After a disappointing compensation deal that was recently struck between the United States and the European Union in order to settle the issue of the US halting all online gambling other than horse and dog racing, European online gambling companies have begun to file a discrimination complaint against the Americans.
The companies have claimed the US Department of Justice violated international trade law. This claim is legitimate, considering that the US Congress banned online gambling in the United States yet allows it to continue with domestic online gaming operators. The current legislative exemption allows Internet betting in the US on horse racing only and in person bets on dog races.
The most current formal complaint that was filed this morning by the various European online gambling operators for claims of discrimination and violation of international trade law will certainly push US lawmakers to seriously consider how to regulate their online gaming industry.
There are currently two main options that US lawmakers could choose. The first is that they could choose to do nothing and continue to face lawsuits from foreign gaming companies who were basically kicked out of the US market. Their second option is that they could hop onto Representative Barney Frank’s (D-MA) proposed Gambling Regulation and Enforcement Act which would make online gambling safe and legal for everybody in the United States.
The various online companies that are challenging the United States have every right to do so and should continue to pressure US lawmakers. “This complaint complements the current legislative initiatives led by Representative Frank," said Nao Matsukata, formerly Director of Policy Planning for USTR Robert Zoellick and now a Senior Advisor for Alston and Bird LLP."It is consistent with the effort to establish a non discriminatory market in the United States."
The move to challenge the United States is originating from the Remote Gaming Association (RGA). The RGA represents the largest remote gambling companies in Europe. Their complaint stems from an increasingly contentious trade dispute that originated in Antigua’s WTO victory over the US earlier this year. After the WTO had ruled in favor of Antigua stating that the US was in violation of international trade law the US withdrew is WTO obligations in the realm of online gambling, and instead of complying with the decision they came up with a compensation package with various countries including Japan, Canada, Australia and the EU.
"The U.S. decision to pursue the compensation negotiations with these countries was unfortunate," Matsukata said."This filing by the RGA is a welcome development; it is an effort to restore integrity back into the international trading system."
The WTO has yet to decide on the demand from Antigua and Barbados for $3.4 billion in annual compensation from the United States. The fact that there is still resistance from lawmakers in the United States towards regulating the online gaming industry is bordering on the absurd. US residents currently account for nearly half of the estimated $12 billion global market for online gaming.
According to the RGA the trade deal that the US gave in compensation for closing off their online gaming industry did not deal at all with the legal side of the dispute. Hopefully for US online gamers the RGA will continue to pressure US lawmakers until they give in and open up the market again.