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Sportingbet pays its way out of US trouble


REGULATION S


portingbet is the latest firm to enter into a Non-Prosecution


Agreement with the United States Department of Justice. Under the terms of the agreement, the US authorities will not seek to prosecute Sportingbet, or any of its subsidiaries, for activities related to Sport- ingbet’s internet gambling business with customers in the US from 1998 to 2006. As part of the agreement Sportingbet has agreed to pay a total of US$33m (£21.3m), payable in three instalments: $15m (£9.7m) payable on or before 30 September 2010; $12m (£7.7m) on or before 30 September 2011 and $6m (£3.9m) on or before 31 March 2012. Furthermore, Sporting- bet has agreed to co- operate with the


authorities and disclose information relating to Sportingbet’s former inter- net gambling business in the US and adhere to certain further obligations from the date of the agree- ment with respect to its future conduct in the US. As part of the agree- ment, Sportingbet has acknowledged and accepted certain details regarding its former busi- ness activities in the US which are set out in the Statement of Facts which form part of the agreement. Commenting on the


SPORTINGBET CHAIRMAN PETER DICKS WITH TOTTENHAM MANAGER HARRY REDKNAPP


developments, group CEO Andrew McIver said: “This settlement enables Sport- ingbet to draw a line under events of the past. It is in the best interests of our shareholders and we can now look to the future with increased confidence.” McIver concluded: “The


process has been complex and has taken a consider- able amount of time. Throughout these discus- sions the board has remained mindful of its obli- gations to all stakeholders of the group. The resolution of any risk associated with Sportingbet’s former US- facing business, combined with the considerable actions taken by the group over the past three years, ensure that the group is well placed to capitalise on the many opportunities available in the global online gaming industry.” The announcement of the deal preceded the news that Sportingbet has pulled its operations out of France as the plc looks to


avoid directly contravening local laws. It was the arrest of Sportingbet chairman Peter Dicks in New York in 2006 which ultimately fore- shadowed the passing of the UIGEA later in the year. Dicks narrowly avoided extradition to Louisiana and resigned from his role at the bookmaker, although he has since returned to the fold. In fact, Dicks was around to announce Sportingbet’s new partnership with Tot- tenham Hotspur. The new four-year deal will see Sportingbet.com become the club’s official gaming partner with a brand pres- ence at White Hart Lane and within the club’s com- munications channels. He commented: “We’re busy working with the com- mercial team at White Hart Lane to create new offer- ings that will produce bene- fits for both the club and its fans this season and are looking forward to a suc- cessful season in the Premier League.”


WHEN TEAMS SUCH AS AC MILAN PLAY IN GERMANY THEY MUST DO SO WITHOUT THEIR SHIRT SPONSORS BWIN OR FALL FOUL OF THE INTERSTATE TREATY


ECJ rules against German gambling


In a move that will most likely force wholesale changes to current laws regarding internet gambling, sportsbooks and lotteries in Germany, the European Union’s top court has found that the country’s betting restrictions contravene EU law. James Walker reports


EUROPE F


ollowing months of debate, the European Court of Justice (ECJ) has found that


German rules which grant a state-supervised monopoly on sports betting and lotter- ies violate European Union law. The court said the rules for the German state betting monopolies were not con- sistent and systemic enough to uphold the argument that restrictions served to protect the public from gam- bling addiction.


The judgement given by the ECJ states - with what some industry observers


2 BettingBusinessInteractive -Á


have labelled an ‘unex- pected clarity’ - that the basic provisions of the German state treaty on gam- bling are not in compliance with the fundamental free- doms of the internal market as provided for in EU law. In particular, while German authorities have justified betting monopo- lies by saying that they help protect consumers from the negative effects of gam- bling, the court stressed that ‘the holders of public monopolies carry out inten- sive advertising campaigns with a view to maximise profit from lotteries thereby


OCTOBER 2010


departing from the objec- tives justifying their exis- tence’.


Germany’s controversial 2008 Interstate Gambling Treaty maintained state monopolies over lotteries and sports betting games until at least January 2012 and also introduced a ban on most forms of online gaming. In a series of recent cases involving other EU countries, the court had found such restrictions on competition to be justified on ‘social’ grounds. However, in addition to the extensive advertising campaigns conducted by


ANALYSIS


The ECJ rulings come at a time of intense political debate in Germany and other European countries on the existing gaming legislation. Sigrid Ligné suggests that this ruling should cause rumblings further afield than Germany. “More and more stakeholders are raising concerns with regard to the efficiency of a ban on online gaming and are calling on the government to overturn the interstate treaty,” she said. “Their arguments will be bolstered by [the] ruling. When it comes to consumer protection, the prohibition of online gaming makes no sense. Online gaming and betting is a popular leisure activity for millions of people. Neither a total ban nor a state monopoly are suitable to meet the aim of protecting consumers.”


the gaming monoliths, the court also noted that while betting at race tracks has been in commercial hands since the 1920s, slot machines - which experts say pose more of a threat to problem gamblers - can be


operated by anyone running a business.


According to Munich- based law firm Hambach and Hambach, the decision means that the discussion regarding a new legal frame- work for lotteries and games


of chance must be resumed immediately, with the German government being obliged to present a lawful draft regulation which takes into consideration the deci- sion by the ECJ and provides for a liberalisation of the


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