US Gambling Ban Draws Ire of the European Union

US Gambling Ban Draws Ire of the European Union

On the eve of an action that could very well result in the complete repeal of the Unlawful Internet Gambling Enforcement Act of 2006, many places around the world are starting to make their displeasure with this particular piece of legislation felt.

Chief amongst these international groups is the European Union, ostensibly one of the closest allies of the United States of America. Relations between the United States and the European Union have been strained over a number of issues recently such as the fighting of terrorism worldwide and the US war in Iraq. However, these larger issues have obscured the heated exchanges that have often occurred between both political entities over the UIGEA and the repercussions that it has had.

To best follow these repercussions, it is ideal to consider the example of two major online gambling companies that people will definitely have heard of before. The first of these companies is Party Gaming, owners of Party Poker in addition to many other gambling sites carrying the Party brand. The second company is, a company that is behind the world famous Casino-on-Net as well as the less famous but still large online poker website known as Pacific Poker. Both online poker companies are traded publicly in Europe and both had operations in the United States from the moment of their inceptions as companies and websites.

That all changed in 2006 when the United States House of Representatives passed the Unlawful Internet Gambling Enforcement Act. The UIGEA was an attempt by policy makers in the country to dictate what Americans could and could not do in their household, a point that was freely admitted by many Republican congressmen at the time. Since the companies that deal in online poker were mostly offshore from the US perspective and therefore immune to US-passed regulation, the House of Representatives ended up passing a UIGEA that made it illegal for banks, credit card companies and other financial institutions such as online payment processors to make payments to sites that were classified as being under the banner of online gambling.

Almost immediately upon this happening, both Party Gaming and decided to pull out of the US market. This decision was taken primarily to safeguard their investors, a point that is driven home when one notices that privately held European online gambling companies decided to stay in the American market even after the passing of this legislation. However, the US would like to hold these companies responsible for the actions they took before the act was passed, something that the European Union tersely objects to. The case will be taken to the WTO and if a positive ruling is passed by the WTO in favour of the European Union, the matter could ultimately lead to sanctions against the United States by the European Union.

Such a move is years away however and in the meantime the US is free to push forward actions against companies such as Party Gaming and, much in the same way that they pushed the investigation against online payment processor NETeller, seizing funds in its US-location almost overnight.

July 1, 2011 by : posted in Gambling and Legality No Comments