The present ban placed on online gambling that is currently in force across the United States created by the Unlawful Internet Gambling Enforcement Act (UIGEA) is set to be given a serious challenge this year by a senior Democrat lawmaker, Barney Frank, the Financial Services Committee Chairman for the House of Representatives. This is due to the problems the Act is causing with regards to trade ties between the European Union and the United States.
This follows a report by Reuters that the European Union could even file a complaint at the coming World Trade Organization concerning the enforcement of the United States gambling ban.
Mr Frank is reportedly bringing back legislation that will repeal the unpopular UIGEA, which was passed in 2006 by the Republicans when they controlled Congress. The ban had its supporters, who argued that foreign and offshore registered Internet gambling companies were not only sucking billions of dollars from the U.S. economy, but were harming families and were being used for money laundering.
When the law was passed, online gambling companies that were based in the European Union lost billions from their market as they were pressured to withdraw from what was easily the most lucrative and profitable of their markets. By making it illegal for online businesses to complete online transactions and accepting payments from U.S. citizens via credit cards, online payments and cheques, it effectively barred those businesses from freely trading with the U.S. Frank warned the Bush administration that in times of economic downturn the new rules would place a heavy burden on the industry for financial services, but his words went unheeded.
This caused many of Europe’s publicly traded companies such as Party Gaming and 888.com to withdraw from the U.S. Even so, they still may face prosecution for their activities before the ban was put into place. Party Gaming founder Anurag Dikshit has been in the news recently after pleading guilty to charges of unlawful Internet gambling activities and has agreed to pay fines of $300 million.
In March 2008, acting on a petition by the industry, the European Commission commenced a formal investigation into claims that Washington was making a example of EU companies while allowing the freedom to continue operations by U.S. gambling companies. The investigators’ report is expected to recommend action be taken at the WTO next month. EU officials are expected to utilize the report as a lever to seek negotiations for a solution with the U.S.