EU contends US Internet gambling laws create ‘adverse trade effects’ for Malta
by DAVID LINDSAY

When arguing its case against the United States’ Internet gambling laws with the World Trade Organisation, the European Commission highlighted the example of Malta as a case in point demonstrating the ‘adverse trade effects’, within the syntax of the Trade Barriers Regulation, the situation is having on the Maltese economy.

In its report on US laws on remote gambling and their enforcement against EU companies, following an investigation into the US measures and how they are affecting foreign suppliers of Internet gambling services, the European Commission has concluded that the US measures constitute an obstacle to trade that is inconsistent with WTO rules.

The EC highlighted the cases of Malta, the UK and Gibraltar, and, to a lesser extent, those of Ireland, Sweden, Cyprus and Austria.

Focusing on Malta, the report found that, “As a result of the obstacle to trade, Malta has suffered a non quantified but significant negative impact on its economic activity and employment.”

It added, “According to data provided by Malta’s government to the Commission services during the investigation, the contribution of the gaming industry to Malta’s GDP in 2007 was 5.4 per cent, and 6.3 per cent of the total gross value added of the Maltese economy. Moreover, the sector in Malta had a 12 per cent market share of the industry in 2007, and employed a total of 1,882 staff as of June 2008.”

The report concludes that the US measures constitute an obstacle to trade that is inconsistent with WTO rules. As a result, WTO proceedings would be justified. At the same time, the report suggests that the issue should be addressed to the US Administration, with a view to finding a negotiated solution.

European online gambling and betting companies left the US market in 2006, but still suffer legal proceedings by US authorities based on their past activities on the US market. The report comes to the conclusion that these proceedings are legally unjustified as well as discriminatory, because the activities of EU companies took place under the cover of US WTO commitments.

Although WTO proceedings would be justified on the basis of the report, this is not an automatic consequence. The European Commission will now seek a satisfactory solution to its concerns through dialogue with the US Administration...

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EU, Malta, US Internet Gambling LawsE