The European Union opened an investigation into possible U.S. infringement on free trade. European companies complain that, since the passing of the Unlawful Internet Gambling Enforcement Act of 2006, they have been prevented from operating in a manner permisable to American competitors.

At the time of the passing of the UIGEA, the World Trade Organization ruled against the law as a matter of obstructing the free flow of trade as specified in various agreements. The United States responded by working out deals with the affected countries, including the European Union, Japan, and Canada, returning concessions to these countries in exchange for allowing the gambling block to stand.

However, European companies that were effectively driven out of the American market by the settlement are still under investigation by U.S. law enforcement for activities before the fact. These companies argue their business was not illegal until the UIGEA, and that since then American companies have continued to book online wagers, specifically involving horse and dog racing.

The WTO stance has consistently been that a country has the right to bar an activity it sees as threatening to public morals or order; but that allowing any instance of said activity by local business while blocking the participation of international organizations is clearly a violation of trade policies.

European Union Trade Commissioner Peter Mandelson said, “The U.S. has the right to address legitimate public policy concerns relating to Internet gambling, but discrimination against EU companies cannot be part of the policy mix.”

Antigua won a WTO settlement in December, but was only awarded a sanction against the U.S. in the annual amount of $21 million, a far cry from the $3.4 billion requested. Still, if the EU investigation results in complaints to the WTO, America might find itself facing a far larger penalty than any previously imposed.

Considering the complaints of the banking industry regarding problematic enforcement, those of citizens preferring individual freedom over prohibition, and the loss of substantial tax revenue by not regulating online casinos, it seems the only logical move is to dump the UIGEA in favor of a regulated and taxed system.

This entry was posted on Tuesday, March 11th, 2008 at 2:38 pm and is filed under European Online Poker, Online Poker, Poker Industry News, Poker Software. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.