EU accepts US deal on online gambling

The European Union has accepted a US deal which will keep continental gambling and betting companies out of the lucrative American market.

The bilateral agreement, which follows the Bush administration's decision to clamp down on online gambling, will give EU service suppliers access to new trade opportunities in certain sectors in the US, in lieu of America's decision to keep its gambling and betting markets shut.

America has offered openings in postal and courier, research and development, and storage and warehouse sectors as compensation. The precise value of the deal is unknown.

A European Commission official said: "This deal is the result of negotiations within the WTO framework and compensates us for the loss of trading opportunities in the gambling sector. We have accepted the most meaningful package in that regard."

The US announced its decision to withdraw its WTO commitments on gambling and betting services under the General Agreement on Trade in Services earlier this year. The clampdown forced a number of European companies, including Sportingbet, which had to sell its US arm for the princely sum of $1 last year, and PartyGaming, to abandon their North American operations.

Naotaka Matsukata, a senior policy adviser at Alston & Bird in Washington and a former director of policy planning for Robert Zoellick, the ex-US trade representative and current World Bank president, said that the agreement could set a bad precedent. "This could put a question mark on the credibility of the WTO system. The US announced that it was withdrawing from its GATS obligations and then it negotiated a way out by offering compensation. What stops another country like China doing the same thing? They may decide that they do not want to keep some of their WTO obligations and offer to pay their way out as well."

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