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Bwin.party digital says changes are not in compliance with EU law

Written On  4/7/11 By Anthony Aperman :

The newly merged Bwin-Party Gaming conglomerate Bwin.party digital has reacted swiftly to the announcement Wednesday that Germany is to liberalise its online gambling market, albeit with severe restrictions and taxes.

The company - now the world's largest listed online gambling group - says that the German decisions impact its earnings and are not in compliance with European law.

"A proposed tax rate of 16 percent on the stakes placed in sports betting would make it impossible to offer a competitive product. Furthermore, excluding poker and casino products from this licensing model will continue to drive consumers into the black market," bwin.party chief executive Norbert Teufelberger said in a statement.

However, the company welcomed the decision of the more progressive state of Schleswig-Holstein to retain the licensing model it had already submitted to the European Union for approval.

This model provides for the regulation of all online gaming products and a tax of 20 percent of gross gaming revenue on sports betting, poker and casino, bwin.party said.

The company gave notice that it intends to apply for a licence in Schleswig-Holstein and would pay the required tax there should Schleswig-Holstein continue with its current proposals.

The statement also noted that the company looked forward to considering the necessary notification of the new State Treaty on gaming to the European Commission and ratification by state parliaments.

"We trust that these proposals will undergo the necessary corrections so that the new regulations will govern the entire German market in a coherent and consistent manner in line with EU law," said Teufelberger.

Shares in bwin.party closed down 16 percent at 166 pence on Thursday, valuing the FTSE-250 business at GBP1.7 billion.



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