16 November 2007

Two more refferals to the ECJ from the Administrative Court of Giessen

by Martin Arendts, M.B.L.-HSG

The Administrative Court of Giessen (Verwaltungsgericht Gießen) has reffered two more sports betting cases (interdiction orders against betting shops, tranferring bets to private bookmarks licensed in another EU member state) to the European Court of Justice (ECJ) according to Article 234 EC Treaty. Earlier this year, the court already reffered a similar case to the ECJ (Markus Stoß v Wetteraukreis; Case C-316/07).

The two new cases have been filed as:

Avalon Service-Online-Dienste GmbH v Wetteraukreis (Case C-409/07) and

Olaf Amadeus Wilhelm Happel v Wetteraukreis (Case C-410/07).

Now, seven German sports betting cases are pending before the ECJ (one from Cologne, three each from Stuttgart and Giessen). As the Administrative Courts of Giessen and Stuttgart asked quite similar questions, it is quite likely that the ECJ will join these cases. A decision will probably be announcend in two or three years.

The Administrative Court of Giessen asked the ECJ following questions:

Are Articles 43 and 49 EC to be interpreted as precluding a national monopoly on certain gaming, such as sports betting, where there is no consistent and systematic policy to limit gaming in the Member State concerned as a whole, in particular because the operators which have been granted a licence within that Member State encourage participation in other gaming - such as State-run lotteries and casino games - and, moreover, other games with the same or a higher suspected potential danger of addiction - such as betting on certain sporting events (e.g. horse racing) and slot machines - may be provided by private service providers?

Are Articles 43 and 49 EC to be interpreted as meaning that authorisations to operate sports betting, granted by State bodies specifically designated for that purpose by the Member States, which are not restricted to the particular national territory, entitle the holder of the authorisation and third parties appointed by it to make and implement offers to conclude contracts also in other Member States without any additional national authorisations being required?

09 November 2007

Settlement agreement with sellers of Ongame frees bwin from payment of purchase price of EUR 79.9 million including interest

ad-hoc-release of bwin

In connection with the bwin Games transaction (formerly Ongame Group), bwin and the sellers agreed on a deferred consideration with a potential value of EUR 83.0 million including interest as of settlement date.

The introduction of the so-called "Safe Port Act", which also contained several provi-sions of the "Unlawful Internet Gambling Enforcement Act of 2006", effectively prohibited payment transactions in connection with online gaming in the United States. In response to this law, bwin suspended its real-money gaming operations for US customers in the autumn of 2006.

In spring this year, bwin entered into negotiations with the former majority shareholders of bwin Games, who sold 96.3% of the company's shares. bwin has now reached agreement with this group of sellers to the effect that they will waive the purchase price owed amounting to EUR 79.9 million including interest. bwin also intends to enter into talks with the other sellers with respect to the remaining amount of the deferred consideration of EUR 3.1 million.

In return for waiving this claim, this group of sellers will receive 28.89% of the net gaming revenues generated with US customers over a period of five years should bwin reintroduce real-money gaming products for US customers, albeit capped to EUR 79.9 million. Net gaming revenues are defined as the balance of betting stakes and customer winnings less all expenses, such as marketing costs, taxes and duties, commissions to third-party software providers for gaming applications and payment transaction costs, including chargebacks by US customers. Furthermore, the buyers will be released from all remaining lock-up obligations on the sale of the bwin shares which they received as part of the purchase price.

This agreement fully settles the bwin Games transaction with this group of sellers.