bwin Speaks

22 September 2006

Last Friday they were taken into custody by French authorities, on Monday they were released and on Thursday they unburdened themselves to the world. bwin's Manfred Bodner and Norbert Teufelberger held a lengthy press conference yesterday expressing confusion and indignation over how their Austria-based, licensed gambling operation ran so suddenly and terribly afoul with French authorities.

Accompanying the co-CEOs were Supervisory Board Chairman Dr. Hannes Androsch, and Thomas Talos, the company’s legal representative.

Androsch began the session by underscoring the gravity of the situation. On the one hand, he was quick to accuse German and French monopolies of not complying with Article 49 of the European Commission Treaty, a provision that guarantees the free movement of services. On the other, he expressed growing concern over similar developments in Austria, namely that the actions of state monopolists risked non-compliance with the EC Treaty.

Talos echoed this concern. "It has been announced that further infringement procedures will be initiated against France, and possibly also against Austria," he said.

Bodner and Teufelberger were then given the opportunity to comment on their detainment. The co-executives repeatedly emphasized the unusual nature of their arrest and squalid conditions of their imprisonment; both were alarmed by the inconsistency they witnessed within the French legal process. Teufelberger later said that he was surprised by the European Commission's quick response, as the EC initiated proceedings against France almost immediately after the two were detained.

Talos followed their remarks with a concise evaluation of bwin's legal standing, in relation to both French and EU policy.

The conference wrapped up with an extended Q-and-A period during which the co-executives expressed that they felt "secure" in Austria after receiving a guarantee from legal officials that no proceedings would be initiated against them. Bodner and Teufelberger are due back in France in November to face charges.

IGN has transcribed portions of the press conference below and wishes to make note that the press conference has not been transcribed in its entirety and that the content of the press conference, which took place entirely in German, was taken from an English translation and may at times read awkwardly.

Androsch: The press conference will give you an opportunity to receive a firsthand report of the exceptional . . . and spectacular approach of a special troop of the French Ministry of the Interior and of the conditions that prevailed later on. I would like to underscore that the allegations against community law and EU case law are being violated.

The starting point, also in Germany, is not ambiguous at all.

You have fiscal monopolies there, and this does not comply with the competition laws of the EU and also not with the service regulation which provides for the freedom of providing services. There are specific consumer protection organizations. You see the events taking place in Germany; you have state monopolies taking action there. This is hypocrisy, no question about it.

In the meantime we also hear such voices here in Austria. You have the highly paid employees of the Austrian monopolies expressing their opinions--they are delegates at the same time in the Austrian parliament.

You have a conflict of interest taking place here, and not the guaranteeing of the high objectives of my political party.

Now, a last comment from me: We've had unexpected by necessary crisis management that worked very well. Mr. Bodner and Teufelberger bore the main brunt. They were taken into custody by in Nice by the police. I would like to express my respect to them. Over and beyond this, the team did a great job. Everything worked very well. Business was conducted very well in spite of this attempt to interrupt and intervene here. With these introductory remarks, I'd like to ask Mr. Bodner to give you a report.

Bodner: I'd like to welcome you. We are back from a very unpleasant weekend. I'm sure you know what conditions were like. You've taken it from the media coverage. It was the most difficult test for both of us in our lives. We come from well protected family conditions. We did not experience any war. We had our compulsory army service, and we did have our stay at boarding school, but this did not prepare me for the conditions I encountered here. And it was really a shocking experience, being taken out of a press conference on a Friday afternoon by secret service agents from a special department without any lawyers to support you, to undergo questioning for seven to eight hours, and then to spend your first night in a little cell measuring one by three meters on a concrete bed without water and food, with neon light, with indescribable hygienic conditions. I'll spare you the details, but I believe this cell hadn't been cleaned for months. We didn't have toilet paper. We were both sick. I started out with the flu; I had the chills that night. We didn't know what was happening to us.

In an apparently free Europe and common market, as a manager developing a company for several years, and for someone who has never been in conflict with the law, we were confronted with facts--we were accused of things that we had never heard before. We had never received a warning from France . . . so, there was no reason for us not to go to France. We are in complete harmony with European legislation and ideas. And the men we spoke with know this, because those questioning us told us that we will pass through this very soon, that we would be getting through this and surviving. It was very difficult, but we were well supported (by bwin as well as Austrian political and legal officials).

The grotesque story was: You had an examining magistrate working for the Française des Jeux who wanted to talk to us. But apparently, it was not possible to invite us because we did not have a French address. So much for the European village! It became worse and worse. . . . We came into a small cell; we had manacles.

The examining magistrate on Monday in Nanterre was very objective, he heard our position--everything was in order.

The way to the hearing on Monday could've been more civilized, in view of the legal debate, which should be open, actually.

Teufelberger: I have never experienced anything like this. . . . I've never been in conflict with law, and I'm 41 years old.

The positive about this is that the EU Commission has already reacted. And if you know how long the commission to react, then it is pretty remarkable the EC initiated proceedings against France and pointed out that the application of the law as was applied is wrong. Now, of course, it will take some time before this discussion becomes an open discussion, where you can sit down at one table with a monopolist and speak on an objective level.

Talos: As a jurist I would like to say the following about the situation: Human rights have been violated here.

Secondly, the proceedings of the French authorities were a crass violation of community law. The company has several licenses in Europe; bwin is listed on the Vienna Stock Exchange. (You also) have the freedom of the provision of services, and this is a basic tenet of the EU. You know that the action of the French authorities is not compatible with EU law.

Thirdly, the state-owned monopolies in the game of chance are not compatible with the current legislation of the EU. The state monopolies want to fill their coffers and the state’s coffers with the proceeds from the games of chance. I don’t know of any means and measures taken to prevent addicts or those prone to addiction to stop playing. This is not compatible with the EU, and the member states need to comply with the legislation.

The Q-and-A Session

Legally, what do the co-CEOs face next in France?

Talos: The investigating judge has initiated formal proceedings. He released the two CEOs on bail and he will now continue with the investigation. Now planned for November, another hearing, another questioning, will take place. After closing the investigations there will be a decision on whether main proceedings will be held before a criminal judge.

When will there be a link to French bwin site? Is it accessible?

Bodner: It is accessible, and why you could not access it, I do not know. There is no reason, not maintaining this offer. There were preliminary investigations in the frame of which it was decided how to proceed, and I think this demonstrates the appalling dimension of the exercise

Teufelberger: I think this will be sent to the judge, will be discussed with the judge, but maybe the matter is not in conformity with national legislation. I think it will go in this direction.

Have you been threatened with arrest in Austria and Germany? Are you safe there?

Teufelberger: We feel quite secure. In Austria, there was a statement by the public prosecutor that nothing will be done. Also, in Germany, this situation has been clarified, that criminal law must not be used here, because the situation is not clear. We are convinced we are in the right in the spirit of the European idea. Some national governments bring forward other arguments, and we'll have to figure out who will be victorious.

The two cases from the USA which you cited are completely different and have nothing to do with Europe, but it is obvious that the French have been incited by the course of action shown by the Americans, and I think this backfired.

What is the latest news regarding the EU Commission’s decision to initiate infringement procedures against France?

Teufelberger: Mr. Charlie McCreevy said that on Oct. 18, there will be a decision on initiation of infringement procedures. On Oct. 18, the next step will be taken regarding the procedures. We expect that all the procedures will enter the second phase.

Talos: France is supposed to be part of the agenda. It has been announced that further infringement procedures will be initiated against France, and possibly also against Austria.

This affair has resulted in your share prices dropping, and gamblers may become very insecure. Have you registered severe losses and severe drops in gambling activities? Do you think that the loss will be increasing at the weekend?

Teufelberger: The business with France was three times as high as it was before. Secondly, of course these events hamper our activities now, and we will have to rethink our marketing activities for the next quarters, and possibly we will attribute them another way. We will do something about it, but we are hampered in our budget activities.

Speaking about the consequences, I cannot give you precise figures. In 2007, we will have a better picture of the third quarter, but maybe we will shift our focus towards increasing our revenues.

  • Click here to access the press conference in its entirety

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