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European Commission Claims U.S. is in violation of trade agreement

June 11, 2009

The European Commission released a report earlier this week that states the U.S. laws on online gambling are legally not substantiated and are biased to international Internet gambling promoters. Rules established lately by Rep. Barney Frank (D-MA), the Internet Gambling Regulation, Consumer Protection and Enforcement Act, would solve this trade strife by governing Internet gambling and formulating a level competing field among domestic and foreign Internet gambling companies.

"The European Commission account furnishes yet another cause to the administration and Congress should support pending laws to regulate online gambling, which would settle the trade agreement transgression and best guard clients" expressed Jeffrey Sandman, representative for the Safe and Secure Internet Gambling Initiative. "The Obama Administration should try to forge a new direction on Internet gambling, rather than keeping in place a protectionist trade policy that hypocritically discriminates against foreign online gambling companies."

The European Commission record, initiated by a Trade Barrier Regulation grievance filed by the Remote Gambling Association, determines that the handling of foreign online gambling companies by the U.S. under existent domestic law forms a barrier to market entry for European companies. In addition, the report establishes that the U.S. is in transgression of international trade law by intimidating and practicing criminal prosecutions, confiscations and other enforcement activity versus foreign online gambling companies, while permitting USA casino online gambling companies, primarily horse betting, to flourish.

The report suggests resolving the trade dispute through a negotiated solution with the Obama Administration. If the parties cannot settle the matter themselves, the Commission could bring a case against the U.S. to the WTO.

Rep. Frank's legislation would establish a licensing and enforcement framework to permit licensed gambling companies to accept wagers from individuals in the U.S. The legislation also mandates a number of significant consumer protections including safeguards against compulsive and underage gambling, money laundering, fraud and identify theft.

An additional piece of legislation to Rep. Frank's bill introduced by Rep. Jim McDermott (D-WA), the Internet Gambling Regulation and Tax Enforcement Act (H.R. 2268), would ensure the collection of taxes on regulated Internet gambling activities. According to a tax revenue analysis, regulated Internet gambling would allow the U.S. to capture much-needed revenue in an amount ranging between $48.6 billion to $62.7 billion over the next decade. Without this legislation, this revenue will remain uncollected while millions of Americans gamble online without customer protections.

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