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European Commission questions U.S. gambling policies

Posted: Thursday, June 11, 2009 3:52 PM

by Frank Angst

The European Commission accuses the United States of continuing to fall short on its World Trade Organization (WTO) obligations by continuing to deny access to foreign-based gambling providers.

The commission published its full report on Wednesday in the long-standing dispute, which says the U.S. is violating various trade laws by prohibiting its citizens from Internet gambling with European Union-based sites.

In 2006, the United States passed the Unlawful Internet Gambling Enforcement Act, which calls on financial institutions to block financial transactions between U.S. customers and gambling sites. But that law listed several exceptions, including pari-mutuel wagering.

The U.S. Justice Department also has prosecuted operators of European-based sites based on the Wire Act of 1961. While the Justice Department does not recognize the legality of pari-mutuel wagers on the Internet, it has taken no action against the U.S.-based operators of advance deposit wagering sites.

The exception for horse racing is one of the inconsistencies in U.S. law that the European Commission has cited in arguing that U.S. policies are inconsistent and violate trade agreements.

“Internet gambling is a complex and delicate area, and we do not want to dictate how the U.S. should regulate its market,” said European Union Trade Commissioner Catherine Ashton. “However, the U.S. must respect its WTO obligations. I hope that we will be able to reach an amicable solution to this issue."

While the United States Congress currently is considering repealing the Unlawful Internet Gambling Enforcement Act, law enforcement officials continue to take action against offshore gambling sites. According to an Internet poker players’ group, the federal prosecutor for the Southern District of New York has frozen payment processor accounts of 27,000 players amounting to $30-million at four offshore poker sites.

According to the Poker Players Alliance, the seizures were made this month based on violations of both the Wire Act and the Unlawful Internet Gambling Enforcement Act. The involved seizures involved accounts held by Allied Systems and Account Services at banks including Citibank, Wells Fargo, and two smaller banks.

The alliance said that a letter from the prosecutor said the accounts were subject to forfeiture, “because they constitute property involved in money laundering transactions and illegal gambling offenses.”

Frank Angst is senior writer for THOROUGHBRED TIMES