November 19, 2012
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The heads of 12 online gambling companies have publicly dressed down the European Commission for its perceived inability to stand up to countries like Belgium and Greece, whose gaming regulations the firms believe to be incompatible with European Union law. In a letter published by the Financial Times, the chief executives of bet365, Betclic Everest, Betsson, Gamesys, Sportingbet, Stan James, Victor Chandler, Winamax, William Hill, 32Red and 888 insist that ?the time for polite rhetoric is now over? and urge the EC to ?enforce compliance with the European treaty and do so swiftly.? In October, the EC published a long-awaited report on the continent?s online gambling business, which offered many recommendations but promised little in the way of enforcement to ensure countries abided by those recommendations.
Also signing the FT letter were Bwin.party co-CEOs Jim Ryan and Norbert Teufelberger. During a visit to Belgium last week, Teufelberger was detained for questioning by local authorities over Bwin?s disregard of orders to stop serving Belgian punters without a license. That incident was cited in the FT letter as an effort to ?intimidate? operators, but Belgian authorities claimed Bwin.party had ignored their request for Teufelberger to report voluntarily for an interview during his trip to Belgium, leaving them no choice but to opt for more forceful tactics.
YOU?RE NOT PARANOID WHEN EVERYONE?S OUT TO GET YOU
Bwin?s reputation as a rogue operator was enhanced last week when the company?s online betting license in Argentina was revoked by the authorities for what they claimed were breaches of its contract. Bwin held an online gambling license issued in 2007 by the Argentine province of Misiones, but was ordered in 2008 to confine its online activities within that province to avoid infringing on the Loteria Nacional?s country-wide monopoly on sports betting. That ruling was upheld this summer by the country?s Federal Court, which also ordered Bwin to cover the associated court costs.
Last week, Misiones? Provincial Institute of Lotteries and Casinos (IPLyC) issued a statement that it was revoking the licenses of Bwin and local operator Mil Jugadas SRL for ?breaches of contract,? including the failure to retain a ?mirror? of bets on an IPLyC server to help the regulator monitor wagering activity for signs of problem gambling. The IPLyC said the companies ?were given the necessary time? to explain this failure, but ?as they have not given satisfactory answers,? the IPLyC had no choice but to pull the plug. The regulator also complained that Bwin?s site continued to display the IPLyC logo despite being served with a legal order to remove the logo three months ago.
As in Belgium, Bwin is disputing the statement of the regulator, saying it independently decided not to renew its Misiones license ?for commercial reasons only.? Bwin.party spokesman John Shepherd told GambingCompliance discussions with the Misiones regulator over the cost of maintaining Bwin?s license had not gone well, leaving Bwin no choice but to pull out. Translation: you can?t fire me, because I quit.
Shepherd justified the fact that the company?s Argentine-facing site was still currently operational because a shutdown has to be done ?in an orderly fashion; you just can?t flick a switch.? Sounding very much like the fox who lost his tail in Aesop?s Fables, Shepherd rubbished the impact pulling out of Argentina?s ?tiny market? would have on Bwin?s fortunes, which must explain why the company had been racking up the legal bills over the past four years in a bid to preserve its Argentine business.
BWINNING HEARTS AND MINDS IN NEVADA
This recent spate of headlines regarding Bwin?s inability to play nice with regulators is unlikely to aid Bwin.party?s pursuit of a Nevada online poker license, the application for which state regulators are expected to consider early next year. The fact that Bwin took wagers from Americans prior to passage of the UIGEA is also an unresolved concern. As with Argentina, Bwin execs have claimed that the volume of business they did with America was insignificant, but that?s another way of saying they were only a little bit pregnant. And while PartyGaming paid $105m to the US Department of Justice to wash away its US-facing sins, the Bwin half of Bwin.party has yet to reach such a deal. Might have been a smarter move to take all those Argentina-related legal fees and cut the DoJ a check, but hey? it?s only shareholder money, after all.
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