French Gambling Law

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On Friday 15 September 2006 Manfred Bodner and Norbert Teufelberger, joint CEO's of the online betting company BWIN were detained by French authorities in Monaco on charges of violating France's internet gaming laws. The pair were released on Monday 18 September on bail of €300,000 each and placed under investigation, a preliminary step that could lead to a trial and a possible three year prison sentence.

In a press conference held in Vienna on 21st September, BWIN's lawyer, Thomas Talos, said that the pair had been subjected to "human rights violations." Moreover, he called the action taken by the French state against them as constituting "a crass violation of Community Law."

Subsequent to the arrest of the BWIN pair, the French Government announced that in future it would be taking a tougher stance against any online gambling company that illegally advertises its services to French citizens.

The French Budget Minister, Jean-Francois Cope stated that new measures, which would be attached to a bill aimed at dealing with childhood delinquency, would raise the fine for illegal advertising from £3000 to around five times the cost of the advertising investment.

"Nous avons décidé de renforcer les sanctions financières contre la publicité pour des offres (de jeux, ndlr) illégales. Ce sera prévu dans le cadre de la loi de prévention de la délinquance. L'objectif est que la sanction aille "jusqu'à cinq fois le montant de l'investissement publicitaire", en général "de l'ordre de 300.000 euros", alors qu'actuellement la sanction pour ce type de publicité "est de 4.500 euros, a-t-il précisé."

In March 2005 Pari Mutuel Urbain threatened to take a number of online bookmakers, including Sportingbet, Bet and Win and Mr Bookmaker (now Unibet) to court for violating French gambling law. A spokesperson for the PMU, Francoise Toussaint, was quoted at the time as saying;

"These bookmakers are breaking the law of 1891. What they are doing is illegal. We are launching legal proceedings against them...They have recently launched French internet sites on which they offer odds on a range of French sporting events, including horse races and football matches."

In July 8 2005, the Maltese online bookmaker Zeturf was ordered by le tribunal de grande instance de Paris to stop accepting bets on French horse racing. The company filed an appeal against the interim order on July 22, and, on September 9 lodged a complaint against France and the PMU with the EU Commission.

On 4 January 2006, however, the Appeal Court of Paris, once more found in favour of the Groupment d'Internet Economique Pari Mutuel Urbain (PMU), and accordingly it increased the fine imposed on Zeturf for non-compliance to €50,000 (Lm21,500) per day.

On 29 September 2006 the French Professional Football League (La Ligue de football professionnel) announced that it had banned its clubs from advertising any form of gambling on their shirts or in their stadiums. BWIN currently sponsor Monaco, 888 recently struck a two year shirt sponsorship deal with Toulouse, whilst Gamebookers owned by PartyGaming have a similar deal with Nantes.

On 27 February 2007, 888 PLC issued the following statement to the London Stock Exchange;

"888 is aware of potential press speculation with regard to its French activities.888 confirms that its non-executive director and former Chief Executive Officer, John Anderson, has been asked to attend an interview with the French authorities. 888 is in consultation with its legal advisers with regards to this inquiry and further announcements will be made in due course if appropriate."

A notable feature of the French gambling market has been the refusal of the French Government to allow land based casino operators, such as Groupe Partouche, Groupe Lucien Barriere and Moloflor Loisors to lauch online products, whilst giving the green light to the state owned Francaise des Jeux to do so.

This seemingly inequitable decision has led to a syndicate of said casinos, Syndicat des Casinos Modernes, to file a complaint with the European Commission against "La Francaise des Jeux" on the grounds that the company is guilty of abusing a dominant market position. In a seperate development, one of the onland casinos, Groupe Partouche, has also recently launced a mobile casino based offshore.

Article 87 (1) of the EU Treaty stipulates;

"Save as otherwise provided in this Treaty, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.

The European Court of Justice has also ruled that any measure that confers on an enterprise an economic or financial advantage that it would not otherwise enjoy, must be deemed to be state aid.

In a recent interview with the Financial Times, Christophe Blanchard-Dignac, chief executive of Francaise des Jeux, put forward three notions to justify his company's monopoly position. Firstly, he said that FDJ does not sponsor football clubs, viewing such as representing a conflict of interest (Since the end of the summer of 2001, La Française des Jeux and Loto Foot have been partners with France Télévision in a football programme Foot 3.). Second, the FDJ website imposes a weekly maximum (€500) on France Nationals, something that most of the illegal sports betting websites do not do. Thirdly, there is no overlap as regards the products being offered by the PMU, the FDU and the online casinos, thus minimising as best as possible gambling activity. BM

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