Online Casino

When the US made its sweeping ban on all online gambling in 2006 with its controversial Unlawful Internet Gambling Enforcement Act (UIGEA), the ramifications for other countries who continued to allow online gambling were not considered.

The imposition of the online gambling ban had a wide ranging negative effect on the fortunes of many European based companies that derived a good deal of their revenue from online gambling customers based in the United States. Great losses were suffered by many of these companies, so in order to placate the growing unrest in the European parliament, the US set out provisions for trade concessions to redress the imbalance.

In 2006, the presiding US government was led by the Bush Administration which passed the infamous UIGEA. This led to the blocking of American based credit card companies and banks from processing any payments that related to online gambling websites. The sticking point of this was that despite this ban affecting both international and US based online gambling companies allowances were made so that US citizens could still place bets online with American based companies that provided the facility for horse racing and dog racing online. Clearly this was a restrictive practice favouring one sector of the industry while penalising the other.

The WTO (World Trade Organisation) agreed and in March 2007 it ruled that the ban imposed by the US on online gambling was illegal. The ruling by the WTO stated that even though the United States had the right to provide protection for its own citizens from such activities that is may view as being immoral, it did not have the right to penalise foreign companies in the process. To make matters worse, that discrimination made against companies not based in the United States contradicts the existing trade agreements that were signed between the United States and other countries. This had the effect of stifling the very same free trade opportunities which the trade agreements had been set up to promote.

Concessions were therefore made in warehousing as well as mail services which had the effect of opening up many new market opportunities in the US for many European companies who trade in a variety of different sectors of industry. These include research and development companies that provide services for testing and analysis. Although this agreement goes some way to improve the fortunes of companies involved in postal, despatch and courier services that do a lot of business in the United States, it did not encompass the interests of European based online gambling companies such as PartyGaming and Playtech who have made the decision to pull out of the US online gambling market altogether until the ban is repealed. Such companies feel let down by the EU politicians who accepted the deal which was brokered without consideration to the very industry that the US ban affected most of all.  

When you look at the financial figures, it is easy to see why many Internet gambling companies are extremely upset. Being one of the most rapidly growing markets, Internet gambling is currently valued with a total gross yield of US$20 billion and the fact that around half the online gamblers in the world are based in the United States it is a huge loss to carry for the European companies.

With the new Obama administration having taken office at the end of 2008, there is a great deal of speculation within the online gambling industry that the 2006 UIGEA will be overturned and a fairer and better designed proposal put in its place. With the very real prospect of
Congressman Barney Frank setting the wheels of change in motion by introducing new, positive Internet gambling legislation as early as the third quarter 2009 the online gambling industry is preparing itself for an early return to the United States. 

In addition to European based companies, those based in Antigua & Barbuda, Macau, India, Australia, Japan, Costa Rica and Canada are also WTO members that are seeking compensation to cover the loss of revenue inflicted by the gambling restrictions enforced by the UIGEA. They too will stand to benefit hugely from an about turn in the US online gambling laws should they come to pass and be more flexible in the way that they are worded.