Ever since the imposition of the UIGEA, European online casino operators have lost American players as customers and this amounted to a significant proportion of their business. The European Commission has taken the cudgels on behalf of its online casino industry and has been conducting a probe into the nature and extent of the losses. The Commission will try for a negotiated solution with the United States, but if this does not materialize then the investigating officials are likely to recommend that the matter be taken to the World Trade Organization (WTO). The Remote Gaming Association in the United Kingdom had taken the lead on behalf of the online gaming industry to secure the involvement of the European Union.
Antigua has already taken its case to the WTO and has obtained favorable rulings. The US retaliated by withdrawing its gambling obligations under the GATT at the WTO. It incurred penalties for doing so but has refused to pay them so far. Antigua is trying to obtain a negotiated solution and is hoping for a favorable response from President Obama’s administration. Antigua has even indicated that it is willing to make several concessions from its stated position in order to reach a compromise solution. This is one reason that the European Commission will first deliver its report to the US and try to start bilateral talks aimed at resolving the issue. Many of the leading European countries and the United States are members of the G20, which is a group of 20 emerging and industrial nations. The European Commission does not want to vitiate the spirit of co-operation prevailing amongst the G20 nations by going directly to the WTO. The Commission also feels that the WTO route would be too time consuming and, as in Antigua’s case, prove futile in the end.
The European Commission will be aided by the internal pressure within the US to overturn the UIGEA. Organizations like the Interactive Media Entertainment & Gaming Association and the Poker Players Alliance are in the forefront of the agitation and have taken several important steps. Several influential legislators, like Barney Frank, are also against the bar on Internet gambling. More important is the fact that tax revenues that can be generated by legalizing Internet gambling can add to the exchequer. But the European Commission is facing severe challenges in the home front. Several European countries are protecting state owned gambling operators by making it illegal for private operators to offer online gambling services. UIGEA like laws are on the anvil in such countries. The very same operators that compelled the European Commission to take up the issue against the US are battling national governments in Europe. This will undoubtedly weaken the European Commission’s position when it meets the American authorities at the negotiating table.
