EU - US compensation deal disappoints

Shares in European online gaming companies took a hit on the news that European Union (EU) negotiators have accepted a much weaker than expected settlement with the US regards compensation for online gaming companies impacted by the US' Unlawful Internet Gambling Enforcement Act (UIGEA).

The World Trade Organisation (WTO) has ruled UIGEA illegal under current WTO terms prompting the US to withdraw from its treaty obligations.  Compensation was subsequently sought by the European online gaming industry for the millions of dollars in losses they suffered.  Many online bingo games operators and online bingo halls were amongst the many online gaming companies adversely affected by the implementation of UIGEA.

The UK's Guardian newspaper probably summed up sentiment best in describing the situation as "....a savage blow to the EU online gambling industry."

In the markets, shares in online gaming operators such as PartyGaming and Bwin took a dive on the EU unwillingness to challenge the US  position further.

An EU spokesmen said in a released statement: "A bilateral agreement was signed in Geneva, which provides EU service suppliers with new trade opportunities in the US postal and courier, research and development, storage and warehouse sectors. The US also made concessions in the testing and analysis services sector."

For the European online bingo industry this does little to compensate for the loss of US customers who play online bingo.  The current UIGEA law makes it illegal for banks and credit card companies to make payments to online gambling sites.

A Bwin spokesman said the company had not expected much from EU-US talks at this stage but that it remained confident the EU Commission would maintain its stance in pushing for a regulated US Internet gambling market open to EU online gaming companies.

"We continue to believe that it is better to regulate than to prohibit, because the reality shows that the prohibition only drives out the transparent, listed operators," he said. "We trust the Commission will continue to push further for this. It certainly is going to be a long way still."