The European Union launched an investigation Monday into U.S. laws on Internet casinos and sports wagering, after European casinos complained that United States’ actions against them were infringing world trade rules.The investigation could lead the 27-nation EU to file a complaint at the World Trade Organization in the latest international tussle over a growing business worth more than US$15.5 billion a year.
“The U.S. has the right to address legitimate public policy concerns relating to Internet gambling, but discrimination against EU companies cannot be part of the policy mix,” said EU Trade Commissioner Peter Mandelson.
European companies claim a U.S. ban that forced them out of the lucrative American market discriminates against them in violation of WTO rules, while permitting domestic gambling companies, particularly those offering betting on horse races, to flourish.
This case is reminiscent of last years WTO case where Antigua and Barbuda took US to WTO court. The case become an embarrassment to Washington. Never had such a tiny nation brought a WTO complaint against the United States, which is one reason the dispute has implications well beyond the issue of gambling.In the Antigua case, and we can assume in the EU case as well, the companies complained that, before that ban, they had the right to operate under international trade laws, and that therefore the U.S. gambling ban U.S. violate WTO rules. In the end the WTO awarded Antigua and Barbuda the right to impose $21 million a year in sanctions on the United States in retaliation for the restrictions on online betting.
The Remote Gambling Association, which represents several European gambling companies, says the U.S. action is hurting their revenues and stock value as well as making them run the risk of substantial fines. It welcomed the EU’s decision to act on its complaint.
The U.S. underscored its battle against the industry when it arrested two British Internet gambling executives who were travelling through the United States in 2006.
The 2006 WTO ruling found the U.S. had the right to prevent offshore betting as a means of protecting public order and public morals. But it said Washington was breaking trade law by targeting online gambling without equal application of the rules to American operators offering remote betting on horse and dog racing.
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