Senior directors of free enterprise Internet gambling operators should avoid the United States, France and Germany, for arrests may await the traveling top management in these three countries.
Europe is so different from the United States because each member state is constrained by European law. All member states made an agreement with the European Union: "If goods, services, people and money are to move around freely within the single market, there must be rules to ensure fair competition."
These rules are laid down in the EC Treaty. For example, the Treaty prohibits any business agreements "which have as their object or effect the prevention, restriction or distortion of competition within the common market" (Article 81). The Treaty also prohibits "any abuse by one or more undertakings of a dominant position within the common market" (Article 82).
The European Commission plays a key role in making sure that these rules are obeyed. It can impose penalties on any firm or EU country that breaks them. Such is the Commission's power in this area that it can actually ban an operation agreed upon among companies outside the European Union if the operation could affect the single market. The Commission also monitors "state aid" (i.e. help given to companies by EU governments).
How nice, those European treaties.
But at the same time Martin Arendts, the German lawyer specialized in gambling matters, has heard rumors that there is a pact between the United States, France and Germany.
"Yes, indeed, we have heard rumors that the USA, France and Germany have co-coordinated their actions against private bookmakers (allegedly at the last G 8 meeting), but we don't have any hard facts at the moment," Arendts explains. "However, it seems at least feasible that the defenders of the state monopoly are trying to scare CEOs. In Germany, even normal employees of a betting agency were recently put to trial (and convicted in the first instance). So I would advise CEOs of private bookmakers not to travel to France or Germany at the moment.
"The German authorities are, indeed, still arguing that the cross-border provision of sports betting within the European Union is a criminal offense. Most politicians want to uphold the monopoly at any price. However, some have now opted for a liberalization of the market, e.g. the Liberals (FDP) and the CDU Schleswig-Holstein.
"We hope that the Placanica decision might bring some clarity at least. We have called the ECJ again last week. Unfortunately, there is no date set yet when the decision will be delivered. Apart from that, they won’t be allowed to tell us, if they would know (but they really don't know it).
"From my point of view, also the upcoming advisory opinion of the EFTA Court may help. We are trying to bring similar questions to the ECJ."
The European Betting Association (EBA), representing leading European sports betting operators, would not make any recommendations on traveling by members' staffs. This must be a decision that the individual members make themselves, says Torbjörn Ihre, who handles external affairs for the EBA.
"On a very personal basis, not an expressed position of EBA, I think that it is scary that you as an individual would be forced to restrict your traveling because one state applies legislation that is in clear violation of EC law," Ihre explains. "It is also in itself astounding that one country can, de facto, restrict traveling for individuals within the EU, one of the most fundamental rights according to the EU treaty, the free movement of people. I hope you will write an article that will really stand up for one of the basic freedoms of the EU."
The Remote Gambling Association (RGA), which represents the world's largest and most well known remote gambling companies, is not offering any advice to gambling CEOs.
"We're not offering any advice on this because the situation is still far too vague, Clive Hawkswood, the RGA's chief executive, explains, "but it's clearly not the case that Europe is off limits in any way. Two dubious arrests in France and some threatening noises from certain parts of Germany don't amount to mainland Europe becoming a no-go area. And of course the other reason why Europe is so different from the U.S. is that each state is constrained by European law and in the long run that should prevail.
"Any final decision on traveling, whether it be to the U.S. or Europe, will have to be taken by each company based on its individual profile, but there is definitely no sense of panic within the industry. As you know, probably the biggest of the remote gambling conferences on this side of the Atlantic is the EIG which is being held in Barcelona next month and I can’t believe that anyone has changed their plans to attend simply because of the arrest of the two Bwin CEO’s in France."
Until a few months ago, Italy was also a warm promoter of the monopoly system, but a more liberal policy is one threshold away.
Ernesto Apa of the law firm Portolano Colella Cavallo says of the dangers are for the gambling entrepreneurs in Italy, "The executives of online gambling companies may enjoy a journey in Italy without the risk of being arrested."
Apa added, "Although Italian law forbids the unauthorized organization and management of betting and prize based pay-per-play games (whether based on skill, on chance or a combination of both), and the breach of this ban is a crime, interim measures restricting personal freedom could not be applied to these crimes.
"This is due to the fact that the Italian law provides interim measures restricting personal freedom only for crimes with hard sanctions. In fact, pursuant to the Italian Code of Criminal Procedure, before a definitive judgment is issued, (i) the imprisonment is allowed only for crimes with a maximum sanction of 4 years imprisonment or more, (ii) the prohibition of expatriation applies to crime with more than three years imprisonment as maximum sanction, etc.
"Sanctions set forth by Section 4 of the law no. 401 of 1989 for the unauthorized organization and management of betting and by law decree no. 269 of 2003 for unauthorized organization and management of prize based pay-per-play games do not allow the application of the above said interim measures."
As far as Apa knows, no Italian prosecutors focus only on terrestrial gambling providers or on intermediaries (such as those in Gambelli case).
So, unless the executive has been already convicted by an Italian court with a definitive judgment or has committed some other crime, under Italian law he could not be restricted.
According to Juan Barrachina, Unibet's country manager and the president of AEDAPI (the Spanish Internet sports betting association), Spain is a free market in which managers can go on business or private trips. And that should be good news for all the visitors of the European Interactive Gaming Congress 2006 (EiG 2006), which will be held in Barcelona October 11-13.