Via Daniel Horowitz (business and technology consultant), The Wall Street Journal Europe (pirated copy here):

[...] We have our differences with House Financial Services Chairman Barney Frank, but he may have been on to something when he introduced a bill to exempt licensed operators from the ban. Gambling is a vice, and social problems attach themselves to it. By legalizing and regulating the business, however, Washington could more effectively battle such problems as underage gambling and addiction. It would also avoid unnecessary trade tiffs with its leading commercial partners. And it would exempt cyberspace from overaggressive regulators, in America or anywhere else.

Remote Gambling Association – PDF file:

European Union Commissioner Mandelson Urged to Defend Trade Rights
in WTO Dispute During Crucial Washington Visit

(Washington, D.C. – November 6, 2007) European politicians and industry
representatives are calling on E.U. Trade Commissioner Peter Mandelson to use his visit
to the U.S. capital this week to seek the reversal of illegal discrimination against Europe’s
financial services, e-commerce and gaming industries. Mr. Mandelson’s meetings will
feature negotiations with U.S. Trade Representative Susan Schwab over compensation
owed to the E.U. and other countries following the U.S. withdrawal of services trade
concessions in the World Trade Organization related to gaming.

“The United States has engaged in blatantly protectionist behavior. U.S. companies are
entitled to operate in European markets, while we’ve been forced out of the United
States,” said Clive Hawkswood, Chief Executive of the Remote Gambling Association.
“Commissioner Mandelson’s visit is a good opportunity to address discrimination against
responsible European companies. The USTR should be put on notice that the E.U. will
not allow the wholesale denial of trade rights protected by the World Trade Organization.
Brussels should take every conceivable measure to defend the system of global trade
law.”

“In the ongoing negotiations on what concessions the US will offer, it is vitally important
that the European Commission extract the maximum possible benefit for European
companies,” said Member of the European Parliament Robert Sturdy. “The US must not
be allowed to unilaterally withdraw a whole market sector from its trade commitments
simply because the growth of that market sector is being driven by European companies.
It is incumbent on the Commission to protect Europe’s interests in this case.” MEP Sturdy
said.

The United States has taken draconian steps to seal its domestic gambling markets from
foreign participants, including gaming companies as well as financial services and
information technology companies, This despite the fact that U.S. possesses the world’s
largest gambling market, and allows U.S. operators to offer certain forms of online
gambling for U.S. operators. “European jurisdictions have already proven the merits of a
regulated environment. We would encourage the development of a similarly fair and
balanced environment in the United States,” Hawkswood added.

The World Trade Organization ruled in 2004 and 2005 that U.S. laws discriminated
against foreign competitors, in violation of global trade rules and the United States’ own
ratified commitments to the WTO. This year, after failing to comply with a WTO ruling
that U.S. laws be reformed, the United States announced it would withdraw those
commitments, entitling WTO member countries to fair compensation for the lost market
access. The closure of the $100 billion U.S. gaming market had financial ramifications
far beyond the gaming industry itself, wiping out billions of dollars from the balance
sheets of European institutional investors, pension funds, and financial services
companies as well as affecting the many supplier industry sectors to the gaming industry.
“It’s clear from the WTO rulings that the European Union and other WTO partners are
entitled to full and fair compensation,” said Nao Matsukata, formerly Director of Policy
Planning for USTR Robert Zoellick and now a Senior Advisor for Alston and Bird LLP.
“Failure to resolve the United States’ discriminatory practices would lead the WTO to
authorize countries to enact enormous sanctions against the U.S. equal to the value of the
lost market access. This situation could be avoided through a legislative solution.
Frankly, the Congress is already moving in a responsible manner on this issue, and
should take the matter out of USTR’s hands to prevent the further deterioration of U.S.-
European trade relations.”

Draft legislation offered by House Financial Services Chairman Barney Frank (D-MA) in
the U.S. Congress would create a national licensing system for online gambling in the
United States. This approach would provide blanket authority for foreign operators to
participate in U.S. state markets to the extent that those markets are open to domestic
providers of gambling services. “The U.S. Congress is seeking to regulate online gaming
in a competitive and fairly taxed environment that encourages the participation of
responsible companies,” said Lode Van Den Hende of Herbert Smith LLP. “The
legislation would create strong consumer protections, facilitate consumer choice, respond
to technological innovation, and provide durable tax revenues for the future. Since the
U.S. Trade Representative’s sole interest seems to be violating the rights of European
industry, it is incumbent upon Commissioner Mandelson to work with the U.S. Congress
to develop a responsible solution.”

Several key WTO partners of the United States have already expressed concern over the
broader impact of USTR’s decisions on global trade. “At a minimum, Washington’s
actions call into question the United States’ credibility in current WTO negotiations for
greater trade liberalization,” Matsukata said. “It will be readily apparent to significant
economies such as China, India and Brazil, that the United States seeks to create one
standard for its trading partners, and another for itself. This risks setting a precedent in
the WTO that would ultimately prove harmful not only to the global, rules-based trading
system, but also to the long term ability of the U.S. to remain competitive.”