Foreign Policy

E.U. Condemns America's Online Gambling Crackdown

| by Reason Foundation

Yesterday, in response to a complaint from the Remote Gambling Association, the European Commission (the E.U.'s executive body) issued a report concluding that American policy regarding online betting violates international trade commitments by discriminating against foreign companies.

Gambling website operators want the E.U. to ask the World Trade Organization for $100 billion in U.S. concessions to compensate for their lost revenue. For now the E.U. is inclined to work things out through negotiations, hoping the Obama administration will be more flexible in this area than the Bush administration was.

So far there's little sign of that. As Radley Balko noted yesterday, the Justice Department recently seized or froze $34 million belonging to American poker players because it was in accounts managed by a company that handles payments for poker websites.

Online gambling companies are pushing Barney Frank's Internet Gambling Regulation, Consumer Protection, and Enforcement Act as a way of settling the burgeoning trade dispute (although gambling law expert I. Nelson Rose argues that the bill's provisions regarding back taxes will have a protectionist impact). I discussed the trade implications of the U.S. government's online gambling crackdown in "Some Bets Are Off," a 2008 Reason article.

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