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6/11/2009
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EU Urges US To Drop Ban On Online Gambling

It believes U.S. laws on Internet gambling are a violation of international trade laws.

The European Commission has raised the ante in its high-stakes battle with the United States over online gambling. Maintaining that U.S. laws on Internet gambling violate global trade regulations, the European Union on Wednesday urged the United States to drop its ban on non-U.S. online gambling companies.

The EU action follows action earlier this week by the Department of Justice to freeze the accounts of some 27,000 online poker players. The rapid-fire developments focus more attention on proposed legislation by Rep. Barney Frank, D-Mass., that would regulate online gambling and remove many of the problems associated with it.

"The European Commission report provides yet another reason why the administration and Congress should support pending legislation to regulate Internet gambling, which would resolve the trade agreement violation and better protect consumers," said Jeffrey Sandman, spokesman for the pro-gambling Safe and Secure Internet Gambling Initiative.

Noting that it believes U.S. gambling regulations passed during the Bush administration violate global trade laws, the EU indicated it could seek compensation from the World Trade Organization on the issue. The EU said it believes the law's ban prevents foreign gambling sites from operating in the United States in violation of international trade laws.

The EU report, however, suggests the differences between gambling interests and the U.S. federal government could be ironed out amicably through negotiations. The Frank legislation represents a vehicle to comprehensively re-examine online gambling and formulate new approaches that would not only include safeguards for consumers, but also provisions to guard against money laundering and compulsive and underage gambling, as well as safeguards against fraud and identity theft.

About half of online gamblers are located in the United States, although much of the industry infrastructure is located in the United Kingdom, Costa Rica, and Antigua. Many company headquarters are located in the United Kingdom, while call centers are situated in Costa Rica. Many gambling transactions are carried out on servers in Antigua to avoid U.S. jurisdiction.

At the moment, all gambling eyes are focused on the Frank legislation, which could resolve many of the problems facing the multibillion-dollar industry.


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