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EU Targets U.S. Over Net Gambling Ban

EU Demands Compensation Over Net Gambling Issue

June 20, 2007

According to a Dow Jones news release distributed by CNN Money, the United States now faces additional opposition over it's decision to outlaw internet gambling. The entire European Union has now joined the fight against the U.S. on the issue, and is seeking compensation from the United States due to the fact that the ban on internet gambling is in direct violation of US trade agreements.

The European Union put the United States on notice Tuesday morning that they are seeking compensation from the U.S. in reference to a financial ban that had been placed on bank and credit card transactions for the online gambling industry. The financial ban, known as the Unlawful Internet Gambling Enforcement Act (UIGEA), was signed into law by President Bush, and many content that the law is in direct violation of trade agreements that the United States signed in 1994.

The first to contest this law was the Caribbean island nation of Antigua and Barbuda, which was had an ongoing legal dispute filed with the World Trade Organization since 2005. The nation of Antigua has maintained the position that attempts to deter internet gambling is not only a violation of trade agreements, but that it also unfairly damages the island nation's economic situation.

Hundreds of individuals on the island have earned their salary working at online gambling companies. The online gambling industry, according to officials in Antigua, has helped remove the country's reliance on tourism for economic prosperity. This is especially important since the country's tourism market was severely damaged following a series of hurricanes in the late 1990s.

The combination of that passage of UIGEA, along with multiple arrests of British nationals who were traveling in the United States on charges of running gambling web sites, prompted a full scale bail out of the market from the largest gambling operators in Europe. Billions of dollars disappeared from European stock exchanges almost over night, and publicly traded gambling companies were forced to stop accepting wagers from the lucrative US gambling market.

Antigua repeatedly won it's dispute against the United States, as well as subsequent appeals that the US filed with the WTO on the matter. The United States then attempted a shifty legal maneuver as a method of escaping their own trade obligations. Many now pin their hopes on the European Union throwing weight behind the issue, particularly since there is little that Antigua could do to the US in terms of economic or trade sanctions.

The logical conclusion would be that the gambling companies that lost billions of dollars would be among the first to reap the rewards of any compensation from the United States. Unfortunately, it appears that their loss is mostly being used as a justification to open other trade initiatives, and that no actual monetary compensation is being sought. The concessions that the EU is seeking are coming in the form of other trade commitments by the United States.

Where does this leave those who have actually suffered as a result of the gross violation of US policy? It is too soon to speculate, but so far it looks like these companies and individuals will be left to fend for themselves.

Related News:

Net Gambling Still Illegal In The U.S.

INTERIM RULING FAVOURS ANTIGUA IN LATEST CHAPTER OF GAMBLING DISPUTE WITH US