BRIT BIG GUNS MAY FIGHT U.S. ONLINE GAMBLING BAN

25 January 2008

It's taken awhile, but the online gambling industry may be about to strike back


The UK-based Remote Gaming Association, a trade body that includes most of Britain's big-name gambling companies among its members, appears to be gearing up for a fight against U.S. bans on financial transactions with online gambling companies.

It is possible that the RGA was awaiting the outcome of negotiations between the European Union and the US Trade representative at the World Trade Organisation before making its move. The negotiations were over compensation claimed when the Americans withdrew gambling from their WTO commitments after losing a dispute over Internet gambling with Antigua and Barbuda.

The concessions wrung from the Americans by European Commissioner Peter Mandelson did not directly benefit the online gambling industry and a paucity of specific details in the announcement, and subsequent conflicting statements by American officials, left industry executives more than a little exasperated with the process.

In December 2007 the RGA filed a formal complaint against the United States for discrimination based on violations of World Trade Organisation rules, and it now appears that the trade association is prepared and ready to take up the cudgels directly with the Americans, giving media briefings on the background and the latest developments related to the complaint.

The vehicle for the RGA complaint is EU Trade Barrier Regulation, and the RGA claims 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 to prosper through protectionist exceptions.

At the time, Clive Hawkswood, the chief executive of the RGA, remarked: "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 on doing the same thing?"

"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," Hawkswood added.

The group has asked the EU to investigate the situation, arguing that though the US has repeatedly stated that all forms of online gambling are illegal, it has enforced this view only with non-US businesses. The European Commission is required to consider the complaint and open an investigation. This could lead to a further WTO dispute resolution procedure.

The RGA plans a detailed media session on January 28 in Brussels, where a panel of mainly legal experts will consider and give views on the issue and other online gambling related matters.

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