EU launches probe of US online gambling restrictions

(BRUSSELS) - The European Commission launched an investigation Monday into allegations that a US online gambling ban discriminates against EU firms, an action that could lead to a WTO case.

The European Union's executive arm said it would try to find out whether the US restrictions break international trade rules and raise the matter with Washington.

After a probe likely to run five to seven months, the European Commission can decide to launch a case against the United States at the World Trade Organisation.

"The US has the right to address legitimate public policy concerns relating to Internet gambling but discrimination against EU companies cannot be part of the policy mix," EU Trade Commissioner Peter Mandelson said in a statement.

"We are interested in a constructive and mutually satisfactory solution to this issue," he added.

The Remote Gambling Association, an industry organisation, lodged a complaint in December with the European Commission, accusing the US Department of Justice of discriminating against foreign online gaming operators.

In particular, it alleged that the DOJ has sought to enforce a controversial US ban on Internet gaming in the United States by prosecuting foreign operators while turning a blind eye to some domestic rivals, especially for horse betting.

"As the industry trade association, we cannot simply sit on the sidelines and watch while our members, who are already badly bruised by unlawful US acts, suffer the double whammy of being prosecuted for activities whilst US industry is not," RGA chief Clive Hawkswood said.

"By any analysis, the US policy is fundamentally unfair and we are delighted that the Commission shares our concern and alarm," he added.

The US restrictions have fuelled frictions with some of the US' trade partners and Washington has already suffered a defeat at the World Trade Organisation in a case brought by the tiny Caribbean islands of Antigua and Barbuda.

In December, Washington said it would widen access to some of its services markets to compensate the European Union, Japan and Canada to settle a WTO dispute over the US ban.