Home US, EU Reach Internet Gambling Agreement

US, EU Reach Internet Gambling Agreement

Don’t let the headline excite you, there’s still no easy way to play poker online from a US-based computer — at least not with money involved. But today the US reached deals with the European Union, Japan and Canada to compensate those countries for revenue lost by keeping foreign gaming companies out of the US market. The agreement with the EU centers around trade concessions regarding mail services and warehousing, and though there was no immediate word on how much the deal is worth, it is likely to fall far short of the US$100 billion that European Internet gambling sites say they are owed.

Some background: In 2003 the tiny island nation of Antigua brought a complaint against the US at the World Trade Organization, saying that barring foreign nations from coordinating horse race gambling services in the US was discriminatory. The WTO ruled in favor of Antigua in April 2005, but the US responded by further tightening restrictions on online gambling. Last year, the US Congress made it illegal for banks and credit card companies to make payments to online gambling sites, effectively stifling the US Internet gambling market.

Further, in May, the Bush administration retroactively excluded gambling and betting services from a 1994 trade agreement. As a result, the EU and other nations sought compensation from the US.

As Bloomberg News reports, the implications of all this goes far beyond online gambling. “Instead of rewriting its gambling laws, the U.S. rewrote its trade rules to remove the issue from the WTO’s jurisdiction,” writes Lorraine Woellert. “The prospect that other countries may take a similar tack if cases do not go their way has alarmed the international trade community.”

“This is the trade equivalent of taking our ball and going home,” US Rep. Shelley Berkley (D-NV), told the House Judiciary Committee in November, speaking of the US decision to rewrite trade agreement obligations after being handed a WTO ruling it did not like. “You can be sure that if China one day decides that it shouldn’t have to comply with its WTO obligations, we will be the first to object.”

The whole affair has also drawn the ire of American software companies and the RIAA and MPAA. The reason? Antigua’s proposed remedy to compensate for lost Internet gambling revenue is to get the WTO to allow the country waive intellectual property protection on some goods. “Does it make sense for a country to expressly allow criminal conduct? We believe that it most certainly does not,” Jonathan Lamy, a spokesman for the Recording Industry Association of America, told Bloomberg News.

Antigua has further asked the WTO to impose $3.4 billion in sanction against the US for not complying with the April 2005 ruling.

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