Trade with EU at Risk, US Lawmakers Warn

If the US Justice Department insists on continuing its pursuit of European online gambling companies that operated in the US market before the Unlawful Internet Gambling Enforcement Act came into effect in 2006, Washington could face a potentially damaging trade dispute with the European Union at the World Trade Organization, two US lawmakers have warned.

European Internet gambling sites such as PartyGaming and 888 lost billions of euros in market value when the UIGEA came into effect, effectively closing the US market to free trade in the gaming industry. Companies that are traded publicly on the London Stock Exchange and are regulated chose to withdraw from the market rather than risk violating US law, yet prosecutors in Washington still seek to press charges from before 2006.

The forecast
"In all likelihood, this issue will escalate and, I understand, could result in WTO action focused specifically on how the US government enforces its laws. I cannot see how that can be in the interests of this country," wrote Rep. Robert Wexler, a Florida Democrat, to US Attorney General Michael Mukasey.

In a separate letter to Mukasey, Tennessee Democrat Rep. Steve Cohen said the Justice Department had yet to come up with a good reason for investigating "foreign operators who respected congressional intent in 2006 and withdrew from the market, while US companies continue to operate uninterrupted."

Next round of talks
The warnings come on the backdrop of the postponement of meetings, scheduled for July, between US trade representative and a delegation from the EU following complaints by the Remote Gambling Association regarding the discriminatory manner in which US law is being enforced. The EU officials will travel to the United States in September instead.