Online gambling was controversially banned in the US in
September of this year when a bill was attached to a port security
law and passed quickly through the legislature.
The effect on online gambling companies was dramatic, with share
prices dipping instantly and some fearing for their existence.
PartyGaming and 888, for example, are said to be considering a
merger in order to stay in business.
A European trend towards banning online gambling could hit
companies further. Already two German states have acted and others
may follow.
The heads of the individual German states met today to discuss a
ban and decided to put off the decision. Already three German
states, Bavaria, Saxony and Hesse, have instituted their own ban.
Most of the states run monopoly lotteries and are keen to protect
their position, said German paper Handelsblatt.
The European Commission is fighting to open up and liberalise
the European gambling market but faces opposition from local and
national governments who want to preserve their lottery and
gambling monopolies.
The three south German states who have outlawed online gambling
were doing so because they ruled that an Austrian company, Bwin
Interactive, infringed their monopoly. Bwin welcomed today's
move.
“This decision is a very sensible one,” said Steffen
Pfennigwerth, owner of Bwin in Germany, a 50% joint venture with
Austria's Bwin Interactive.
“The states will now have sufficient time to develop a legal
framework for the German betting market in accordance with European
law and the constitution," said Pfennigwerth.
Bwin was also involved in controversy in France when its two
chief executives were arrested. Manfred Bodner and Norbert
Teufelberger are jointly chief executive of Bwin Interactive
Entertainment, the Austrian firm behind Betandwin, and appeared
before a French judge in September accused of violating France's
gaming laws.
The lawyer for the pair said that the action was "objectionable"
and that it was commercially motivated. French company La Francaise
de Jeux (FDJ) operates a sports betting and lottery monopoly. The
company is 72% owned by the French state.
"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," said the pair's
lawyer Frederic Manin.
OUT-LAW revealed in September that the arrest of the men
followed a complaint by the company to Europe that France's gaming
laws conflicted with the open competition principles of the EC
Treaty. Should Europe find that to be the case it would likely
apply to all countries, including Germany, if it changes its
gambling laws.
