September 26, 2007 at 4:23 PM EDT
BRUSSELS — European online gaming companies that have been shut out of U.S. markets urged the European Union on Wednesday to demand as much as $100-billion in compensation in the hope that Washington might yet be pressed into reversing its ban.
The tiny Caribbean island of Antigua, which built up an online gambling industry before the U.S. ban, successfully challenged U.S. online betting restrictions at the World Trade Organization and the United States lost its appeal this year.
Now Antigua, the EU and other countries are trying to negotiate compensation deals with Washington.
The United States is offering concessions in other areas of trade to offset the online gambling restrictions.
Lawyers for European online gaming firms — which are among the biggest in the world — said the EU should press for as much as $100-billion in compensation, given the plunge in the market value of listed firms when Washington shut off the world’s biggest market last year and the value of business lost since then.
The move wiped $7-billion off the value of the industry, which includes PartyGaming, Bwin, Sporting Bet and 888.com.
“One major question is how strong the EU will be in pushing the U.S. for all the concessions available to it,” said Craig Pouncey, a trade lawyer with law firm Herbert Smith.
Antigua wants compensation of $3.4-billion — a figure the United States says is far too high — and the EU should demand at least 20 or 30 times that amount given the size of its online gaming industry, said Raul Herrera from law firm Arnold & Porter.
An EU industry representative said the United States should allow European countries back into the market.
“They have got themselves into a terrible mess and there is an easy way out for them,” Clive Hawkswood, head of the Remote Gambling Association, told a news conference in Brussels.
He said regulation would ease what the United States says are its concerns about money-laundering and consumer protection.
Washington this year invoked a rarely used right under WTO rules to retroactively exclude gambling from its promise to open up its services market.
“The U.S. [compensation] offer to date is insufficient and we continue to negotiate in order to improve it,” said Peter Power, a spokesman for EU Trade Commissioner Peter Mandelson.
The latest deadline for the United States to agree on compensation is October 22.
“The level of damage is impossible to quantify in a dollar sense,” Power said, when asked about the $100-billion figure. “It is clear the EU industry was damaged … and adequate compensation is now the subject of negotiations.”
The lawyers said the dispute could drag on for years while U.S. casino operators and Internet companies such as Yahoo! and Google are free to do business in Europe
This is one of the first instances known where money laundering through online poker rooms has been documented.
The global jihad landed in Linda Spence’s e-mail inbox during the summer of 2003, in the form of a message urging her to verify her eBay account information, according to a report in the Washington Post. The 35-year-old New Jersey resident clicked on the link included in the message, which took her to a counterfeit eBay site where she entered personal financial information.
Spence’s information wound up in the hands of a man in Britain who investigators say was the brains behind a cell that sought to facilitate bombings in the United States, Europe and the Middle East.
Investigators say Spence’s stolen data made its way via the Internet black market for stolen identities to a 21-year-old biochemistry student, Tariq al-Daour, one of three British residents who pleaded guilty this week to using the Internet to incite murder.
According to the Washington Post, Investigators in the United States and Britain say the three used computer viruses and stolen credit card accounts to set up a network of communication forums and Web sites that hosted such things as tutorials on computer hacking and bomb-making, and videos of beheadings and suicide bombings in Iraq.
Authorities say one of the men, Waseem Mughal, a 24-year-old law student, was found with a computer containing a 26-minute video that included instructions in Arabic for preparing a suicide-bomb vest and a recipe for improvised explosives.
