EUROPEAN ONLINE GAMBLING IS NOT GIVING UP (Update)

21 December 2007

Despite the EU - US deal, companies could press charges against US discrimination


With the disappointment of an unsatisfying World Trade Organisation compensation deal between the USA and EU still bitter, European online gambling groups are set to file a discrimination complaint against the Americans, reports The Times Online today (Thursday)

The companies say that the US Department of Justice has violated international trade law by forcing them out of the US market and taking legal action while allowing domestic online gaming operators to continue trading.

The move by the Remote Gaming Association (RGA) comes only days after the European Union agreed a trade deal with the US to compensate the bloc for loss of earnings from gaming after the Americans withdrew their trade obligations from the international treaty.

The action was filed under a provision of the European Union’s Trade Barriers Regulation by the Remote Gambling Association (RGA), which represents the largest remote gambling companies in Europe. RGA asserts that the U.S. Department of Justice is in violation of international trade law by threatening and pressing criminal prosecutions, forfeitures and other enforcement actions against foreign online gaming operators while allowing domestic U.S. online gaming operators, primarily horse betting, to flourish.

“We have been left with no choice but to pursue all legal avenues available to challenge the US Department of Justice for its discriminatory enforcement activities against European online gaming operators,” Clive Hawkswood, the chief executive of the RGA, told The Times.

The group has asked the EU to investigate the situation, arguing that although the US has repeatedly stated that all forms of online gambling are illegal, it has enforced this view only with non-US businesses.

“How would US investors and businessmen feel if they invested in a business in the UK based on international law commitments, and then suddenly the UK not only passed new laws forcing them to shut down their business but tried to throw them in jail for past activities, while still allowing their domestic competitors to continue doing the same thing?” Hawkswood said.

Last year the US Congress made it illegal to make payments to online gambling sites, and in May this year the US said that it was excluding gambling services from market-opening commitments it made as part of a 1994 world trade deal.

The Department of Justice has subsequently threatened and carried out legal action against European firms.

On Monday a trade compensation deal was agreed between the EU and the US that will allow European companies access to the US postal market and warehouse sector as compensation for the lack of access to gaming.

The European gambling industry had hoped that the EU would push the US into allowing it back into the US market.

Although the trade deal gave compensation, it did not deal with the legal side of the dispute, the RGA says.

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