companies could be arrested on criminal charges in Germany if they set foot in the country.
Officials from the interior ministries of the German states of Hesse and Bavaria told The Business that executives of foreign companies who let German residents place sports bets online are committing “criminal” acts that could lead to prosecution in Germany.
Germany’s threat to foreign managers follows the recent arrests in the US and France of executives from offshore gambling firms.
French state gambling officials also plan to adopt a tougher stand: officials told The Business that they will continue to report offences by foreign betting operators to the government, raising the possibility of more arrests of executives at offshore gambling firms.
Attempting to enforce their monopoly on sports gambling, Hesse, Bavaria and Saxony ordered Austrian online betting company Bwin to stop advertising and offering betting services in their states. The ban “goes for everyone else, too,” a spokesman for the Hesse interior ministry in Wiesbaden told The Business.
Bwin has become the highest profile target in the German crackdown on gambling which has also seen the forced closure of privately run betting shops around the country.
But executives from any company offering online sports betting in Germany should be concerned about prosecution.
“I would take these threats seriously,” says Michael Adams from Hamburg University, an expert on gambling in Germany. He advised such managers to steer clear of the country. “I wouldn’t take a layover in Frankfurt.”
In France, Bwin’s co-chief executives were released on bonds of E300,000 ($370,000, £205,000) apiece last week after their arrests as part of an investigation into the company’s French operations. The executives are expected to return to France for more questioning in November.
The arrests stemmed from complaints filed last year by French state-run betting agencies Francaise des Jeux (FdJ) and and Pari Mutuel Urbain (PMU). Under French law, FdJ holds the monopoly for lotteries; PMU controls off-track gambling and casinos for slot machines
FdJ says that as a public operator working under a state mandate, it is obligated to report illegal activities to the authorities. It contends that the debate is not over monopolies, but about public policy and the future of gambling.
Paris shows little willingness to engage in a policy debate and is pushing forward with a crackdown on internet gambling. French Budget Minister Jean-Francois Coppé says the government will hand out hefty fines against illegal bookmakers.
A number of UK-based online betting companies allow German residents to make wagers.
The Business opened an account and placed a bet from a German address last Thursday with BetFred.com in Warrington. A BetFred spokesman said he was unaware of the situation, but if German authorities were planning to prosecute British online sports betting companies, “then we’d have to stop”.
Sportingbet, whose chairman Peter Dicks was arrested in the US earlier this month, takes bets from Germany and even offers clients there a toll-free service line. When asked if the company had many German customers, a worker said: “We sure do.”
Ladbrokes says it has not accepted wagers from Germany since 2003 due to legal concerns, and the website of bookie William Hill also refuses to serve German-based punters.
Ladbrokes spokesman Robin Hutchison said the German stance on online betting is against European Union free trade provisions, and the current row could help clarify the legality of state-run monopolies. “The Bwin situation will force the EU’s hand,” he said.
One Ladbrokes customer told The Business that Ladbrokes was well aware that his bets originated from Germany. “They know where I’m calling from,” said the punter, adding that all his betting transactions are done via a British-based bank.
Gambling is excluded from the Bolkestein directive on free circulation of services in the EU and is also absent from the e-commerce directive drafted in 2000.
French and German government officials claim they need oversight for all forms of gaming to minimise gambling addiction and money laundering as well collect taxes on betting profits.
This is a very bad trend. It’s one thing for the US to be asserting themselves, but now France and Germany. Hmm, when does the UK take a stand?
God Save The Queen and may Prince Charles rule forever says I.
:woohoo:
This is likely to open up a Europen quagmire.
I hope Britain keeps a stiff upper lip and starts asserting itself.
As Britian is a reluctant particiapant in EU politics it can hardly assert itself.
However, both Germany and France are in breach of EU protectionist rules that state while they can object to gambling (or any business) on moral or ethical grounds …
… they cannot do so while offering local companies the opportunity.
I expect the EU to eventually sort it out – but it is taking time to go through the usual legal processes especially with multiple governments involved.
Definately NOT a good trend. I wonder where the Netherlands stands on all this? They are a generally liberal nation, but they are EU members, No?
I would say we wont be having a “Captoberfest” any time soon, pity because there is some great German Biers!
I wonder what Bryan Bailey’s take is on all this? Is he concerned that he and Voltran might get a visit from der Europäisches Polizeiamt?
Nope, won’t happen, is another sportsbetting targeted thing.
Is same climate as in US, really, except I know of no state laws about this in Germany. All federal.
The Netherlands dont allow advertising for online gambling neither,like France and Germany.
But indeed its against the EU laws.
Hope it will turn out better in a few years.
No arrests here yet
The government only ordered me to remove a few websites with .nl TLDelgoog wrote:The Netherlands dont allow advertising for online gambling neither,like France and Germany.
But indeed its against the EU laws.
Hope it will turn out better in a few years.
No arrests here yet
The government only ordered me to remove a few websites with .nl TLDWould you have been allowed to sell your .nl websites/domains
to foreigners ?
no
they are sure they will win any legal issue when it is a .nl
they didnt touch my .com and .be yetelgoog wrote:nothey are sure they will win any legal issue when it is a .nl
they didnt touch my .com and .be yetI don’t think they will ever be able to touch your .com.
That would be crazy.
:banger:
