Swedish online betting firm Unibet says its chief executive Petter Nylander has been detained by police over an alleged breach of French gambling laws.
Unibet's cycling team was banned from this year's Tour de France
The company said Mr Nylander had been taken into custody by Dutch authorities while trying to fly to the UK.
Unibet said the move was connected to a legal challenge against Unibet by the two French betting monopolies, who say the firm operates illegally in France.
Current French law prohibits the operation of foreign gambling firms.
French lottery monopoly Francaise des Jeux and horse racing betting monopoly PMU filed the proceedings against Unibet in 2006.
The timing of the detention may embarrass the French government, which only last week said it wanted to liberalise the online gambling market in France.
The comments followed criticism from the European Commission that France's current stand on overseas gambling firms broke European competition rules.
In the summer, the French government lost a European legal challenge against Maltese online betting firm Zeturf, which was given the go-ahead to legally operate in France.
"Unibet is outraged by France's total disregard of European Community law aiming to protect a domestic commercial gambling monopoly, which is being challenged by the European Commission," said Unibet in a statement.
The firm added that Mr Nylander was still being held by Dutch authorities.
In June this year, Unibet's cycling team was banned from competing in the Tour de France, after the race organisers ruled that its participation would contravene French rules that outlaw advertising by foreign gambling firms.
Unibet said at the time that its sense of injustice was compounded by the fact that the race's main sponsor was French horse racing betting monopoly PMU.