|
 |
 |
|
Welcome to the News desk.
|
 |
|
 |
PartyGaming closes French website |
28/02/2007 |
|
 |
Simon Bowers
Wednesday February 28, 2007
PartyGaming, the online gambling group, quietly closed its website to
French customers last Friday without telling investors, the Guardian has
learned. Just three days later one of the firm's largest shareholders sold 123
million shares.
Rival 888 Holdings and others are also believed to have
frozen efforts to target the French market. Meanwhile, authorities in Paris
have requested interviews with executives from an estimated 20 companies - said
not to include PartyGaming - over the legality of their marketing activities in
France.
PartyGaming, which reports its full-year results tomorrow,
refused to comment on its reasons for the move.
The toughening French
stance raises the prospect of a co-ordinated crackdown on offshore-licensed
gambling groups similar to that launched by the US department of justice last
year.
France's position appears to be at odds with European competition
rules on gambling, which many offshore operators hope will be strengthened next
week with publication of a landmark judgment from the European court of
justice. But industry insiders are wary that France has stepped up
lobbying efforts in Brussels, fearing that open competition - particularly from
online firms based in offshore tax havens - could destroy the PMU French
monopoly on which domestic horse racing relies for funding.
One
industry source estimated that France could generate between 5% and 10% of
PartyGaming's continuing revenues following the closure of its US business last
autumn. Another suggested France must contribute less than 5% to revenues or
PartyGaming would have been forced to make a stock market announcement. The
company was one of the first online operators to provide betting services via a
French language website. Last summer it acquired sports betting site
Gamebookers, a well-established brand in France. Industry insiders said
PartyGaming's French business had been viewed as having huge potential for
growth.
The company's closure to French customers came on the day
letters were received by online operators requesting executives attend
interviews in France. Those contacted are believed to include Unibet, which has
targeted the French market through its Mr Bookmaker business. The letters
invite executives for interview, but the authorities are understood to have
made clear an alternative approach might be to issue arrest warrants.
Last September the founders of Bwin, Manfred Bonder and Norbert
Teufelberger, were arrested by the French authorities at a press conference
they had called to publicise a shirt sponsorship deal with AC Monaco. They were
bailed days later but told they could face up to three years in jail if found
to have contravened laws on gambling advertising.
Afterwards, French
football league officials placed a ban on online gambling firms offering shirt
sponsorship. As a result, AC Monaco was forced to drop its shirt deal with
Bwin. Similar tie-ups linking 888 with the Toulouse team and Gamebookers with
Nantes were also dissolved.
London-listed 888 Holdings confirmed
Guardian reports that non-executive John Anderson, who was chief executive of
the business until the end of December, had received a request from the French
authorities.
Mr Anderson is expected to attend a meeting on March 13 to
put the company's case. Industry insiders were concerned to see inquiries
extending beyond sports betting - which 888 does not offer - to online poker or
casino games.
PartyGaming insisted no letter requesting an interview
had been received. Nevertheless its shares fell 9.4% yesterday. It is unclear
which PartyGaming shareholder was behind Monday's share placing but the company
must announce it this week. The only investors with such large holdings are the
firm's four founders - Vikrant Bhargava, Anurag Dikshit, Ruth Parasol and her
husband Russ DeLeon - as well as Fidelity and the Bermuda and London-based
hedge fund Orbis. It is understood not to be Ms Parasol or Mr DeLeon.
|
 |
 |
|
 |

 |