Two executives from bwin.party cleared of betting charges in France.
The ongoing dispute among French authorities and bwin.party over alleged infringements of the country's online gambling regulations has been going on for close to a decade now. The legal proceedings commenced about eight years ago. However, after some doubt that a resolution would ever be reached, a French court has lately determined that two executives who worked for bwin during the disputed time period are not guilty of the charges.
Bwin.party CEO Norbert Teufelberger and the company's previous co-CEO Manfred Bodner were both cleared of accusations that they infringed on France's legal gambling monopolies between 2003 and 2005. During this period, only two companies – La Francaise des Jeux (FDJ) and Pari-Mutuel Urbain (PMU) – were given authority over France's gambling industry. FDJ and PMU held that bwin infringed their exclusive rights by offering online gaming products to French citizens.
Trial Delay
Teufelberger and Bodner were originally detained in September 2006 during a press conference where they announced a partnership between bwin and AS Monaco, a French soccer club. The executives were accused of illegally providing Internet gambling services, taking bets on sporting events illegally, and advertising illegally to the French residents during the said period.
Though the charges were levied, the trial saw very little progress until July last year when a public prosecutor scheduled a hearing for September, eventually moved to April 2014. By this time, FDJ and PMU had withdrawn their complaints, though French authorities still sought penalties of €40,000 each against the accused.
Throughout the contested period, the European Court of Justice often permitted countries to restrict online gambling provided the regulations were based on concerns about problem gambling or combating other issues like money laundering. Still, the European Commission later discovered that this didn't apply in France, given that both FDJ and PMU marketed their services to French players, revealing a policy aimed more at preserving a monopoly than protecting its citizens.
Interestingly, the court case didn't seem to have any significant negative impact on the partnership between France and bwin. When France began issuing licenses to online gaming businesses in 2010, bwin was the first operator to get one.
Changes in Store for bwin.party
The favorable verdict comes at a time when the current management of bwin.party is experiencing a shakeup. Three board members - Bodner, deputy chairman Rod Perry, and audit committee chairman Helmut Kern - have been removed after Spring Owl Asset Management published a 37-page report calling for leadership changes.
Shareholder Jason Ader from Spring Owl Asset Management claimed that bwin.party had failed under its existing leadership.
"[The current board] has overseen significant shareholder value destruction, roughly a 60% decline in share price since the 2010 announcement of the merger between Bwin and PartyGaming as a result of poor execution, a failed merger, and abysmal oversight," explained the report.
Bwin.party management dismissed most of these accusations, but in-coming chairman Philip Yea has agreed to make some alterations, with three anonymous directors due to replace those departing the board.
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