Bwin in Long-Running Feud over Turkish License

9 September 2008

Bwin Interactive Entertainment has confirmed it is trying to recover 2.25 million euros it suspects it was defrauded of during an attempt to obtain a sports betting license in Turkey last year.

By way of background, the license the Vienna operator sought was not for Iddaa, Turkey's state-administered sports betting game; that 10-year license was awarded recently to the game's incumbent operator, Inteltek, a joint venture between Greece's Intralot S.A. and Turkcell, a Turkish mobile phone operator.

Kevin O'Neal, Press Officer with Bwin, explained to IGamingNews by telephone Tuesday that the security consulting group Bwin was working with in Turkey claimed it was able to connect with the Ministry of Sport to obtain an Internet betting license.

Following what the company believed were successful negotiations with the government, it transferred the funds -- 2.25 million euros -- to an escrow account; in return, however, it received a license not in accordance with the original agreement.

Mr. O'Neal said that the money was not -- and has yet to be -- returned. Currently, he said, the investigations and court proceedings are ongoing.

Because the legal proceedings are ongoing, however, Mr. O'Neal could not comment on the specifics of the case other than to the say that the company was doing "everything in its power to recover shareholder funds."

Turkey, a jurisdiction protected by strict anti-gambling laws that threaten perpetrators of illegal Internet gambling with prison time and hefty, daily fines, is served directly by a small number of I-gaming operators -- among them Sportingbet and Betsson -- that do not have government licenses but argue their services are nonetheless legal.

Still others, including Betfair, Ladbrokes and Unibet, maintain Turkish-language Web sites targeting Turkish expatriates, exclusively.

For its part, Bwin withdrew from Turkey in March 2007 after the government enacted anti-Internet-gambling legislation in February 2008 but does maintain a Turkish-language version of its Web site.

"Do we remain interested in this market? Yes, of course we do," Mr. O'Neal said. "It's a 70-million-person market. We know they have a strong affinity for sports betting, and they're good at it. And given the right economic conditions, we would of course be interested in a license for this market."

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.