USTR Dismisses EU's Online Gambling Carve Out Questionnaire

by Devon Chappell, News Staff Writer

June 22, 2008

The Unlawful Internet Gambling Enforcement Act (UIGEA) may have gotten passed in 2006 (underhandedly passed, that is), however, it's true colors, not to mention the dire ineffectiveness of the legislation itself are now coming into light. When originally trumped by U.S. Senator, John Kyl, the whole basis of the UIGEA was one of morals and family values. In other words, Kyl's alleged motivations were to protect minors and addictive personalities from the "evils" of gambling. However, with all the gambling carve-outs in the UIGEA, can this really be the case?

These carve outs (for lotteries and horseracing) are precisely the basis behind heightened ill relations between the U.S. and basically the rest of the world. It is the basis behind a number of expected compensation suits with the World Trade Organization, including the current suit actively pursued by the online gambling friendly island of Antigua and Barbuda. It is also the basis behind the Remote Gambling Association's (RGA) pressure on the European Commission to investigate complaints from several respectable European online gambling operators forced out of the U.S. market because of protective special interests.

Despite all the evidence pointing directly at the fallibility and bias of the UIGEA, U.S. Trade Representative, Susan Schwab, continues to claim there is nothing discriminatory about the UIGEA and that all claims to the contrary are based on "mistaken assumptions" and that there is "no basis for any allegation of discriminatory enforcement of U.S. gambling laws". Schwab's latest statements are in direct response to a recent query by the European Union regarding the UIGEA.

Considering the extreme defiance and close-mindedness the U.S. has thus far exhibited regarding online gambling, including their pullout of obligations to the WTO's General Agreement of Trade and Services (GATS), it is now very likely the EU will consider taking further actions. Declining share prices, revenue losses in the billions and unchecked persecution by the USDOJ are at the heart of claims being made by several top European gambling companies.

At this stage in the game it truly looks as if the U.S. will need to amend the UIGEA to prohibit online betting for lotteries, horseracing and fantasy sports, or adopt regulation as posed by the Congressman Barney Frank's Internet Gambling Regulation Enforcement Act (IGREA), which recently took on two additional co-sponsors, making the total number of Congressional co-sponsors a solid twenty Representatives. The IGREA goes up once again before the House Financial Services Committee on June 24 for markup.

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