Swede with UK betting licence held in Amsterdam for 'breaking' ancient French law

It's not every day you can say that

France found itself embroiled in the middle of yet another internet gambling controversy Tuesday, after Dutch authorities arrested the CEO of Unibet - a Swedish online gambling provider with a history of run-ins with French authorities - on an outstanding French warrant.

Authorities arrested Petter Nylander, a resident of London, at the Amsterdam airport. Authorities requested that he remain in the Netherlands until a judge could consider the French extradition request. Mr. Nylander remained defiant, and vowed to continue offering gambling services to the French market..

“We are doing nothing illegal because we have a license for Britain,” he told Dutch newspapers. “According to the European rules, if you have a license for one member state, you are authorized to use it in the others.”

Jeux avec frontières

Dominique Santacru, Mr Nylander's French lawyer, chimed in as well, ridiculing the arrest to the press. “Mr Nylander is the head of a registered business . . . and he is arrested like a common thief.”

Charlie McCreevy, the EU Internal Market Commissioner, took a bleak view of the action against Mr Nylander as well, issuing a critical statement through his spokesman.

“In our view, somebody might have been arrested who is innocent under EU law.”

France has a long history of vigorously defending its longstanding monopolies on gambling, the Française des Jeux (FDJ), which runs lotteries, and the Parimutuel Urbain (PMU), which controls the ever-protectionist horse-racing industry. The controversial laws that govern the French gambling industry date from the 19th century, and have been used against several online gambling companies that have targeted the French market.

Unibet, for whatever reason, has been a particular irritant to the French. French authorities arrested two Unibet executives last year in Monaco; prohibited the company from sponsoring cycling teams earlier this year; and even raided the French Poker Tour this summer to remove offensive, Unibet-branded poker chips. Unibet had sponsored the tournament.

Ancien Régime

Under pressure from the European Commission, France only recently agreed to consider opening its market to internet gambling firms licensed in other EU member states, and the central government seemed caught offguard by the latest contretemps.

The Budget Ministry responded to the diplomatic row that followed the arrest by announcing that it "regretted" the timing - not the arrest itself? - of Mr Nylander's arrest and hoped that the lottery and racing regulators would drop the the questionable complaints against Unibet that underlie the arrest warrant that created this mess. Unibet had rather obstinately refused to appear before a French judge investigating the claims against the company, and the warrant went out.

Whatever one thinks about Unibet's refusal to participate in the French legal process, until someone challenges the French legislation at the EU level, powerful economic forces will keep the illegal French monopolies in place. The tide continues to turn in the gambling companies favor.®

Burke Hansen, attorney at large, heads a San Francisco law office