Sportingbet Targeted by Authorities in Taiwan

The future of a well known Internet sports betting service in Taiwan could be in doubt following raids at the offices of one of its marketing partners.

U.K.-based Sportingbet plc, which runs Sportingbet.com, has been pursuing the Asian market heavily since soccer's World Cup was held in Korea and Japan in the summer of 2002. Authorities in Taiwan Target Sportingbet

Last week the company announced plans further its Asian market penetration by targeting the Taiwanese marketb, and Mark Blandford, executive vice chairman of the group, was in the region visiting the company's media partners in preparation for a marketing campaign. Various news reports during his visit claimed that the company had a betting shop in the country, where operating such a service is illegal.

On Monday authorities with the Interior Ministry raided the offices in Taichung City of 101 Sports, one of Sportingbet's content suppliers, and SBC Advertising et Promotions Ltd, Sportingbet's promotional agent.

In Taipei City, authorities searched the offices of a high-tech company, where they suspected Sportingbet was secretly housing servers used for funneling bets to England.

Andrew McIver, group finance director for Sportingbet, said the strange series of events could delay the company's plans in Asia, but will not derail them.

"I don't think this will be a hindrance to us getting deeper into the Asian market," he said. "Nothing has changed really."

McIver said the company is puzzled as to how the reports, all of which the company says are erroneous, came about.

One such report claimed the group was preparing to launch a national lottery. In response, Blandford held a press conference to set the record straight. Blandford told reporters that no such plans exist and that Sportingbet has no assets or personnel in the country. He said they have around 300 Taiwanese customers, but all of the betting is conducted through servers based in the United Kindgom. The raids came shortly after the press conference.

McIver said Sportingbet has always taken the stance that the location of its servers is where the betting takes place.

"When you buy a book from Amazon you buy it off their servers in New York or wherever they are," he said.

The Criminal Investigation Bureau, meanwhile, is examining computers and other office material seized in the raid and is expected to release its findings within a week or two.

Deputy chief of the CIB, Wang Wen-chung, told the Taipei Times that four computers were taken along with account books and other data.

Taipei District Court Prosecutor Chen Hung-ta said the goal of investigators is very clear.

"Our major concern is to see whether the company has instigated people to bet," he said.

The Taipei District Court has launched a formal investigation into the company, according to the Times.

Following the raids, officials with SBC stressed that no betting was being channeled through their office.

"We simply offered information about the results of sports," said company manager Andy Yeh. "Whether people bet or not has nothing to do with us. Sportingbet is a legal and listed company in Britain, and it has no server in Taiwan. Under such circumstances, I could not see how we have violated the law."

Sportingbet would still like to target the Taiwanese market, but Blandford said the company will consult with its legal counsel before moving forward with such plans.

Nigel Payne, chief executive, said the raids could have been part of a campaign by Taiwanese authorities to crack down on Internet betting ventures that had set up shop in the island without regulatory permission.

The company said its only contact with the 300 or so Taiwanese customers was through its Chinese-language Web site based in London. Payne said he understood the Taiwanese authorities' concerns about tax evaders and acknowledged the difficulty governments face in regulating the activities of offshore online gambling companies.

Sportingbet boasts 840,000 clients from 150 nations betting on a wide variety of sports events and transactionsb in 24 different currencies.

There are currently 11 million Internet users in Taiwan, according to figures from Sportingbet, and the island has long been a large market for betting on National Basketball Association games from the United States.