France questions online gambling executives

The joint chief executives of an Austrian online gambling company have been arrested in France. The pair will appear before a French judge this week accused of violating gaming laws in France, where gambling is a monopoly.

The order that the two executives appear before a French magistrate this week comes in the aftermath of the arrest of two British online gaming businessmen in the US. One, David Carruthers, remains in the US awaiting trial in a case being pursued by the Department of Justice. Another, Peter Dicks, has been allowed to return to the UK before heading back to the US on 28th September to face charges being pressed by the state of Louisiana.

Manfred Bodner and Norbert Teufelberger are jointly chief executive of Bwin Interactive Entertainment AG, the Austrian firm behind Betandwin. They were held for questioning as they unveiled an agreement with AS Monaco, a football team in the French league. Trading in shares in the company on the Vienna stock exchange has been suspended.

"In essence, all of this is more than objectionable," said Frederic Manin, the French lawyer acting for Bodner and Teufelberger. "French law is incompatible with European Community law. To assert itself against the activities of a company such as Bwin in France, the French State must apply a consistent gaming policy and prove that the monopoly is the only way to protect the purposes of public order."

Bwin suffered another blow when Bavaria banned it from taking wagers. It is the third German state to enact such a ban. Bavaria, Saxony and Hesse have ruled that Bwin violates state lottery monopolies on sports betting.

In France La Francaise de Jeux operates a sports betting and lottery monopoly. The company is 72% owned by the French state.

"If FDJ had a low profile, it might be acceptable," said Manin. "But 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."