Pursuit Of Online Gambling Exec's New Trend?

Published: Sunday, September 24, 2006 Online-Casinos.com

IS PURSUING INDIVIDUAL EXECUTIVES THE NEW TREND IN ANTI-ONLINE GAMBLING TACTICS?

Not-so-veiled threats from the Germans

First it was the Carruthers arrest by US authorities, followed by the detention of British businessman Peter Dicks in New York and more recently the apprehension of Austrian Bwin online gaming chiefs who were on a visit to France (see previous Online-Casinos.com/InfoPowa reports).

Now German authorities are threatening to arrest British executives of online gambling companies if they set foot in the country.

It all points to a disturbing new tactical trend being used by various national law enforcement agencies in trying to hamper trans-border online sportsbook activities. And although this is unlikely to be an international 'conspiracy' by law enforcements operating in concert, it has all the hallmarks of agencies copy-catting what they see as successful strategies being used elsewhere to intimidate and hamstring businesses that compete with national gambling monopolies.

This week, officials from the interior ministries of the German states of Hesse and Bavaria told UK publication 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 have also adopted 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.

"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."

A number of big-name UK-based online betting companies allow German residents to make wagers. 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.

Germany, Europe's most populous country, has a gambling market estimated at Euro 29 billion, well below the Euro 78 billion in betting turnover in the UK last year. German state-run betting companies took wagers of Euro 8.1billion last year, and just over Euro 500 million were sports wagers. The impact of Bwin and others in the market has been felt by German state governments. Turnover at Oddset, Germany's official sports betting office, has fallen 20 percent since 2002.

The hope of many online operators rests in several European Commission investigations into the activities of countries that seek to maintain their gambling monopolies at the expense of EU-domiciled online competitors.