European Commission Finds US Violates Trade Agreement; Internet Gambling Law Would Resolve Dispute

(Washington, D.C. – June 10, 2009) The European Commission issued a report today
that finds U.S. laws on Internet gambling are legally not justified and are discriminatory
against foreign Internet gambling operators. Legislation recently introduced by Rep.
Barney Frank (D-MA), the Internet Gambling Regulation, Consumer Protection and
Enforcement Act (H.R. 2267), would resolve this trade dispute by regulating Internet
gambling and creating a level playing field among domestic and foreign Internet
gambling operators.

“The European Commission report provides yet another reason why the administration
and Congress should support pending legislation to regulate Internet gambling, which
would resolve the trade agreement violation and better protect consumers” said Jeffrey
Sandman, spokesperson for the Safe and Secure Internet Gambling Initiative. “The
Obama Administration should seek to forge a new direction on Internet gambling, rather
than keeping in place a protectionist trade policy that hypocritically discriminates against
foreign online gambling operators.”

The European Commission report, instigated by a Trade Barrier Regulation complaint
filed by the Remote Gambling Association (RGA), concludes that the treatment of
foreign Internet gambling operators by the U.S. under existing domestic law constitutes a
barrier to market access for European companies. Further, the report found that the U.S.
is in violation of international trade law by threatening and pursuing criminal
prosecutions, forfeitures and other enforcement actions against foreign Internet
gambling operators, while allowing U.S. online gambling operators, primarily horse
betting, to flourish.

The report suggests resolving the trade dispute through a negotiated solution with the
Obama Administration. If the parties cannot settle the matter themselves, the
Commission could bring a case against the U.S. to the WTO.

Rep. Frank’s legislation would establish a licensing and enforcement framework to
permit licensed gambling operators to accept wagers from individuals in the U.S. The
legislation also mandates a number of significant consumer protections including
safeguards against compulsive and underage gambling, money laundering, fraud and
identify theft.

A companion piece of legislation to Rep. Frank’s bill introduced by Rep. Jim McDermott
(D-WA), the Internet Gambling Regulation and Tax Enforcement Act (H.R. 2268), would
ensure the collection of taxes on regulated Internet gambling activities. According to a
tax revenue analysis, regulated Internet gambling would allow the U.S. to capture much needed revenue in an amount ranging from $48.6 billion to $62.7 billion over the next
decade. Without this legislation, this revenue will remain uncollected while millions of
Americans gamble online without consumer protections.

About Safe and Secure Internet Gambling Initiative

The Safe and Secure Internet Gambling Initiative promotes the freedom of individuals to gamble online with the proper safeguards to protect consumers and ensure the integrity of financial transactions. For more information on the Initiative, please visit www.safeandsecureig.org. The Web site provides a means by which individuals can register support for regulated Internet gambling with their elected representatives.

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