EU Slams U.S. Internet Gambling Ban - InformationWeek

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3/27/2009
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EU Slams U.S. Internet Gambling Ban

Restrictions on online gaming violate WTO rules, regulators claim.

The European Commission has found that the U.S. ban on Internet gambling lacks legal justification and discriminates.

The commission, the European Union's regulatory arm, launched a formal investigation into the ban to determine whether it violates World Trade Organization agreements. The investigation comes in response to a Trade Barrier Regulation complaint filed by the Remote Gambling Association (RGA), which represents gambling companies in Europe.

The complaint claims that the United States violates international trade law by threatening and pursuing criminal prosecutions, forfeitures, and other enforcement actions against foreign Internet gambling operators, while allowing some domestic online gambling, mostly off-track betting.

The commission recently released a preliminary report, which found that the United States' treatment of foreign Internet gambling operators creates a barrier to market access for European companies and violates WTO rules.

E.U. Trade Commissioner Catherine Ashton said the United States has a right to regulate Internet gambling within its borders, but it "must be done in a way that fully respects WTO obligations." Ashton said in a prepared statement that she hopes negotiators will come up with a solution.

The European Commission will likely try to negotiate with the United States. If that fails, the commission could bring a case to the WTO.

David Blunkett, former U.K. home secretary and current Parliament member, said he supports urgent action on the issue. "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," he said.

Opponents of online gambling say it should be banned because of the inability to restrict minors and protect consumers. They also cite personal problems and social ills associated with gambling.

Proponents argue that the government would have more control over consumer protection if it allowed online gambling and regulated it. A spokesman for the Safe and Secure Internet Gambling Initiative urged the Obama administration and Congress to "forge a new direction on Internet gambling."


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