Manfred Bodner and Norbert Teufelberger, co-CEOs of Austria-based Internet gambling company bwin, were detained by French authorities today for alleged violation of domestic betting laws.
Trading of the company's shares on the Vienna Stock Exchange was suspended, but not before their value absorbed a 3.9 percent blow, down 1.05 euros to 25.65 euros. The loss cut the company's value to 835.4 million euros ($1.1 billion). Other companies in Europe took a hit as well; shares of industry rivals PartyGaming Plc and 888 Holdings Plc dropped 8.6 percent and 5.5 percent respectively on the London Stock Exchange.
Adding to bwin's woes, Bavaria today became the third German state (following Saxony and Hesse) in the span of six weeks to ban the company from accepting sports wagers.
"The two biggest European markets, Germany and France, have moved from a passive attitude on online gaming to a hostile, active attitude," Michael Schatzschneider, a Frankfurt-based analyst at Commerzbank AG, said.
Further, a source at the Paris-based unit that ordered the detention of the two executives indicated that their apprehension is part of an ongoing initiative to prevent Net gaming companies from operating in France.
The source, reportedly working in the legal section of the betting and gaming unit of the French "Renseignements Généraux," said that French authorities would "do their utmost to prevent any other private operators from operating in the French market."
The source also speculated that Partouche and Berriêre, two of the largest land-based French casino groups, may have been involved in pressuring law enforcement into apprehending Bodner and Teufelberger, after French gaming and gambling authorities recently denied permission to both operations to launch online versions of their casino products.
bwin is the third Net gambling company in the last three months to have high-ranking members detained by law enforcement officials while abroad. Former Sportingbet Non-Executive Chairman Peter Dicks was arrested last week in New Yorka on charges of illegal computer gambling, and David Carruthers, former CEO of BetonSports, was arrested in July in Texas on charges of racketeering, fraud and money laundering.
Bodner and Teufelberger will be questioned by French authorities on Saturday, and according to bwin spokeswoman Karin Dlein, a hearing has been scheduled in Nice. The co-chief executives were apprehended while publicizing an agreement with French soccer team AS Monaco.
Klein said the company expects Bodner and Teufelberger to be released no later than tomorrow.
Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.