Last March, the Remote Gambling Association (RGA) learned that its complaint filed with the European Commission would be acted on. The complaint stems from the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, which the RGA charges unfairly discriminates against foreign operators. On Thursday, the European Commission released its preliminary report.
The Commission agreed with the RGA (and many other industry organizations) that the United States is in violation because “the treatment of foreign Internet gambling operators by the U.S. under existing domestic law constitutes a barrier to market access for European companies and is inconsistent with World Trade Organization (WTO) rules,” according to a press release on Friday from the Safe and Secure Internet Gambling Initiative (SSIGI).
The complaint charges that the United States approves of domestic internet gambling, specifically wagering on horse racing, but shuts out international operators. One such domestic site, TwinSpires.com, has been called into question in the Commonwealth of Kentucky, where Governor Steve Beshear and Justice and Public Safety Cabinet Secretary J. Michael Brown are engaged in legal action to force the forfeiture of 141 internet gambling domain names. On the national level, the SSIGI has watched as Party Gaming Co-Founder Anurag Dikshit admitted to violating the UIGEA and Wire Act of 1961 in a New York court room. Dikshit agreed to hand over a $300 million fine in three installments and risks up to two years in prison. Sentencing is scheduled for December of 2010.
SSIGI spokesperson Jeff Sandman commented, ““The European Commission investigation further highlights the need for the Obama Administration and Congress to regulate Internet gambling not only to protect consumers, but in order to restore integrity to the international trade system. The Obama Administration should seek to forge a new direction on Internet gambling, rather than keeping in place a protectionist trade policy that hypocritically discriminates against foreign online gambling operators.” A recent study released by PricewaterhouseCoopers revealed that up to $52 billion could be raised over a 10 year period by taxing and regulating internet gambling in the United States.
E.U. Trade Commissioner Catherine Ashton gave her take on the next steps: “It is for the U.S. to decide how best to regulate Internet gambling in its market, but this must be done in a way that fully respects WTO obligations. I am hopeful that we can find a swift, negotiated solution to this issue.” Last September, E.U. trade officials arrived in the U.S. on a two week fact finding mission, culminating in Friday’s report. The RGA’s initial complaint was originally lodged in December of 2007.
Congressman Barney Frank (D-MA) was slated to introduce internet gambling legislation in March in the United States. However, with just four days remaining in the month, no bill has been introduced. Frank, who is the Chairman of the House Financial Services Committee, has been preoccupied with one of the worst economic climates in the history of the United States. His previous bill to regulate and tax the industry was HR 2046, the Internet Gambling Regulation and Enforcement Act. The bill, which was introduced in 2007, did not see time on the House floor during the 110th Congress and therefore must be reintroduced for consideration.
The RGA’s members include a veritable “who’s who” of European internet gambling operators including Betfair, CryptoLogic, Ladbrokes, Microgaming, Playtech, Paddy Power, Party Gaming, and William Hill. The London-based organization is headed by Clive Hawkswood. The SSIGI is based in Washington, D.C.
The European Commission could elect to work out an agreement with the United States directly or seek the intervention of the WTO. The SSIGI even cited U.K. Parliament member David Blunkett, who claimed, “I fully support the call by the E.U. Trade Commissioner, Cathy Ashton, for urgent U.S. action to regularize the trade relationship, respect WTO rules, and to regulate online gambling. This would provide not only fair competition, but protection for individuals and families, and a legal basis on which substantial revenue could be raised at a time of considerable pressure on public finances.” The official European Commission report is expected to be released next month.
Stay tuned to Poker News Daily for the latest from the European Commission.
