Tuesday, December 25, 2007

US, EU reach deal on Internet Gambling

Sources: InformationWeek, Financial Times

On Monday, December 17 the EU and the US entered into a new bilateral deal includes opening up opportunities for research and development, storage, warehousing, and postal sectors. This American offer was in compensation for the closing of the US market to online gambling companies. The United States has also reached similar agreements with Canada and Japan.

The agreement was met with mixed reviews—primarily negative from the gambling sector. Clive Harkswood, the chief executive of the gambling trade association, says that the companies will be losing approximately US$ 4 billion in revenue per year.

Several major online gambling have seen drops in their share value, and the new deal likely will not change their values. Accordingly, the Remote Gambling Association, the trade association representing gambling interests, has filed a former complaint under the EU Trade Barriers Regulation. The complaint asks the EU to "investigate discriminatory enforcement as an illegal barrier to trade." The RGA claims that the “US Unlawful Internet Gambling Enforcement Act,” or the “UIGEA,” outlaws foreign online gaming companies while allowing US companies to not suffer.

The WTO has already looked favorably on these types of claims against the United States. The WTO has already ordered the US to grant compensation after it refused to open up the sector. Furthermore, the WTO will soon rule on Antigua’s US$ 3.4 billion request for compensation.

DISCUSSION Question:

If the WTO forces the United States to pay compensation for the closing of the online gambling market, can the US renegotiate its deal with the EU? What else could happen, if the United States is slapped with a multi-billion dollar penalty?

2 comments:

MrX said...

I absolutely love gambling online and I think that everyone should have the right to gamble from the comfort of their own homes as long as safeguards are in place to protect against underage and problem gambling.

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