British government endorses US regulation of Internet gambling

As the contentious trade dispute between Europe and the US over Internet gaming industry continues, the British Government said it favored US regulation of Internet gambling as opposed to prohibition.

„The British Government has signaled quite clearly its support for regulation rather than prohibition of gambling by the recent implementation of the (Unlawful Internet) Gambling Act,“ said Emily Bourne, private secretary of the British Department for Business Enterprise and Regulatory Reform in a letter to several financial service and gambling companies.

Europe’s trade director and other trade experts acknowledge that legislation introduced by Representative Barney Frank, the Internet Gambling Regulation Enforcement Act, could resolve the potential USD 100 billion gambling dispute and bring the US into compliance with international trade agreements by creating a level playing field among domestic and international operators.

During a recent visit to Washington, European Union Trade Commission Peter Mandelson said that the US Congress should either open its market to overseas operators or compensate Europe for blocking the American gambling market to European operators.

„You will no doubt have been encouraged to read the recent media reports of Commissioner Mandelson’s visit to Washington, which the Secretary of State thinks reflects the level of interest at the Commission in the U.S.’s approach to gambling,“ added Bourne.

„Rather than negotiating away settlements that could negatively impact the U.S. economy, the Administration and U.S. Congress should seek a more sensible policy solution and regulate Internet gambling,“ said Jeffrey Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative.

„As the British Government has correctly acknowledged, it is clear that the futile approach by the U.S. to prohibit Internet gambling is a failure. Regulation of Internet gambling could bring the U.S. into compliance with W.T.O. requirements, protect consumers and generate billions in revenue needed for critical government programs.“

The trade dispute over Internet gaming resulted from Antigua’s World Trade Organization (WTO) victory over the US earlier this year. After the WTO ruled that the US had violated trade rules in barring Antiguan online gaming operators from the US market, the country withdrew its WTO obligations with regard to free trade in the gaming area.

The US withdrawal allows Europe and other countries to demand trade concessions up to the size of the entire sector on an annual basis. Because the US gaming industry is worth us$ 100 billion, the EU theoretically could seek that amount in trade concessions. Already, the two parties have agreed to extend settlement discussions twice because they could not agree on the size of the concessions.

If the parties cannot settle the matter themselves, the EU could demand a binding arbitration before a WTO panel. Separately, Antigua is involved in arbitration with the US to determine the size of the compensation due it. Other countries seeking compensation include India, Costa Rica, and Canada.

The Safe and Secure Internet Gambling Initiative promotes the freedom of individuals to gamble online with the proper safeguards to protect consumers and ensure the integrity of financial transactions.