Welcome to the News desk.
|Clash of the football shirts
Online gamblers and local regulators are locked
in combat over the right to advertise on a team's strip
European football shirt sponsorship has emerged as
the bizarre battleground for an increasingly bitter fight between offshore
internet gambling groups and a handful of continental regulators, determined to
outlaw unlicensed online betting on their turf.
Leading the charge for
the gambling groups is Gibraltar-based Bwin, already shirt sponsors at
Champions League winners AC Milan. This week the group added Real Madrid to its
sponsorship catalogue in a deal worth about 21m (£14m) a year - the
third largest in Europe, behind insurance group AIG's tie-up with Manchester
United and T-Com's deal with Bayern Munich.
The move, regarded by some
as commercially nonsensical, is a calculated one to demonstrate that Bwin will
not be deterred from promoting its betting and gaming websites despite the very
public arrest in France eight months ago of the company founders, Manfred
Bodner and Norbert Teufelberger.
The French authorities, furious that a number of Ligue 1 clubs had
signed with gambling sponsors for the first time last season, had sought to
make an example of Bwin, swooping on the two businessmen minutes before they
were to give a press conference last September announcing a shirt deal with AS
Monaco for the 2007/8 season. After several days in jail they were bailed and
told they could ultimately face three years behind bars if found guilty of
violating French gaming laws.
The crackdown, prompted by complaints
from French betting monopoly the PMU, sent a wave of panic through the league
and within weeks the LFP - the game's governing body - had issued a blanket ban
on all gambling sponsorship in football.
The move forced Nantes to
remove Gamebookers, a subsidiary of London-listed PartyGaming, from its shirts
while Toulouse was compelled to blank out 888.com from its strip. In a gesture
of defiance, however, at their first match following the ban the Toulouse squad
turned out against Olympique Marseille in shirts reading "???.com - censored".
In February this year the Guardian revealed that the French
authorities, unamused by such behaviour, had requested formal interviews in
Paris with executives from about 20 offshore-based betting firms. 888, another
firm quoted on the London Stock Exchange, was among those at the top of their
list and has sent representatives to France to answer questions.
Elsewhere in European football, there have been other regulatory
flashpoints. Last season Werder Bremen and 1860 Munich were both signed up with
Bwin but were told by separate regional courts that the company's logo could
not appear on shirts during home games. In defiance, the teams turned out every
other week in jerseys emblazoned with "We Win", clearly printed in the same
type as the Bwin logo.
The German courts challenged this cheeky move
and ultimately forced the gambling firm to abandon the sponsorship deal.
Already riled, local regulators again turned their attention to Bwin - said to
be the largest online gambling group in Germany and in takeover talks with
London-listed Sportingbet - when AC Milan turned out for the away leg of their
Champions League quarter final against Bayern Munich in a Bwin strip.
The result was a 100,000 fine for the Italian club, which Bwin
insists has not been paid. Meanwhile, the gambling firm has responded by firing
off yet another letter of complaint to European competition regulators. The
dispute comes down to a tension between domestic and European laws. About a
dozen member states and regional governments across the continent are
determined to outlaw what they see as online gambling businesses operating
without a local gambling licence. They are a threat to gambling addicts as much
as they are to local exchequers. But with computer servers located in Gibraltar
and Malta, such firms are difficult for regulators to reach. Instead, the
companies' advertising campaigns have become the battleground.
gambling groups, for their part, believe they have European law on their side.
They have won a number of landmark rulings from the European court of justice
making clear that member states must not restrict gambling groups from plying
their trade in the EU - in particular, in areas where member states are busy
promoting their own domestic monopoly betting businesses.
But as the rulings from Europe's highest courts
stack up in favour of the gambling companies, a band of determined member
states continue to harden their stance, using local gambling regulations to
pursue their clampdown.
Bwin's latest move to sign up with Real Madrid
once again raises the stakes in the battle with hostile regulators. Whether or
not Real turns out wearing the sponsor's name in unfriendly member states, the
company will have once again achieved its goal of highlighting what it sees as
a breach of European law.
"It is not us that is acting in a provocative
way," a spokesman for Bwin said. "It is us that is following European law.
National regulatory bodies that are willing to reject freedom of services rules
- that is provocative."
In Britain, Europe's largest online gambling
market, regulation is far more welcoming to offshore internet groups. The
Gambling commission has made clear when new rules on advertising come into
force in autumn there will be no limits on Gibraltar or Malta-licensed firms
promoting themselves. The industry describes this stance as "progressive" and
has led to many of the largest players floating on the London Stock Exchange.
Next season there could be a record five Premiership clubs sporting
gambling logos on their kit, including recently signed Boylesport (Sunderland),
Bet24 (Blackburn Rovers), 32Red (Aston Villa) and 888.com (Middlesbrough) -
though the latter has yet to be confirmed. But the biggest UK deal, by some
way, is Mansion's £34m four-year contract to have its gothic-script red
"M" on the kit at Tottenham Hotspur.
With Spurs qualified for Uefa Cup
football next season, it too could face the wrath of continental regulation. As
one industry insider and shirt sponsor put it: "The Real deal has changed
everything for us. It's a big, ballsy move, and the spotlight is going to be on
us all like never before."
The Real deal
sponsorship deal with Real Madrid, believed to be worth 21m-a-year
(£14m), is a milestone for the online gambling industry, which last
season left its mark on the European game by signing 14 clubs in the top six
leagues, up from four in 2005/6. It is the first gambling company to break into
the major league of football sponsorship and follows Manchester United's
decision last year to reject a similar offer with internet casino group
Mansion. It leaves the industry second only to financial services in terms of
how much it invests in European shirt deals. Real, with its international
following, is among a handful clubs likely to command such fees. For gambling
groups the high visibility logos help give customers the confidence to divulge
credit card details over the internet.