U.S. SHRUGS OFF E.U. QUESTIONNAIRE

27 June 2008

Scene is set for further litigation regarding the American policy on Internet gambling


A questionnaire sent by the European Union to various American parties concerning the US discriminatory policy on Internet gambling has been shrugged off by the United States Trade Representative to the World Trade Organisation, the Financial Times reports.

The negative response is hardly likely to improve the atmosphere when European Commissioner Peter Mandelson and his team meet the Americans next month to further discuss the issue following complaints referred by the Remote Gaming Association (see previous InfoPowa reports)

Depending on the conclusions reached as a result of the questionnaire and the meetings, the EU could launch further action in pursuit of the claims.

The RGA urged the European Commission to investigate complaints from European online gambling operators that European companies are being targeted by US gambling laws to protect certain US operators, such as the websites run by the American horse-betting industry.

The FT reports that Susan Schwab, the US Trade Representative, responded to the European Commission's questionnaire saying there was "no basis for any allegation of ‘discriminatory enforcement’ of US gambling laws”.

Schwab told the Commission its queries were based on 'mistaken assumptions', saying the 2006 legislation did not alter which gambling activities were lawful or unlawful. Enforcing US law and bringing charges was based on a number of factors, but nationality was not one of them, the USTR added.

The response suggests a lack of concern on the part of US officialdom, and seems to ignore the blatantly discriminatory "carve-outs" or exemptions in US gambling laws like the Unlawful Internet Gambling Enforcement Act that enable online betting through US horse racing and lottery websites whilst barring transactions with European companies and prosecuting visiting European gambling executives.

The advent of the UIGEA in late 2006 caused several major European companies to hurriedly exit the US gambling market at a cost of billions of dollars in lost revenues and declining share prices.

Exacerbating the issue is the fear among several large European companies that they may be pursued by the US Department of Justice for activities in the United States prior to the passage of the UIGEA, leading to currently ongoing negotiations with the Americans and the possibility of punitive "settlement" agreements.

The RGA's chief executive, Clive Hawkswood claims the US is guilty of “unfair and discriminatory treatment of the EU gambling industry and the continuing threat of prosecutions cannot be allowed to go unchecked”.

The focus will be on the UIGEA next week, too as Congressman Barney Frank's HR5767 bill prohibiting further implementation of the supporting regulations for the UIGEA goes before the House Financial Services Committee for discussion and markup on June 24. Two more Congressman joined those co-sponsoring HR5767 this week, bringing total political sponsorship for the measure to 20 Representatives.

Online Casino News courtesy of InfoPowa