EU to Investigate UIGEA – Possible WTO Action to Come

Reuters reported today that the European Union has announced they are launching an investigation into US online gambling law, to determine if it breaches international trade law. The announcement paves the way for likely WTO action in future months.

The EU had previously accepted an offer from the US as compensation for closing the US gambling market to EU companies; however, today's report appears to suggest that the EU may ultimately take legal action against the US for continuing to prosecute European online gaming companies whilst protecting their own domestic online betting industries.

Responding to complaints from European betting giants PartyGaming and Bwin, EU Trade Commissioner Peter Mandelson said in a statement:
"The U.S. 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. We are interested in a constructive and mutually satisfactory solution to this issue."

PartyGaming and 888 are currently in extended legal negotiations with the US Department of Justice over their activities in the US pre-UIGEA. Both companies withdrew from the US market following the UIGEA, and the US DoJ has apparently seen it fit to continue to prosecute.

The European Commission announced it will investigate the complaints this year with possible subsequent WTO proceedings now a distinct possibility.

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