Is Online Gambling Regulation Risky?

July 20, 2008

Trade emissaries from all over Europe are descending on Washington later this month to talk about many things, including online gambling. The European Union is coming to talk to Congress, the Justice Department, etc. about gambling laws that are written into the United States Code.

Depending on how the US answers those questions and how the meeting goes, could determine whether or not trade conflicts come into play afterwards. With several European banks and internet gambling operators finding that they are being prosecuted under the Wire Act for engaging in online gambling, the EU has taken a noted interest in the industry as it pertains to them and the US.

The problem is that many of these prosecutions took place before the Unlawful Internet Gambling Enforcement Act of 2006 went into effect. But not everyone is being penalized. By allowing online gambling as it pertains to horse racing to continue, the US is seemingly selectively prosecuting non US operators only.

This of course means that the Department of Justice is in violation of World Trade Organization rules that say you cannot discriminate. Some of those that they are prosecuting and investigating pulled out of the market as soon as the UIGEA went into force, thereby putting them on the side of right not wrong.

The EU has already started creating a formal Trade Barriers Regulation complaint against the US, and even though the US has brushed it off � this is serious business. Depending on how the visit goes, it will either get worse or better from here, but from the actions of the US government one can only assume it won�t be the latter.

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