EU Asks U.S. to Regulate Online Casino Gambling

by Hillary LaClair, Senior Editor
March 26, 2009

                In concluding its formal investigation against the United States, the European Commission issued a preliminary report that finds the U.S. laws on internet casino gambling are discriminatory and not “legally justified.” The findings in the report state that the treatment of foreign internet gambling operations by the United States blocks the market access for offshore companies and is a violation of the World Trade Organization rules.

                Late last year, the European Union sent a high level delegation to investigate claims that the U.S. Department of Justice has been and continues to discriminate against offshore online casinos and other gambling websites, violating international free trade agreements. Congress and members of the executive branch were visited by a team of E.U. investigators in September, headed by senior E.U. trade official M. Jean-Francois Brakeland, head of the European Commission’s dispute settlement office.

                "The European Commission investigation further highlights the need for the Obama Administration and Congress to regulate Internet gambling not only to protect consumers, but in order to restore integrity to the international trade system," said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative. "The Obama Administration should seek to forge a new direction on Internet gambling, rather than keeping in place a protectionist trade policy that hypocritically discriminates against foreign online gambling operators."

                When the formal investigation ended last month, EU representatives said that they would first attempt to negotiate with the United States rather than to take legal action. “The report next month will back the EU’s position, but the Commission intends to deliver its findings to Washington which it hopes will persuade the U.S. to start bilateral talks to find a solution without going to the WTO,” said the source. “A case would take a very long time tied up at the WTO…”

                EU Trade Commissioner Catherine Ashton has since asked that the U.S. begin to regulate and legalize internet casino gambling as a means of addressing the issue and comply with a global spirit of avoiding protectionist moves.  "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," said Ashton.

                In addition the protecting youth in the U.S. with regulatory laws, which currently are not in place and result in several U.S. citizens illegally gambling on the internet, a regulated industry could generate as much as $51.9 billion in federal revenue over the next decade. The figures were the result of a study conducted under Congressmen Barney Frank and Jim McDermott.

                Representative David Blunkett MP of the UK Parliament commented, “"I fully support the call by the EU Trade Commissioner, Cathy Ashton, for urgent U.S. action to regularise the trade relationship, respect WTO rules and to regulate online gambling. This would provide not only fair competition, but protection for individuals and families, and a legal basis on which substantial revenue could be raised at a time of considerable pressure on public finances."

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