EU probe to recommend WTO action?

The European Commission probe into the activities of US enforcement authorities in pursuing European online gambling companies and executives appears to be nearing a conclusion, according to reports from the Reuters news agency this week. And sources close to the probe have said that unless a negotiated solution can be found, it is likely that the investgating officials will recommend that a WTO action against the USA be launched.

The Remote Gaming Association in the UK, comprised of many large online gambling groups, led the charge last year in pressuring the EU to bring its influence to bear in the issue following World Trade Organisation disputes originally between the US and Antigua over inequitable and protectionist anti-online gambling legislation (see previous InfoPowa reports).

The action eventually led to the US withdrawing its gambling obligations under the GAT at the WTO, thereby incurring penalties, many of which are still being kept under wraps as a matter of 'national security.' The Antiguans continue to negotiate for a fairer deal with the support of the WTO.

Many European companies also felt that the zeal of US enforcement officials was unfairly and exclusively focused on non-American entities when it came to "illegal" online gambling allegations, and that legislative carve-outs for US companies involved in Internet betting on horse races, state lotteries and fantasy sports was unfair and commercially protectionist.

"The report next month will back the EU's position, but the Commission intends to deliver its findings to Washington which it hopes will persuade the U.S. to start bilateral talks to find a solution without going to the WTO," one source told Reuters. "A case would take a very long time tied up at the WTO and in the current spirit of avoiding protectionist moves in line with the G20 (Group of 20 emerging and industrial nations) statement, action should be avoided."

European Internet gambling companies lost billions of Euros in market value after the U.S. Congress moved in 2006 to shut down the U.S. market by making it illegal for banks and credit card companies to make payments to online gambling sites.

Many publicly traded European companies, such as PartyGaming, Sportingbet and, withdrew from the United States after Congress passed the 2006 Unlawful Internet Gambling Enforcement Act in a late night session attached to an unrelated but "must pass" security law.

The European Commission, acting on an industry petition, began a formal investigation in March into whether Washington was singling out EU companies for enforcement actions while allowing U.S. online companies to operate freely.

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