In a preliminary report issued yesterday, the European Commission (the European Union's executive body) concludes that the U.S. government's crackdown on Internet gambling violates its international trade commitments by discriminating against websites based in other countries. The report came in response to a complaint from the Remote Gambling Association, a European trade group. In recent years the U.S. Justice Department has been prosecuting European companies for helping Americans place bets online, even going so far as to arrest executives of those companies if they happen to visit or stop over in the United States. Meanwhile, American gambling sites, mainly related to horse racing, continue to operate unmolested, having received an implicit exemption under the Unlawful Internet Gambling Enforcement Act of 2006. That inconsistency amounts to an illegal trade barrier, says the E.C., which may file a complaint with the World Trade Organization if it cannot reach a satisfactory accommodation with the U.S. government. The tiny Caribbean country Antigua and Barbuda won a similar WTO complaint in 2007, earning the right to compensatory trade sanctions. Needless to say, a European Union complaint would pose a much bigger economic threat.
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