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Online Gaming Firms Take Action Against U.S.
by Peter Stiff
20 December, 2007



European online gaming firms are filing a formal complaint against the United States for discrimination after their controversial exit from the U.S. market.

The companies say that the U.S. Department of Justice has violated international trade law by kicking them out of the market and taking legal action while allowing domestic online gaming operators to continue trading.

The move by the Remote Gaming Association (RGA) comes only days after the European Union agreed a trade deal with the U.S. to compensate the bloc for loss of earnings from gaming.

European online gaming firms, such as PartyGaming, and Sportingbet, have been hit hard after they were forced to stop doing business in the lucrative U.S. market following a rule change last year.

“We have been left with no choice but to pursue all legal avenues available to challenge the U.S. Department of Justice for its discriminatory enforcement activities against European online gaming operators,” Clive Hawkswood, the chief executive of the RGA, said.

The group has asked the EU to investigate the situation, arguing that although the U.S. has repeatedly stated that all forms of online gambling are illegal, it has enforced this view only with non-U.S. businesses.

“How would U.S. investors and businessmen feel if they invested in a business in the UK based on international law commitments, and then suddenly the UK not only passed new laws forcing them to shut down their business but tried to throw them in jail for past activities, while still allowing their domestic competitors to continue on doing the same thing?” Mr. Hawkswood said.

Last year the U.S. Congress made it illegal to make payments to online gambling sites, and in May this year the U.S. said that it was excluding gambling services from market-opening commitments it made as part of a 1994 world trade deal.

The Department of Justice has subsequently threatened and carried out legal action against European firms.

On Monday a trade compensation deal was agreed between the EU and the U.S. that will allow European companies access to the U.S. postal market and warehouse sector as compensation for the lack of access to gaming.

The European gambling industry had hoped that the EU would push the U.S. into allowing it back into the U.S. market.

Although the trade deal gave compensation, it did not deal with the legal side of the dispute, the RGA says.

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