Posted 2/24/11 : Spanish gambling giant launches jurisdictional litigation
The lawyers are busy in Spain, according to local media reports, preparing a case for the Spanish gambling group Codere, which appears to be defending its turf against other EU companies.
The reports claim that Codere is about to launch litigation in a Madrid court against Austrian internet gambling group Bwin and La Liga football club Real Madrid.
The case has its roots in marketing, specifically the aggressive advertising being run in Spain by Real Madrid and sponsor Bwin. Codere is reportedly claiming that these initiatives are illegal in terms of the Unfair Competition Law – Law 31/1991 – because Bwin and the famous football club are advertising games of chance and that this practice “…has not been previously authorised by the responsible Authority or made subject to any statutory condition, neither is it protected by European Union cross-border laws”.
The Codere legal team explained this week that authorised gambling operators in Spain are not permitted to advertise or may only do so subject to stringent restrictions…. and then only after obtaining authorisation from the competent Authority.
They claim that Spanish-authorised operators have the capability to offer internet gambling but are constrained from doing so by local law; this means that they are unable to compete on a level playing field with offshore companies like Bwin, and that consequently Bwin's advertising constitutes an unfair advantage.
“We are living through a situation like blood letting because Bwin operates from a tax haven without paying gambling taxes or duties,” said the company. “The existence of unfair competition is obvious."
This unfair competition, resulting from the use of an illegal practice, is affecting the gambling sector in Spain, which accounts for 1 percent of Spanish GDP and generates over 100,000 direct jobs, a spokesman claimed.
Consequently, Bwin should be prevented from advertising, even to the extent of terminating its sponsorship of Real Madrid.
Codere has also indicated that it is considering further legal action along similar lines against other foreign companies from EU jurisidctions. possible targets – and this is speculation based on known competitors from the EU involved in the Spanish market – could include: Victor Chandler, Bet-at-home, Paf, 12bet, Unibet and Interwetten.
The national Spanish government is currently at final draft stage in the introduction of new and more liberal gambling laws, under which it is proposed that sports sponsorships signed prior to January 1 this year will be deemed legal.
However, the present regulatory system grants autonomy to provinces like Madrid, with which Bwin has licensing for retail sports betting.
The Spanish gambling group Codere is no pushover; it operates in Europe and Latin America and manages over 53,000 gaming machines, 127 bingo halls, 415 sports betting points, 13 land casinos and 3 racetracks. It has developed online gambling capability for countries like Italy where licenses can be obtained from the local appropriate authority.