Dave,

See below broad summary from certain key Eurpoean jurisdictions. The 
"concern" countries are Belgium and the Netherlands.

J


---------------------- Forwarded by Justin Boyd/LON/ECT on 26/05/2000 12:58 
---------------------------
   
	Enron Capital & Trade Resources Corp.
	
	From:  "West, Nick" <nick.west@linklaters.com>                           
26/05/2000 12:58
	

To: "'jboyd@enron.com'" <jboyd@enron.com>
cc: "Didizian, Marly" <marly.didizian@linklaters.com> 

Subject: Enron online/sports.com competition


Dear Justin

You asked for a summary of the UK and foreign advice which we have collated
on the lawfulness of the Enron online/sports.com "spread betting"
competition. I have set out a short note below. Marly and I would be happy
to discuss it with you further by telephone at any time this afternoon.

I have assumed that the competition is based predominantly on chance. I have
also assumed that there is no element of indirect consideration required to
enter the competition. We may need to discuss these points in more detail.

UK:

There appears to be no problem. The competition cannot be a lottery as the
contestants do not pay to enter. The competition may fall within the
definition of gaming, but only unlawful gaming is prohibited. The
competition format which you have described is unlikely be an unlawful game.

Germany:

There appears to be no problem as far as gaming laws on lotteries and the
German Trading Regulations are concerned, because the participants will not
pay to enter the competition. However, it is possible that there may a
breach of unfair competition laws. One of Enron's customers without online
trading capacity or one of Enron's competitors could argue that the
competition is anti-competitive i.e. Enron is trying to influence the
decision of its online trading customers as to whether they should trade
with Enron at all. We should consider this risk in greater detail. If the
game was held to be anti-competitive, Enron would have to cease to offer it
to German customers.

Netherlands:

Under the Dutch Games of Chance Act (GCA), games of chance are generally
prohibited, even if participation is free.  However, we have been advised
that, to date, it is not clear whether the GCA even applies to internet
games. We have also been advised that, in any event, the Dutch authorities
are unlikely to consider it a high priority to try to enforce the GCA
against a game offered for a limited time with only a moderate prize.
Finally, we have been advised that if the game complies with the law in the
country of its origin, this would decrease the likelihood of any Dutch
action. Thus the key decision in the Netherlands is whether the commercial
benefits of the competition outweighs the risk of a fine for contravention
of the GCA - maximum NLG 25,000 (approx 10,000 USD).

The GCA also only applies to games of chance. The provisions of the act
could be avoided if a greater degree of skill was introduced in to the
competition.

Italy:

You may recall that under Italian law, it appears that Enron will need to
get the approval of the Italian Ministry of Finance to offer the game to
Italian customers as it falls within the definition of an "advertising
contest". Having discussed this matter with our Italian colleagues, it seems
that Enron will be unable to avoid this requirement unless it does not offer
prizes. Authorisation is likely to take a minimum of 30 days - there is no
fast track process. Furthermore, since the website will be co-branded Enron
online/sports.com, we have been advised that both parties would need to seek
authorisation. Failure to obtain authorisation may result in a fine of up to
15m Lire (approx 7,500 USD) and continuing an unauthorised game in
contravention of an order of the Ministry of Finance may result in a fine of
up to 100m Lire (approx 50,000 USD).

We have also been advised that the Italian Ministry of Finance does not
undertake regular or thorough searches of the internet to identify
potentially unlawful advertising contests. With this is mind, Enron may
consider that the commercial benefits of running the competition in Italy
outweighs the risk of being fined. We may need to consider this issue in
more detail.

Belgium:

The advice we received from our Belgian colleague is inconclusive. The game
does not fall foul of the new Law on Games of Chance as no entry fee is
charged. However, we have been advised that there is a small risk that the
game may be prohibited under the Law on Lotteries of 1851 since it is a game
of chance. This risk can be alleviated by limiting the access to the game to
defined group of users - as is the case here - and by increasing the level
of skill involved. We may need to consider this risk in more detail since
civil and criminal sanctions may be imposed on the organisers of a
non-authorised lottery - imprisonment for up to 3 months and a fine of up to
BEF 600,000 (approx 14,000 USD) for the organiser of the competition (Enron)
as well as a fine for the distributor (sports.com) of up to BEF 200,000
(approx 4,500 USD)

Switzerland:

There appears to be no problem under Swiss law as the contestants do not
need to pay to participate.


____________________________________________________________

This message is confidential. It may also be privileged or
otherwise protected by work product immunity or other legal
rules. If you have received it by mistake please let us know
by reply and then delete it from your system; you should not
copy the message or disclose its contents to anyone.
____________________________________________________________