EU Internet Gaming Companies Seek Formal Probe Of U.S. Trade PracticesEU Internet Gaming Companies Seek Formal Probe Of U.S. Trade Practices

A trade association representing European Internet gambling companies is filing a formal complaint against the United States, charging that the country discriminates by prosecuting foreign gambling companies.

The Remote Gambling Association alleges that the U.S. Department of Justice has discriminated and violated World Trade Organization rules by threatening and prosecuting criminal cases, seeking forfeitures, and enforcing other penalties on foreign gaming companies, while not prosecuting U.S. online gaming operators, primarily those that facilitate racetrack betting.

"If the U.S. discrimination continues, a terrible blow will be dealt to free trade worldwide and the WTO process will be weakened to the detriment of all countries," Nao Matsukata, a trade analyst with Alston & Bird in Washington, D.C., and a former Bush administration trade official, said in a statement.

The RGA targeted the U.S. Unlawful Internet Gambling Enforcement Act, or UIGEA, which it says outlawed online gaming provided by foreign operators while providing exemptions for domestic operators.

In addition to suffering or fearing prosecution, companies on the EU stock market lost billions in combined market value overnight when the UIGEA took effect, but U.S. companies did not suffer, the RGA said.

"How would U.S. investors and businessmen feel if they invested in a business in the United Kingdom based on international law commitments, and then suddenly the U.K. not only passed new laws forcing them to shut down their business, but then tried to throw them in jail for past activities while still allowing their domestic competitors to continue on doing the same thing?" asked Clive Hawkswood, the chief executive of the RGA.

The RGA stated that the Justice Department hasn't prosecuted U.S. online gaming companies.

The RGA complaint, filed under the EU Trade Barriers Regulation, asks the European Union to investigate discriminatory enforcement as an illegal barrier to trade. The complaint forces a formal investigation and a finding. If the investigation finds discrimination, the European Union will decide on whether to negotiate with the United States. If that fails, the EU can proceed with a WTO case.