On the face of it, it looks like good news for the European online gambling operators. The European Union is to press the United States for compensation for its ban on foreign online gambling websites. The World Trade Organisation (WTO), in a case brought by Antigua & Barbuda, has already ruled that the ban imposed is contrary to trade treaties.

With the enactment of the Unlawful Internet Gambling Enforcement Act (UIGEA) last year, online gaming companies lost much of a US$15.5 billion market. Companies such as PartyGaming and Sportingbet had to close their US-facing businesses and share prices plummeted. The WTO has said that the US law is unfairly aimed at offshore betting and any restrictions must also apply to American companies. The EU is joining Antigua & Barbuda in claiming compensation from the US.

Unfortunately it seems likely that the form of compensation being sought will involve the opening of other trade sectors, the online disagreement being used as a bargaining chip. The online gambling sites will probably not regain their foothold in the lucrative US gaming market. In October last year the UK Culture Secretary Tessa Jowell attacked the approval of UIEGA by the US legislature, saying that it closed down reputable Internet gambling sites in favour of poorly regulated operators. (E-06.20.07)

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