The European Union decided this week to launch an investigation that would explore whether the United States was following a policy of discrimination.

This discrimination involves the prosecution of foreign online poker and casino companies.

The investigation, launched Monday, comes after several top industry companies such as BWIN Interactive Entertainment and PartyGaming complained officially to the European Union about what they claim is an unfair policy on the part of the United States. The investigation could pave the way for possible action at the World Trade Organization, a body that traditionally settles disputes of these kinds. 

The main complaint by online poker and casino companies against the United States is that they single out foreign companies for prosecution but generally turn a blind eye to local internet gambling activity. As a result, the European Union said in a statement this week, that the investigation of these complaints could take half a year and may very well lead to a decision to launch World Trade Organization proceedings against the United States. 

Peter Mandelson, the European Union Trade Commissioner, speaking for the organization, was very clear about the EU’s stand in the matter: “The U.S. has the right to address legitimate public policy concerns relating to Internet gambling, but discrimination against EU companies cannot be part of the policy mix,” he said. 

The European Union reached an agreement with the United States in December after the latter withdrew from its World Trade Organization commitments to open up its borders to foreign competitors. In 2006, the United States took its policy one step further by introducing the controversial Unlawful Internet Gambling Enforcement Act. In one penstroke, millions upon of millions of dollars were lost off global stockmarkets as poker and casino company shares plummetted, with many still trying to recover today. 

After taking the matter to the WTO, the European Union finally accepted a US offer to open other trade sectors in its economy as compensation. The decision did not satisfy European gambling companies, however, who were still being prosecuted in cases brought against them before the new measures were brought into effect. The European Union has assured US trade officials that the two cases were unrelated and that the December compensation package would not be affected.  

The Chief Executive of the European Remote Gambling Association summed up the situation: "By any analysis, the U.S. policy is fundamentally unfair, and we are delighted that the Commission shares our concern and alarm. The U.S. simply needs to end its discriminatory prosecution of EU companies, and their shareholders, who have after all been out of the U.S. market for almost two years now." 

Author:  Renee Kingsley