EU calls on US to drop gambling ban

The European Commission has published its report on US laws on remote gambling and their enforcement against EU companies. This report is the outcome of an investigation into United States measures affecting foreign suppliers of Internet gambling services.

The report concludes that the US measures constitute an obstacle to trade that is inconsistent with WTO rules. As a result, WTO proceedings would be justified. At the same time, the report suggests that the issue should be addressed with the US Administration, with a view to finding a negotiated solution.

However, it said it would hold off launching legal action until it had the chance to negotiate a solution with President Barack Obama's administration - another sign of a thaw in EU-U.S. relations since President George W. Bush left office.

The European Commission said the US ban shut out gambling sites such as British PartyGaming PLC and Sportingbet PLC from the lucrative us$ 4 billion US market, causing companies to lose revenue and stock market value. About half the world's online gamblers are based in the US.

Gambling companies claim the ban lost them up to us$ 100 billion and have urged the EU to seek that amount of compensation in trade concessions under WTO rules. They say it was unfair that European companies could not operate in the United States while US companies like Las Vegas Sands Corp. were free to offer Internet games to Europeans. Sands spokesman Ron Reese said Wednesday, however, that the casino company doesn't offer any Internet gambling at all, and doing so would violate US law.

The EU said it could still sue the U.S. for breaking WTO rules, even though Washington wants to pull out of international commitments to open up its gambling and betting market. But EU officials want to avoid provoking the U.S. because they are hopeful that Obama will join a renewed push to strike a new WTO deal that would open up world trade, currently in free fall as recession in rich nations slashes demand for imported goods.

The EU and U.S. recently agreed to end a long-running row on hormone treated beef that was aggravated by a U.S. move to add trade charges to a long list of European products - from French Roquefort cheese to chewing gum - days before Bush left office.

Obama also has sought to assure the EU and Canada that "Buy America" provisions in the U.S. economic stimulus package would not spark a trade war by favoring U.S. steel, iron and manufactured goods for government projects over foreign suppliers.