EU Launches Investigation into UIGEA

Yesterday (March 10, 2008) the European Commission, also known as the executive branch of the Europe Union, began an inquiry into the legality of the United States’ discriminatory anti-Internet gambling legislation. This latest move against the controversial Unlawful Internet Gambling Enforcement Act (UIGEA) comes in response to a formal complaint filed by the Remote Gambling Association (RGA), submitted to the EU in December of 2007.

The RGA has filed the complaint on the grounds that the UIGEA forced an armada of European gambling companies to pack up their belongings and withdraw their services from the United States. There are currently 30 online gambling concerns that are members of the RGA: Betfair, 888, PartyGaming, William Hill, Ladbrokes, Microgaming, Playtech and Crpytologic are only some of the many companies affiliated with the RGA, which is currently based in London.

Their main argument is that the US should not be allowed to enforce gambling laws retroactively and selectively against foreign suppliers. Simply put, the US had WTO commitments pertaining to online gambling at the time they passed the UIGEA and so as soon as the law was brought into effect they were in breach of international law.

Peter Mandelson, the EU Trade Commissioner, announced during the launching of the probe that, “The US 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.”

Also releasing statements on why the RGA has filed complaints is their chief executive Clive Hawkswood who said, “We cannot simply sit on the sidelines and watch while our members, who are already badly bruised by unlawful U.S. acts, suffer the double whammy of being prosecuted for activities whilst U.S. industry is not.

“By any analysis, the U.S. policy is fundamentally unfair, and we are delighted that the commission shares our concern. The U.S. simply needs to end its discriminatory prosecution of EU companies, and their shareholders, who have after all been out of the US market for almost two years now.”

The current EU probe that got underway yesterday is expected to last anywhere from five to seven months and will produce a report that could launch a series of World Trade Organization proceedings by the European Union against the United States. Antigua, who has been engaged in a drawn out battle with the United States over the same legislation and has also been using the WTO as mediator, already filed for WTO arbitration along with Costa Rica. Antigua had been hoping that the EU would join the fight and have now gotten their wish.

Is this the beginning of the end for the UIGEA? In the last week alone the EU, the American Banking Association (ABA), a US Congressman and even a Federal Judge all spoke out against the UIGEA or have made moves to modify, possibly even ban, the discriminatory legislation. Hopefully the mounting pressure will finally reverse the original decision, reopening the poker market for US citizens who anxiously await the chance to play poker legally, instead of like criminals.