US Settles WTO Online Gambling Claims with the European Union

December 18 2007, Amy Calistri

Yesterday Reuters reported that the US had reached a settlement agreement with the European Union (EU), Canada and Japan relative to the US retraction of their online gambling market to World Trade Organization (WTO) trading partners. Although the EU stated that it will also "continue to press for non discriminatory treatment in U.S. internet gambling legislation," the settlement takes pressure off the US to alter its current trade policy relative to online gambling and restrictions imposed by the passage of the UIGEA. The EU announcement drove stock prices of publicly traded online gambling companies lower. PartyGaming shares were down 5.79% on the news.

During the negotiations, a price tag for the EU trade compensation package was estimated at $100 billion. Gretchen Hamel, a spokeswoman for the U.S. Trade Representative's said the deal "involves commitments to maintain our liberalized markets for warehousing services, technical testing services, research and development services and postal services relating to outbound international letters." Hamel declined to disclose the value of the trade concessions that the US had to make to preserve its foreign ban on internet gambling.

While the EU represents the mother load of cost to the US since retracting online gambling from its trade commitments in May the US still has a few compensation deals to be determined. Talks with India, Costa Rica and Macau are still ongoing. Also yet to be determined is the bill owed to Antigua and Barbuda, the tiny island nation that triggered the WTO onslaught of trade claims against the US. Antigua has been holding steadfast for WTO permission to impose $3.44 billion in annual trade sanctions, primarily in the form of copyright infringement of US music, movie and software products. The U.S. has publicly balked at any figure above $500,000 in damages.

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