A week before the US was scheduled to meet with the European Union, the US Trade representative asked to postpone the meeting. The meeting is supposed to discuss American online gambling regulations. The EU are investigating charges that the US is violating a treaty with the World Trade Organization and also that the Unlawful Internet Gambling Enforcement Act (UIGEA) is being enforced in a way that discriminates against European gaming companies.
Many of the larger European-based gambling concerns such as PartyGaming, Sportingbet PLC, 888 Holdings and Leisure & Gaming PLC were forced out of the US online gaming market when the government passed UIGEA. The new law made it illegal for financial institutions to process payments from US residents to online gambling businesses. The companies claim to have lost about half of their business in one fell swoop, a market segment worth about $15.5 billion USD.
The first to challenge the new US law was the island nation of Antigua. Since the US had signed a treaty in 1995 entitled the General Agreement on Trade in Services (GATS), which allowed foreign companies into the lucrative American online gaming market. In December 2007, the WTO sided with the Caribbean nation and awarded them $21 million dollars annually in trade sanctions against the US. The WTO also granted Antigua the right to ignore US copyright laws and distribute American media such as music, movies and software. At that point, the US withdrew online gaming from all of its WTO agreements.
Shortly after the WTO ruled against the US, a complaint was filed by the Remote Gaming Association which represents a number of European online gambling companies. The complaint accuses the US of discriminatory enforcement against European concerns while allowing domestic online gambling including horse racing to continue unhindered. The European Commission has tried to get answers to the questions raised but the US trade representative continues to avoid responding.
“If the U.S. continues to blow these talks off, there could be severe trade repercussions,” said Casino Gambling Web analyst Gordon Price. “But they do not seem concerned with any sanctions that might be coming.”
If the US continues to avoid answering the questions raised by the European Commission, the next step may result in a suit before the WTO. This was referred to as a possibility when the complaint was first filed but it doesn’t seem to faze the US government.