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EU Could Have A Problem With New US Online Gambling Regulations

(Casino Gambling Web)-

The US has shown in the past that it does not have any qualms with bucking the international trade laws. That was shown most clearly in 2006, when lawmakers passed the Unlawful Internet Gambling Enforcement Act, which attempted to criminalize online gambling.

Now, US lawmakers might work their way out of trouble from the UIGEA, but it may come at a bigger international price. Senator Harry Reid is supporting legislation that would, in essence, overturn the UIGEA, and allow states to regulate and run online gambling sites.

The bill, however, could come with a stiff price. Other countries within the European Union have attempted to regulate only online gaming sites licensed in their country, and the European Court of Justice has been called on to rule on the legality of keeping foreign companies out. Each country has had separate details that they have argued.

Portugal, successfully defended their right to an online gambling ban last year, when they claimed that domestic crime was up and that online gambling would create a bigger problem. The European Court accepted that claim. Cyprus is attempting to use the same reason while authorizing an online gambling ban.

Other countries, such as Italy, Spain, and France, have been told that they must allow foreign companies to operate within their boundaries. While the two issues appear different on the surface, there is one key component that the Court of Justice uses to determine their rulings, and that centers on fair international competitiveness within a market.

In the case of Portugal and Cyprus, they were attempting to completely ban online gambling. That meant that even operators in their own country would be breaking the law by offering Internet betting. In the other countries, monopolies were held within the online gambling industry, and the Court ruled accordingly.

The legislation that Reid is backing would allow US states to regulate and tax Internet gambling, but would prevent foreign companies from offering their services to US customers. If US lawmakers did pass any such legislation, they would almost certainly be in violation of international trade laws.

New Jersey senators passed an online gambling bill a couple of weeks ago that raised the same questions as the proposal being floated by Reid. In New Jersey, intrastate betting would be allowed, but only by New Jersey residents, and foreign companies would be prohibited from taking customers from New Jersey.

December 5, 2010 Posted By Tom Jones

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