Europe targets US over gambling law

The European online gambling industry is to urge the European Union (EU) to challenge the United States’ protectionist online gambling legislation, and to seek $100 billion compensation in the process.

Since Washington effectively banning online gambling in the United States with the introduction of the Unlawful Internet Gambling Enforcement Act (UIGEA) last October, billions of dollars was wiped off the value of the industry.

European companies such as PartyGaming, and Sportingbet - which are some of the biggest names in the industry – have been shut out from the lucrative US market and are now seeking compensation.

In fact, the US made a compensation offer to the EU on Friday, but that was deemed short of acceptable.

“The offer made by the US so far is insufficient. We are continuing to negotiate to secure improvements,” said a spokesman for the EU Trade Commission Peter Mandelson.

A deadline of October 22 has now been set for the US to come up with an adequate compensation package.

"One major question is how strong the EU will be in pushing the U.S. for all the concessions available to it," said one trade lawyer.

The Remote Gambling Association (RGA), whose members include gambling powerhouses such as Ladbrokes and William Hill, said if the EU does not make a strong challenge to the US, then there would be a danger that the US could introduce similar protectionist legislation.

“The US has used an illegal trade barrier. This sets a precedent. If the EU does not act, it could encourage the US to do the same elsewhere,” said Clive Hawkswood, chief executive for the RGA, speaking at a news conference in Brussels.

Despite the calls for compensation, everyone in the industry would much prefer if the US reversed the gambling legislation.

"They have got themselves into a terrible mess and there is an easy way out for them," Mr Hawkswood continued.

However, even though a total 180 by the US may be off the cards, amendments to the legislation, as put forward in April by Congress chairman of the House Financial Services Committee, Barney Frank, is probably the best online gambling companies can hope for.

Editor, - 2007-09-27 11:12:38

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