Online Gambling

EU Claims $100 Billion in Online Gambling Monies Lost by US Law

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The European Union will ask the United States to pay $100 billion in trade concessions due to last year’s passing of the UIGEA in the US that the WTO ruled as a violation of global trade rules.

Antigua requested a payment of $3.4 billion earlier in the year and analysts believe they will be awarded that compensation by means of the WTO being allowed to sell pirated versions of copyrighted software, music, and videos.

The European Union, which consists of many major European countries, will also go after the same concessions and the $100 billion they requested is by far the largest settlement the WTO has ever handled.

“The $3.4 billion claim by Antigua and the much larger claim of potentially over $100 billion by the seven economies seeking compensation are some of the largest penalties in the history of the WTO,” said Naotaka Matsukata, a senior policy advisor with Alston & Bird.

The Internet gambling issue that has brought this whole debacle on, powered by religious conservatives who lobbied US lawmakers last year, could destroy the World Trade Organization depending on how the United States handles the situation.

“This is by far the most significant WTO case ever and its implications for both the US and the EU are enormous,” said Matsukata. “Given the size of the US gaming market, both the potential benefit for European industry and the corresponding potential damage to US companies is unprecedented.”

Skeptic analysts believe the $100 billion claim by the EU is outrageous as the online gambling industry was estimated to be worth $15 billion in 2005. At least half of all online gambling monies was estimated to be made from American consumers.

The EU, however, claims that each country is represented in the compensation claims and therefore all the countries combined, added to the exponential projected growth of the industry is how they arrive at the $100 billion claim.

Craig Pouncey, a Brussels-based trade lawyer for Herbert Smith LLP law firm, who also testified in Barney Frank’s hearing on whether Internet gambling could currently be regulated sufficiently, said, “One major question is how strong the EU will be in pushing the U.S. for all of the concessions available to it.”

If they do push hard, he suggests that the United States has a good chance at seeing a legal atmospheric change to the Internet gambling industry. The change would be to open up the industry in order to comply with WTO rules of no protectionism.

Barney Frank has also stated that his bill HR 2046, also known as the IGREA, or Internet Gambling Regulation and Enforcement Act, would be seriously helped along if the EU strongly pursues compensation in the WTO case.

All compensation claims by Antigua, the EU, and other countries would be awarded the claims on a yearly basis


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