EU calls on U.S. to drop gambling ban

Jun 11, 2009 1:58 AM
Staff & Wire Reports |

The European Union urged the United States on Wednesday to open talks on scrapping a ban on foreign online gambling companies, saying it breaks global trade rules.

The EU says it could seek compensation from the World Trade Organization because the 2006 ban unfairly prevents foreign Internet gambling sites from operating in the United States.

But it said it would hold off launching legal action until it had the chance to negotiate a solution with President Barack Obama's administration - another sign of a thaw in EU-U.S. relations since President George W. Bush left office.

The European Commission said the U.S. ban shut out gambling sites such as Britain's PartyGaming PLC and Sportingbet PLC from the lucrative $4 billion U.S. market, causing companies to lose revenue and stock market value.

About half the world's online gamblers are based in the U.S.

Gambling companies claim the ban lost them up to $100 billion and have urged the EU to seek that amount of compensation in trade concessions under WTO rules.

They say it was unfair that European companies could not operate in the United States while U.S. companies like Las Vegas Sands Corp. were free to offer Internet games to Europeans. Sands spokesman Ron Reese said Wednesday, however, that the casino company doesn't offer any Internet gambling at all, and doing so would violate U.S. law.

The EU said it could still sue the U.S. for breaking WTO rules, even though Washington wants to pull out of international commitments to open up its gambling and betting market.

But EU officials want to avoid provoking the U.S. because they are hopeful that Obama will join a renewed push to strike a new WTO deal that would open up world trade, currently in free fall as recession in rich nations slashes demand for imported goods.

The EU and U.S. recently agreed to end a long-running row on hormone treated beef that was aggravated by a U.S. move to add trade charges to a long list of European products - from French Roquefort cheese to chewing gum - days before Bush left office.

Obama also has sought to assure the EU and Canada that "Buy America" provisions in the U.S. economic stimulus package would not spark a trade war by favoring U.S. steel, iron and manufactured goods for government projects over foreign suppliers.

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