For Immediate Release
Contact: Michael Waxman
(202) 872-0010 or (202) 872-4860
European Union Investigates U.S. Trade Violation on Internet
Regulating Internet gambling by Congress would resolve dispute
(Washington, D.C. – March 11, 2008) The European Union announced yesterday that it
will open an investigation into a possible international trade violation by the United
States for discriminatory trade practices against European online gambling companies.
A solution to this international trade dispute is contained in the Internet Gambling
Regulation and Enforcement Act (H.R. 2046), introduced by Congressman Barney Frank
(D-MA). This legislation would bring the United States into compliance with World Trade
Organization (WTO) requirements by regulating Internet gambling and creating a level
playing field among domestic and foreign Internet gambling operators.
"The U.S. has the right to address legitimate public policy concerns relating to Internet
gambling, but discrimination against E.U. companies cannot be part of the policy mix,"
said E.U. Trade Commissioner Peter Mandelson. "We are interested in a constructive
and mutually satisfactory solution to this issue."
The European Union investigation comes following a contentious trade dispute over
Internet gambling, in which the Caribbean nation of Antigua successfully challenged the
regulation of Internet gambling in the United States. During the WTO dispute last year,
Mandelson stated that the U.S. Congress should consider opening its market to
overseas operators. “I think (Frank) takes a fair-minded, common sense approach to
this and we look forward to that being effective legislation,” said Mandelson in an
interview with Reuters.
“The EU investigation only highlights the reckless manner in which the U.S. has handled
its withdrawal of gaming commitments under the GATS (General Agreement on Trade in
Services),” said Nao Matsukata, formerly Director of Policy Planning for USTR Robert
Zoellick and now a Senior Advisor for Alston & Bird, LLP. “This situation would not be
possible if the United States had chosen to resolve the GATS dispute from the beginning
by appropriately changing U.S. law and adopting the Frank bill."
The investigation by the E.U. is the result of a Trade Barrier Regulation complaint filed
by the Remote Gambling Association (RGA), which represents the largest remote
gambling companies in Europe. The RGA claims the United States is in violation of
international trade law by threatening and pursuing criminal prosecutions, forfeitures and
other enforcement actions against foreign Internet gambling operators, while allowing
domestic U.S. online gambling operators, primarily horse betting, to flourish.
"To move into a formal investigation reflects the E.U.’s belief that this matter is serious
enough for them to put at risk the larger transatlantic relationship and other positive
developments in the bilateral trade relationship,” Matsukata added.
“It is time for the U.S. to end its hypocritical practices that discriminate against foreign
online gambling operators, while allowing U.S. gambling operators to accept bets for
certain forms of gambling,” said Jeffrey Sandman, spokesperson for the Safe and
Secure Internet Gambling Initiative. “Regulating Internet gambling should be supported
as a means of resolving this trade dispute, protecting consumers and ensuring that
billions of dollars in taxes are collected for critical government programs.”
After the investigation, the E.U. could pursue discussions with the U.S. to find an
appropriate solution to end the discrimination. If the parties cannot settle the matter
themselves, the E.U. could bring a case against the U.S. to the WTO.
About Safe and Secure Internet Gambling Initiative
The Safe and Secure Internet Gambling Initiative promotes the freedom of individuals to gamble online with the proper safeguards to protect consumers and ensure the integrity of financial transactions. For more information on the Initiative, please visit www.safeandsecureig.org. The Web site provides a means by which individuals can register support for regulated Internet gambling with their elected representatives.
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