Bridges Weekly Trade News Digest • Volume 13 • Number 12 • 1st April 2009
EU Claims US Gambling Laws are Illegal
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US rules on internet gambling violate world trade law and have resulted in “serious adverse effects” for European firms, an EU report found last week.
“The report concludes that WTO action would be justified,” a statement from the EU Trade Commission said. But Brussels indicated that it would not rush to bring a WTO challenge on the matter.
“It is for the US to decide how best to regulate internet gambling in its market, but this must be done in a way that fully respects WTO obligations. I am hopeful that we can find a swift, negotiated solution to this issue,” EU Trade Commissioner Catherine Ashton said in a statement.
The report marks the end of an investigation that was launched a year ago, after the UK-based Remote Gambling Association filed a complaint with the EU. European gambling companies claim their profits and stock prices have tumbled since they were forced out of the US market with the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006. The law, which was enacted by a Republican-controlled Congress, prohibited credit card companies and financial institutions from processing transactions with overseas gambling companies
Now, with the Democrats back in control, US Congressman Barney Frank, a Democrat and the chair of the House Financial Services Committee, has said he plans to introduce legislation that would lift the current ban on internet gambling.
But even if the ban is lifted, the EU maintains that WTO action might still be justified if Washington continues to prosecute EU firms accused of past violations of the UIGEA.
Jeffrey Sandman, a spokesman for the Safe and Secure Internet Gambling Initiative, welcomed the report, calling the existing US law a “protectionist trade policy that hypocritically discriminates against foreign online gambling operators.”
The EU report comes nearly two years after Antigua and Barbuda won a WTO challenge against US gambling laws at the WTO (see Bridges Weekly, 30 May 2007, http://ictsd.net/i/news/bridgesweekly/7594/). A WTO arbitrator later granted the tiny Caribbean nation the right to cross-retaliate with annual sanctions worth US$21 million against US patents, copyrights, trademarks, and other intellectual property, as well as services companies.
ICTSD reporting; “US lawmaker to push to repeal online gambling ban,” REUTERS, 20 February 2009.
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