Argentine court rules against Bwin.party
Bwin.party faces further regulatory setback as its Argentina arm ordered to cease accepting bets at a national level.
The Federal Court of Argentina has ordered bwin.party to cease accepting bets on a national level after upholding the constitutionality of federal regulations which permit Loteria Nacional to operate a gambling monopoly in the country “ the latest in a series of regulatory setbacks that has seen the newly merged business’s share price fall below £1 in the last month.
Loteria Nacional is Argentina’s sole retail and online sports betting operator, however provincial authorities are permitted to issue intra-province licences for companies to operate within their borders.
Bwin Argentina obtained a licence from the Provincial Institute of Lotteries and Casinos (IPLyC) in 2007 to operate in the province of Misiones, but has since used that licence to accept bets and promote its online offering nationwide.
Loteria Nacional protested to the federal court in 2008, claiming Bwin Argentina was illegally accepting bets from outside Misiones’ borders. Federal courts upheld Loteria Nacional’s claims and ordered foreign operators to block any bets from outside the province of Misiones, but while several other companies, including Victor Chandler, shut down operations, Bwin appealed and continued to operate. The case had been on-going until last week.
As gambling is prohibited without permission from each state lottery or equivalent body, the court ruled that Bwin Argentina was operating illegally. It dismissed the operator’s arguments that use of the internet meant players were “virtually travelling” to the province of Misiones, and that blocking the right to offer bets across borders was “denying freedom of expression”. The Federal Court of Argentina ordered Bwin and the IPLyC to pay all legal costs.
Bwin has appealed the decision and the case remains “ongoing”, according to a bwin.party spokesman. The Americas contribute 6% of the company’s net gaming revenues, according to bwin.party’s latest annual report.
A spokesperson for Loteria Nacional said in a statement: “These efforts will strengthen the capacities of the national state as central actor in the administration of gambling, through professional management, efficient, transparent and socially responsible.”
Last week’s news is the latest in a series of regulatory setbacks for bwin.party that has suffered recent legal defeats in Portugal and Belgium.
In January a Portuguese court found the operator’s activities in the country to be illegal and ordered it to stop all advertising and sponsorship deals in the country.
In Germany, a market which provides over a fifth of bwin.party’s revenues, it was among the first seven private operators to be awarded a licence Schleswig-Holstein. However the breakaway state announced last month that it is to abolish its own online gambling laws in favour of rejoining the country’s controversial Interstate Gambling Treaty.
Germany this month opened the tender process for its 20 sports betting licences to be issued under its controversial Interstate Gambling Treaty, with licensees given until September 4 to submit the necessary paperwork in German to the Interior Ministry of the state of Hesse.
Meanwhile in Spain bwin.party was forced to pay 33.6m in back taxes before applying for a licence in the country.
Such setbacks have led to bwin.party’s share price drop to below £1 in recent weeks. Having been above £1.30 in June it fell to a 52-week low on 8 August of 91.90p.