EU COMMISSIONER STANDS UP FOR ONLINE GAMBLING

9 November 2007

"It's not in the interest of American consumers to have good responsible competitors in this market excluded by regulatory mechanisms..."


The European Union's compensation claim against the United States for its withdrawal of World Trade Organisation obligations on online gambling (see previous InfoPowa reports) took another step forward this week when EU Trade Commissioner Peter Mandelson arrived in Washington to pursue the matter with US leaders.

Mandelson is in Washington as part of an effort to persuade Congress to repeal a ban on Internet gambling signed into law last year, reports Reuters. Comm. Mandelson argued that the ban was unfair to Europe, where much of the world's online gambling operations are centred.

The United States must change an Internet gambling law that discriminates against European companies by preventing them from offering services in the U.S. market, the European Union's top trade official said.

"What we need to see is a change in U.S. legislation that removes that discrimination against EU operators," Mandelson told reporters before heading to Capitol Hill to discuss the issue with U.S. lawmakers, the Reuters news agency reported.

"It's not in the interest of American [online gambling] consumers to have good responsible competitors in this market excluded by regulatory mechanisms," Reuters quotes Mandelson.

In October 2006, in one of his final acts as Senate Majority Leader before his retirement, Bill Frist engineered a set of rules that managed to tack a previously rejected separate bill banning monetary transactions with online gambling operations in the US, onto a sea ports regulation bill containing anti-terrorism measures that the Senate was certain to pass, and President Bush sure to sign.

The SAFE Ports Act doesn't ban the act of gambling online, but prohibits financial transactions with online gambling companies. The ban on those transactions adversely impacted the online gambling industry and caused extensive corporate damage to companies that exited the US market in its wake. Within weeks of the UIGEA being signed into law, trading in stocks of online gambling firms in Europe plunged sharply.

European gambling firms recently asked the EU to pursue claims of up to a reported $100 billion in compensatory sanctions, and Comm. Mandelson indicated he supported their claims, raising them to the level of a trade deficit line-item.

"When a member of the WTO defaults on its commitments, compensation is due," Mandelson remarked. "That's the case of online gambling."

In a speech before the Carnegie Endowment later, Mandelson presented a broader view of EU/US trade relations:

"Close ties between Europe and the United States are still the main foundation of world politics and the global economy," he said. "We have a deep store of shared values, experiences, and interests.

"The EU is beginning to transform itself from an internal market into an outward looking political actor - as [French] President Sarkozy reflected in his speech to Congress this week. The EU and the US cannot dictate every contour of the global age, but that does not mean we will be dictated to either."

Online Casino News courtesy of InfoPowa