EU begins formal probe into US gambling ban

Free trade? We've heard of it

By John Oates • Get more from this author

Posted in Government, 30th May 2008 15:33 GMT

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The European Commission is launching a formal investigation into the US ban on online gambling.

The Commission has sent a list of questions to US officials aimed at finding out if the US policy is discriminatory against European firms or not, according to Inside Trade.

The US banned online gambling in 2006 using legislation which was tacked onto the Safe Port Act which provided funding to make ports safe from terrorists. Several firms saw their share prices collapse as a result.

But worse was to come. Neteller, the payments processing company, saw its users' accounts frozen and its shares suspended when two executives were arrested. Sportingbet also had executives arrested while they were passing through US airports.

The Caribbean island of Antigua won a WTO ruling that US rules were discriminatory. Antigua was awarded $21m in December.

In December last year the US agreed to pay the EU, along with Canada and Japan, compensation rather than allow foreign firms access to the juicy US market. Some kinds of gambling, like state lotteries and horse racing, are allowed in the US.

And now Turkey is getting involved too. Turkish authorities arrested two UK-based Sportingbet employees who were on holiday in the country. According to reports some 37 people working for the company's Turkish office have also been detained. Turkey passed laws in February banning "unauthorised" companies from offering gambling services to Turkish citizens.

Sportingbet gets 14 per cent of its gaming revenue from Turkey. The company said it was aware of arrests at its Turkish offices, those of its ex-marketing company. It said two UK-based executives, Turkish nationals, had been arrested while on holiday. But Sportingbet said it had not had any official notification from Turkish authorities. ®

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