U.S. - E.U. time for progress?

U.S. - E.U. time for progress?

October 15, 2009.

Back in June this year, following an investigation into discriminatory US Online Gambling policies which discouraged foreign competition, the EU issued a statement and its report athttp­://­www.eu­run­ion.or­g/e­u/i­nde­x.p­hp?­opt­ion­=co­m_c­ont­ent­&t­ask­=vi­ew&id­=17­78#­Int­ern­etG­amb­ling.

The report concluded that the US measures and enforcement "...constitute an obstacle to trade that is inconsistent with World Trade Organisation rules. As a result, WTO (dispute) proceedings would be justified."

However, the report suggested that it was preferable that a dialogue be opened with the US Administration, with a view to finding a negotiated solution before taking WTO procedures further.

"Internet gambling is a complex and delicate area, and we do not want to dictate how the US should regulate its market," said EU Trade Commissioner Catherine Ashton at the time. "However, the US must respect its WTO obligations. I hope that we will be able to reach an amicable solution to this issue."

To date there have been no further statements, indicating that the negotiations are turning out to be more protracted than anticipated, despite a more enlightened and communicative US administration now in power under President Barack Obama. This is a situation with which the Antiguans will have some sympathy, having experienced similarly long-winded negotiations themselves with the US Trade Representative.

European online gambling and betting companies left the US market in 2006, but still suffer legal threat by US authorities based on their past activities on the US market. Party Gaming's recent multi-million dollar settlement with the US Justice Department on its pre-UIGEA activities shows just how expensive that threat has become. This is despite the EU report's conclusion that these proceedings are legally unjustified as well as discriminatory, because the activities of EU companies took place under the cover of US WTO commitments.

The EU investigation was triggered by a complaint lodged from the Remote Gambling Association (RGA), a trade association that includes most of the major UK Internet gambling companies in its membership. Perhaps it is time for the same body to nudge the EU along on this issue?

The EU report takes account of the unprecedented decision by the US to withdraw its WTO commitments on gambling and betting services. Once this withdrawal occurs, the US would no longer be obliged to guarantee future access to its gambling and betting market.

However, the report found that a withdrawal only affects future access to the market, but does not allow the US to disregard its obligations in respect of past activities.

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