Deal Reached on Internet Gambling

The U.S. and European Union have settled over gambling commitments.

The United States and European Union struck a new trade agreement Dec. 18 that will greatly lessen the fight over offshore Internet gambling.

The conflict began with the small Caribbean nation of Antigua, which challenged through the World Trade Organization the fact the U.S. had left gambling off the trade table.  U.S. officials have acknowledged it was an oversight.

Antigua won the WTO challenge, so the U.S. in May withdrew its gambling commitments under the General Agreement on Trade in Services. That in turn led some countries to demand compensation; the EU alone assessed damages at about $100 billion a year.

Many foreign countries allow Internet wagering. The U.S. last year banned “illegal” Internet wagering by outlawing use of credit for that purpose. Pari-mutuel account wagering on horse races is permitted under the Interstate Horseracing Act of 1978.

The National Thoroughbred Racing Association reported the U.S. will grant the EU increased market access in four service sectors--postal and courier, research and development, storage and warehousing, and testing and analysis--to offset losses from the gambling ban.

“The U.S. withdrawal of its WTO commitments in gambling services was the only approach that could meet U.S. treaty obligations, remove the gambling issue from the WTO agenda, and restore stability to the domestic regulatory environment,” NTRA president and chief executive officer Alex Waldrop said in a statement. “The NTRA has long advocated the withdrawal of U.S. gaming commitments. This agreement is a major step toward the conclusion of the WTO dispute involving the U.S. regulation of remote gambling services.”

The U.S. announced it had reached agreement with the EU, Canada, and Japan, and informally with Australia, but not with Antigua, India, Costa Rica, and Macao. Those members have 45 days from Dec. 14 to decide whether to request arbitration on the level of compensation, the NTRA said.