Groupe Partouche to Appeal Ruling, Attorney says

A French court handed down a ruling on Thursday in the case against Patrick Partouche, CEO of the eponymous casino group, and two other defendants, for operating an illegal online casino in France. But lawyers have already filed an appeal and are confident in the outcome.

Partouche received a 12-month suspended sentence, plus a 40,000-euro fine for his involvement in a Belize-based online casino bearing his name.

The case dates to 2001 when Groupe Partouche was approached by Belize-based online gaming operator Raymond Pousaz, who was interested in using the Partouche name as a domain name in exchange for a commission, explained Thibault Verbiest, a senior partner at Ulys law firm in Paris and Brussels.

Partouche and Pousaz were introduced by Pascal Pessiot, a former Groupe Partouche director, who acted as broker of the deal, explained Verbiest, who is representing Pessiot in the case.

Under the terms of the agreement, Pousaz's company, Mandarin Dated Processing Ltd. (MDP), launched an online poker site using the Partouche name in order to attract French consumers, but Partouche had no part in operating the Web site, Verbiest said.

A few weeks after the launch of CasinoPartouche.com, however, French authorities forced the two parties to change the agreement in order to block access to French consumers. So, to comply with the order, the company installed a filter on the site to prevent the processing of French credit cards.

After losing access to French customers, MDP launched another Web site called Casino770.com which contained a link to CasinoPartouche.com, a free-play site.

"This is why Partouche was sued, because the Partouche name was linked to a pay-to-play site," Verbiest said, adding that free-play sites are legal in France.

Verbiest and the other lawyers for the defense argued that poker is a skill game, which is legal in France, according to French legislation. The law also states that online games of chance are to be operated by the state monopoly.

"The Web site was more about hold 'em poker, which is a skill game, therefore legal in France," Verbiest said. "Also the French legislation regarding casino style games and poker does not explicitly prohibit the online games."

Despite the defense's complicated legal argumentation, the court ruled against the defendants, which didn't surprise Verbiest.

"We have appealed and I remain optimistic about the final outcome because I think they have a bad case and we have a strong case," Verbiest said. "This is a lower court that ruled and they may be subject to some sort of pressure from the government, which is less the case with the court of appeals, which is normally more independent. The actual context is extremely negative concerning gambling. But it may change with the elections. So, there is a political context and pressure on the shoulders of the lower courts to be witch hunting. So, I'm not surprised by the ruling. I expected to be obliged to appeal it. This is a landmark case. This is the first time in France that a court has ruled on online gambling casino games. We have a few rulings on betting, but this is the first one on gambling."

"I think the court should acquit Partouche," Verbiest added.

Verbiest explained that a suspended sentence for Partouche means he is free of penalty under condition.

"If he is convicted of a similar offense in the next five years, he would be required to serve his 12-month jail sentence," he said. "But even if the Court of Appeals affirms the conviction, he will not have to serve jail time (unless convicted of a similar crime). He will have a criminal record, though."

The lawyers for all three defendants have filed appeals and Verbiest gave a small sample of his plan of attack, based mainly on the recent Placanica ruling, which said that the Italian legislation prohibiting the cross-border provision of betting under threat of imprisonment is in violation of the freedom of establishment and services under the Treaty on European Union.

The French gambling market is known for the refusal of the French Government to grant online casino licenses to land based casino operators, such as Groupe Partouche, while giving the green light to state monopolies, such as Française des Jeux, to do so.

"Partouche has tried in vain for five or six years to gain an online gaming license while the two national monopolies were allowed to operate online gaming in France," Verbiest said.

The repeated denial for licensure led Partouche, along with a syndicate of other French land-based casino operators, in April 2006 to file a complaint with the European Commission against Française des Jeux on the grounds that the company is guilty of abusing a dominant market position.

"According to Placanica ruling, we have a case," Verbiest said. "The main message from the ECJ (European Court of Justice) in the Placanica case was to say that if an EU operator is excluded from the licensing regime in a way that is not in accordance with EU law, he cannot be subject to criminal prosecution. This is, in my opinion, the situation that Partouche is in. Partouche has been asking for authorization for years and years in vain and suddenly he got prosecuted criminally. So, I think we have a case, according to Placanica ruling."

Lawyers will also try to prove that poker is a skill game and that Partouche was wrongfully sued because he only granted a license to a free-play site.

Pousaz and Pessiot, also convicted, received suspended prison sentences and fines, while Partouche International was fined 150,000 euros.