EU to Seek Compensation from US, Other Countries may Follow

19 June 2007

The European Union told the United States today that it wanted compensation for last year's ban on foreign gambling sites that forced British gaming companies out of the most lucrative region, worth $15.5 billion.

An unnamed EU official cited by the AP, however, said Europe would seek to open up other trade sectors, which would likely not result in gambling sites being allowed back into the U.S. market.

"We need new concessions that would be equal with the benefits lost," the official said.

Initial negotiations would focus on measuring the loss to European businesses, he added.

The EU's move follows a World Trade Organization (WTO) ruling in March in the years-long case between the United States and the Caribbean nation of Antigua and Barbuda (Antigua) that said U.S. online gambling laws violated international trade agreements. The United States subsequently announced it would remove gambling altogether from it commitments to the General Agreement on Trade in Services (GATS), opening itself up to claims for other countries seeking compensation.

"It will be interesting to see how this plays out, but I would consider this another poorly thought-out strategy by the U.S. that is going to prove extremely problematic very quickly," said Mark Mendel, counsel for Antigua.

IGN has learned that there are between three and six additional countries that are still likely to file expressions of interest with the United States.

More on this soon.