EU seeks compensation from US for banning online gambling

UK online gaming operators such as Sportingbet and Leisure & Gaming were forced to quit the profitable US market last year when Washington stopped US banks and credit card companies from processing payments to online gambling businesses outside the country.

The decision closed off the most lucrative region in a market worth us$ 15.5 billion last year. About half of the world’s online gamblers are based in the US. But an E.U. official said the concessions Europe was looking for would likely be "commitments" to open up other trade sectors, meaning gambling sites wouldn’t win their way back into the U.S.

"We need new concessions that would be equal with the benefits lost," he said.

Initial negotiations would focus on measuring the loss to European businesses, he said, warning that talks would take some time. The World Trade Organization ruled in December that the law unfairly targeted offshore casinos, telling the US it could keep restrictions against sport betting in place if they were also applied to US businesses.

The E.U. - the world’s largest consumer market - joins Antigua and Barbuda in seeking compensation. The twin-island nation argued that online gambling had provided income for hundreds of its citizens and was helping to end its reliance on tourism, which was hurt by a series of hurricanes in the late 1990s. The tiny Caribbean nation said Wednesday that it was entitled to us$3.44 billion on in compensation for its losses.

After losing the case, the US announced that it would take an unprecedented legal step to change the international commitments it made as part of a 1994 treaty regulating the trade in services among the 150 members of the WTO. As a result, the United States declined to challenge the WTO ruling, because it says that its legal maneuver effectively ends the case.

US lawmaker Barney Frank, the Democrat Congressman who chairs the committee that oversees financial services, introduced a bill in April that would reverse the Unlawful Internet Gambling Enforcement Act - but his plan faces long odds in Congress, and likely opposition from the Bush administration.