French Arrests of bwin Co-CEOs

[CityGuard]

I've received several press releases from Bwin about the unfolding situation. Here is that information:

15/09/2006

Statement regarding Co-CEOs

Whilst announcing the cooperation with the AS Monaco, Mr. Manfred Bodner and Mr. Norbert Teufelberger, Co Chief Executive Officers of bwin International Entertainment AG, were detained for questioning by French Authorities because of alleged violation of French gaming laws this afternoon, Friday 15th of September 2006.

A hearing is scheduled before a court in Nice for tomorrow morning.

Further information will be issued in due course.

16/09/2006


bwin Co-CEOs still in custody

From normally reliable sources it has just been learned that the public prosecutor has decided that bwin's two Co-CEOs, Manfred Bodner and Norbert Teufelberger, will be retained in police custody in Nice until the hearing scheduled for Tuesday in Paris. This news has not yet been officially confirmed. It is understood that the hearing has had to be delayed until Tuesday due to problems which the competent judge has had in coordinating appointments.

Every conceivable measure will be taken and not just within the Company to ensure that bwin's Co-CEOs are able to leave France again as soon as possible.

The Supervisory Board of bwin under the chairmanship of Hannes Androsch has thrown its entire weight behind the Executive Board and the Company, assuring them of its unreserved support, and campaigning vigorously for the release of both members of the Executive Board.

Initial steps have already been taken to initiate legal proceedings against this appalling exercise of arbitrary power in a move designed exclusively to protect the French government's gaming monopoly, and in complete contradiction of applicable European law and European judicial decisions.

17/09/2006

AFP interview with Frédéric Manin, French lawyer of bwin Co-CEOs (English version)

bwin: France using "disproportionate and illegitimate" methods

Paris, 17 September 2006 (AFP) - In the bwin case, France is acting in a disproportionate and illegitimate manner, says Frédéric Manin, the French lawyer of bwin Co-CEOs Manfred Bodner and Norbert Teufelberger who are still being held in France.

In essence, all of this is more than objectionable, the lawyer explained, as French law is incompatible with European Community law.

To assert itself against the activities of a company such as bwin in France, the French State must apply a consistent gaming policy and prove that the monopoly is the only way to protect the purposes of public order, Mr. Manin specifies.

bwin is alleged to have violated the lottery and betting monopoly held by La Française des Jeux (FDJ) and PMU in France.

If FDJ had a low profile, it might be acceptable, the bwin advisor underscores. But FDJ has launched a full-fledge diversification campaign, boasts a two-digit annual growth rate and, through its Euro Million game, is reaching out to countries other than France.

The interest of FDJ is solely financial, Mr. Manin asserts. If you let FDJ grow, then other gaming companies should also be allowed into France.

The order to appear before the examining magistrate of Nanterre at the beginning of the week was issued to the two bwin Co-CEOs on Saturday.

[CityGuard]

These releases raise a number of interesting questions in my mind:
In offering its Euro Million game to countries aside from France, is FDJ offering online gaming in other countries where it is apparently forbidden?

Does the French-government gaming monopoly violate European internal market trade standards, such as precedent set in the Gambelli case?

[CityGuard]

Latest press release from bwin about the arrests in France:

18/09/2006


Statement of the Chairman of the bwin Supervisory Board, Dr. Hannes Androsch

"As widely reported in national and international media, the two CEOs responsible for the strategic orientation of the bwin Group were detained in France on Friday, 15 September 2006, for the alleged violation of French gaming law.

We do not understand the course of action taken by the French authorities. Two irreproachable and highly esteemed CEOs of a company listed on the Vienna Stock Exchange are being treated as criminals. This stands in fundamental contrast to the principle of proportionality, particularly as both the company and the CEOs would have answered any summons issued by the French authorities at any time.

The action taken by individual EU Member States against private competitors who have put the state's gaming monopoly under pressure is neither new nor is it a surprise. The events in France are unprecedented in their aggressiveness, however. Although the European Court of Justice holds a different legal opinion and the action taken is in clear violation of EU law, sham argument of player protection/addiction are being put forward to maintain the monopoly as long as possible. In response, the EU Commission has already started infringement proceedings against seven Member States.

bwin is currently exhausting all legal options available with the full support of the Supervisory Board in order to secure the release of the two CEOs as soon as possible. The Board is convinced that bwin is operating within the appropriate legal framework.

Francis Teitgen, former president of the Paris Bar Association, has been appointed to take on the defence for both Co-CEOs.

The company is fully operational and able to do business. The company's operations have not been affected by the events in any way, as the pertinent responsibilities now lie with staff that is just as committed and experienced. No strategic decisions requiring the intervention of the Co-CEOs need to be taken for the time being.

The Supervisory Board has held an extraordinary meeting and expressed its full support of the two CEOs, Mr. Teufelberger and Mr. Bodner. The Supervisory Board is fully involved in all the company's activities."

Manfred Bodner and Norbert Teufelberger are currently on their way to Paris for their hearing before the examining magistrate scheduled for the late afternoon.

The company will continue to report on all ongoing developments.

[CityGuard]

The latest press release, received a few minutes ago:

18/09/2006


Co-CEOs released in France

This afternoon, a hearing before the examination magistrate of Manfred Bodner and Norbert Teufelberger took place in Nanterre, France. Proceedings for the alleged violation of French gaming law have been initiated against the bwin Co-CEOs.

The two Co-CEOs were released on bail of 300,000 EUR after the hearing.

bwin assumes that the trading of company shares at the Vienna Stock Exchange will be resumed starting tomorrow.

[CityGuard]

New press release update from bwin:

<TABLE width="95%" border=0><TBODY><TR align=left><TD style="FONT-SIZE: 10px; VERTICAL-ALIGN: bottom; FONT-FAMILY: Verdana, Arial, Helvetica, sans-serif" height=31>19/09/2006


</TD><TD></TD></TR></TBODY></TABLE><MAP id=anchorMap name=anchorMap><AREA style="BORDER-TOP-STYLE: none; BORDER-RIGHT-STYLE: none; BORDER-LEFT-STYLE: none; BORDER-BOTTOM-STYLE: none" shape=RECT coords=548,0,558,11 href="#top"></MAP><TABLE width="95%" border=0><TBODY><TR><TD align=left>Update: Current situation of the bwin Co-CEOs after their release

As announced in a previous ad-hoc release, a preliminary hearing of bwin Co-CEOs Manfred Bodner and Norbert Teufelberger was held yesterday, Monday, 18 September 2006, in Nanterre by the French examining magistrate. After lengthy questioning, the two Co-CEOs were released on bail in the amount of EUR 300,000 each, to be paid personally.

The bail will be used to cover any fines that may be imposed, and to ensure that both Co-CEOs will obey any future summons to appear in court. A verdict is expected within a year. Theoretically the maximum sentence in the event of a conviction would be three years. The Company is working on the assumption that the European Court of Justice will have passed a verdict in the Placanica case before the court in Nanterre passes its judgement, and that the judge in Nanterre will take the ECJ's verdict into account in arriving at a decision.

The examining magistrate also decreed that an announcement must be posted on the French gaming pages on the domain www.bwin.com within the next few weeks. This announcement must be agreed with the magistrate and state that the product offering in France may be in contravention of national games of chance regulations.

No official court proceedings have ever been instituted against the Company to date. bwin has informed the examining magistrate that the Company wishes to take part in the proceedings so as to be able to defend its legal position.

The two Co-CEOs will be holding a press conference at which they will be reporting on their experience in France and their expectations with respect to Brussels. The conference will take place at 12.30 p.m. on Thursday, 21 September 2006 in the trading hall of the old Vienna Stock Exchange, Wipplingerstrasse 34, 1010 Vienna.

Trading of bwin shares was resumed this morning. The drop in the share price has so far been significantly lower than originally anticipated.

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