The European Union (EU) has launched an investigation into whether US prosecutions of foreign online gambling companies is discriminatory, possibly paving the way for action by the World Trade Organization (WTO).

European online gambling companies such as PartyGaming and Bwin Interactive Entertainment have complained that the US Justice Department singled out foreign online gambling companies. The EU stated that it would now look into these complaints over the next five to seven months and could decide to launch proceedings against the United States.

'The US has the right to address legitimate public policy concerns relating to Internet gambling but discrimination against EU companies cannot be part of the policy mix,' said Peter Mandelson, Trade Commissioner for the 27-nation body.

The United States agreed a compensation deal with the EU in December after withdrawing from WTO commitments to open its gambling markets to foreign companies, a move that wiped billions of dollars off the stock market value of the European sector. As part of the deal, America agreed to make other sectors open to foreign competition but the Department of Justice is still continuing investigations into EU companies begun before this agreement was reached.

The Justice Department stated that it had been assured by the EU that this enquiry would not upset the earlier compensation package.

Europe's Remote Gambling Association (RGA) is welcoming the investigation and stated that companies hurt by the closure of the American market were suffering a ‘double whammy’ of being prosecuted while US rivals were not.

'By any analysis, the US policy is fundamentally unfair and we are delighted that the Commission shares our concern and alarm,' Clive Hawkswood, Chief Executive for the RGA, told the Reuters news service.

'The US simply needs to end its discriminatory prosecution of EU companies and their shareholders who have, after all, been out of the US market for almost two years now.'


Source: iGamingBusiness.com