Betting industry wants EU help

The European Commission is coming under intense pressure to take a tough line with the US over its online betting restrictions in a high-stakes game worth tens of billions of dollars.

US betting rules, which bar foreign bookmakers from entering a market worth $100 billion-a-year (€70bn), were deemed illegal earlier this year by the World Trade Organization (WTO) in a victory for the Caribbean twin-island nation of Antigua and Barbuda.

The US responded by withdrawing global trade commitments on gambling made in the mid-1990s. Under WTO rules, member countries can now seek compensation for the unilateral withdrawal.

As a pre-emptive strike, the US has offered multilateral trade concessions but the gambling industry claims they do not match the tens of billions of euros lost in revenue and business opportunities. The current deadline of 22 October for a resolution of the dispute could in theory be extended before the case enters a lengthy arbitration process.

Gaming companies are urging the Commission to press for a lifting of the betting ban. "The US would use all its diplomatic and economic arsenal to [ensure] its market share," said Raul Herrera, a Washington-based lawyer representing online gaming interests.

Antigua and Barbuda is seeking compensation of $3.4bn (€2.4bn) for losses incurred by its sector. Herrera estimated EU losses at 20-30 times that amount.

"The offer on the table so far from the US needs to be improved," said a Commission official. In what might come as a blow to gaming companies, however, he said that the solution would not necessarily include a repeal of the ban. "We will require compensation in the services industry and if it’s not in the area of betting then it could be in other areas," he said.

Other countries including Australia, India, Canada and Japan are said to be watching closely for the EU’s next move. At stake, says the industry, is the credibility of the US as a trading partner. "The EU needs to draw a line in the sand. If not, it will only encourage the US to do the same again," said Clive Hawkswood of the UK-based Remote Gambling Association.

The arbitration process, a Gordian knot of complex and conflicting trade interests, could take 12-18 months.

The European Commission is coming under intense pressure to take a tough line with the US over its online betting restrictions in a high-stakes game worth tens of billions of dollars.