EU, U.S. strike online gambling compensation deal

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According to a press release, the European Union and the United States have agreed on a compensation package for the United States' withdrawal of online gambling and betting services from its World Trade Organization commitments.

The WTO deadline for the two to come to an agreement was Friday; otherwise the EU could have asked for the matter to be settled by a WTO arbitration panel.

Instead, a bilateral agreement was signed in Geneva. The agreement provides EU service suppliers with new trade opportunities in the following U.S. sectors:

  • Postal and courier
  • Research and development
  • Storage and warehouse
  • Testing and analysis services

The European Union will also continue to press for non-discriminatory treatment in U.S. Internet gambling legislation.

The agreement follows several months of negotiations after the United States announced its intention to withdraw from its WTO commitments around online gambling and betting services.

The General Agreement on Trade in Services allows members to modify or withdraw commitments, but in doing so the nation withdrawing commitments opens itself up to compensation claims from other WTO members.

The EU was being pressured by the online gambling industry there to ask for as much as $100 billion in compensation. The gambling industry had hoped the EU would push the United States into opening up its online gambling market rather than settling.

"We're disappointed but not surprised," said Clive Hawkswood, Remote Gambling Association chief executive, in a Times Online article. "We're hoping this isn't the last word on the subject."

Antigua and Barbuda, which initiated the online gambling case with the WTO, is asking for $3.44 billion annually in compensation. It is currently waiting for a decision from a WTO arbitration panel on what it will get in compensation.

Once the United States settles all its compensation claims and they are certified by the WTO, gambling services will no longer be covered by the U.S. WTO commitments.

The European Commission, however, doesn't see this as an end to the issue. It will seek a non-discriminatory policy toward Internet gambling in the United States.

"While the U.S. is free to decide how to best respond to legitimate public policy concerns relating to Internet gambling, discrimination against EU or other foreign companies should be avoided," said Peter Power, EU spokesman for trade.

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